FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GREGORY CAPUTO, Relator; Ex 

Rel. United States of America; 

GLOBAL TUNGSTEN & POWDERS 

CORPORATION, Relator; Ex Rel. 

United States of America, 

Plaintiffs-Appellees, 

 v. 

TUNGSTEN HEAVY POWDER, 

INC., DBA Tungsten Heavy Powder 

and Parts, Inc., 

Defendant-Appellant, 

GREGORY A. VEGA; RICARDO 

ARIAS; MEGAN OVERMANN 

GOETZ; MARINA A. TORRES; 

THOMAS RUBINSKY; DONALD 

HAGANS, 

Real Parties in Interest, 

No. 22-55142 

D.C. No. 

3:18-cv-02352-WAHG 

ORDER
2 CAPUTO V. TUNGSTEN HEAVY POWDER, INC.

and 

UNITED STATES OF AMERICA, Ex 

Rel., 

Real Party in Interest.

Filed March 14, 2024

Before: Marsha S. Berzon, Ryan D. Nelson, and Bridget S. 

Bade, Circuit Judges.

Order

SUMMARY*

Sanctions

In an appeal by Tungsten Heavy Powder, Inc., from the 

district court’s award of attorneys’ fees, the panel 

(1) adopted, with some points of clarification, a special 

master’s factual findings, (2) adopted in full the special 

master’s conclusions of law and recommended sanctions and 

disciplinary actions, and (3) imposed sanctions and 

disciplinary actions, pursuant to Tungsten Heavy Powder’s 

stipulation and 28 U.S.C. § 1927, on Tungsten Heavy 

Powder and attorneys Gregory A. Vega, Ricardo Arias, and 

* This summary constitutes no part of the opinion of the court. It has 

been prepared by court staff for the convenience of the reader.
CAPUTO V. TUNGSTEN HEAVY POWDER, INC. 3

Donald Hagens for misconduct and unreasonable and 

vexatious multiplication of proceedings.

COUNSEL

Marina A. Torres (argued), Halpern May Ybarra Gelberg 

LLP, Los Angeles, California; Ethan J. Brown and Tom 

Rickeman, Brown Neri Smith & Khan LLP, Los Angeles, 

California; for Defendant-Appellant. 

Jessica H. Sanderson (argued) and Sam D. Finkelstein, 

Volkov Law Group PC, Washington, D.C., for PlaintiffsAppellees.

Patrick Q. Hall, Law Office of Patrick Q. Hall, San Diego, 

California, for Real-Parties-in-Interest Gregory A. Vega and 

Ricardo Arias. 

Christopher A. Wright, Carney Badley Spellman PS, Seattle, 

Washington, for-Real-Party-in-Interest Megan Overmann 

Goetz. 

Alex M. Weingarten, Willkie Farr & Gallagher LLP, Los 

Angeles, California, for Real-Party-in-Interest, Marina A. 

Torres. 

Joseph J. Ybarra, Halpern May Ybarra Gelberg LLP, Los 

Angeles, California, for Real-Party-in-Interest Thomas 

Rubinsky. 

Donald Hagans, Pro Se, Las Vegas, Nevada, for RealParty-in-Interest Donald Hagans.
4 CAPUTO V. TUNGSTEN HEAVY POWDER, INC.

ORDER

Petitioners Global Tungsten & Powders Corp. (GTP) 

and Gregory Caputo have filed a motion for sanctions 

against respondent Tungsten Heavy Powder, Inc. (THP), 

alleging that THP filed its appeal in bad faith to delay 

payment of an attorneys’ fee award entered by the District 

Court for the Southern District of California. The motion 

alleges that THP misrepresented to this court when it learned 

of “new evidence” underlying its application for 

reconsideration of the fee order, the denial of which was the 

subject of this appeal. THP represented that on October 29, 

2021, Dennis Omanoff, a former employee of THP’s

corporate affiliate Tungsten Parts Wyoming, Inc. (TPW), 

“came forward alleging unethical and illegal conduct” by 

GTP’s counsel. Based in part on a January 27, 2023, filing 

in Wyoming district court revealing that Omanoff began 

cooperating with THP in May 2021, GTP and Caputo 

contend that THP falsely represented that it could not have 

discovered with due diligence the evidence presented by 

Omanoff before October 29, 2021. 

On March 30, 2023, this panel appointed Judge Richard 

C. Tallman of our Court as Special Master under Rule 48 of 

the Federal Rules of Appellate Procedure “to conduct any 

proceedings he deems appropriate to determine the scope of 

any misconduct, including knowing misrepresentations to 

the district court and this court, pertaining to the Omanoff 

affidavit, Appellant’s application for reconsideration, and 

this appeal.” After briefing by the parties, the production of 

more documents, a three-day evidentiary hearing, and 

closing arguments, Judge Tallman submitted his Report and 

Recommendation (R&R). That Report, attached to this 

Order, fully recounts the relevant factual background.
CAPUTO V. TUNGSTEN HEAVY POWDER, INC. 5

Gregory A. Vega, Ricardo Arias, Donald Hagans, and THP

filed objections.

We adopt Judge Tallman’s factual findings except for the 

following points of clarification:

1. In Part II.A, the Report states: “In substance, TPW

has absorbed all of THP’s operations and assumed its

liabilities. Today, the two companies are basically

indistinguishable.” R&R at 11. To the extent that this

statement can be read as implying, as THP maintains in its

objections, that the two companies are not legally separate,

we decline to adopt that finding. Testimony indicates that

THP remainslegally separate from TPW. And we do not rely

on the functional or operational coordination between the

two companies in entering our sanctions order.

2. In Part II.F.1, the Report states:

Accordingly, the Special Master finds that 

based on the entirety of the evidence, Vega 

and Arias never communicated a belief that 

an appeal would lack merit to Hagans in the 

weeks between Judge Whelan’s order 

denying their motion for reconsideration and 

the appeal to the Ninth Circuit. Nor did they 

say that to Marina A. Torres. The lack of 

contemporaneous documentation serves as 

evidence suggesting that they may never 

have harbored these reservations at all. 

Instead, the Special Master finds that the 

reason they did not take the appeal was 

simply based on the fact that neither Vega nor 

Arias had appellate experience and felt their 
6 CAPUTO V. TUNGSTEN HEAVY POWDER, INC.

time was better spent continuing to represent 

THP in the ongoing criminal investigation.

R&R at 37. Vega and Arias have objected to this factual

finding. We neither adopt nor disavow Judge Tallman’s

findings about whether Vega and Arias advised Hagans of

the appeal’s merit. Instead, we conclude that the

recommended sanctions against Vega and Arias under

§ 1927, and the recommended discipline of Vega under Rule

46(c) of the Federal Rules of Appellate Procedure, are

adequately supported, whether or not this factual finding is

supported by the record.

Judge Tallman did not rely on the alleged failure to

advise Hagans on the merits of the appeal in imposing

sanctions against Vega and Arias under § 1927. Instead, he

pointed to Arias’s failure to conduct diligent research and his

decision to “recycle” an earlier draft of the motion for

reconsideration that referred to the May 24, 2021, affidavit

by substituting the October 29, 2021, date; Vega’s

inadequate supervision of Arias and failure independently to

assess the legal and factual basis of the Rule 60 argument;

and both parties’ failure to correct misstatements of law and

fact filed in the district court and with the Special Master.

R&R at 79–81. The Report and Recommendation identified

Vega’s failure to advise Hagans as one factor supporting

individual discipline against Vega under Rule 46(c). But 

Vega’s failure to provide relevant information to Marina 

Torres concerning his knowledge of the earlier draft 

affidavits and his submission of a declaration to the Special 

Master falsely stating that his firm had no role in preparing 

the Omanoff affidavit were independently adequate to 

support the recommended discipline. Id. at 89–91. 
CAPUTO V. TUNGSTEN HEAVY POWDER, INC. 7

3. Finally, in Part III.A.2, the Special Master concluded 

that “although Marina A. Torres personally submitted 

frivolous arguments to the Ninth Circuit and Special Master, 

she did not act with the requisite bad faith—i.e., 

recklessness—necessary to justify monetary sanctions under 

§ 1927.” Id. at 83. We agree with the Special Master’s 

overall recommendation not to impose sanctions on 

Attorney Torres under either § 1927 or Rule 46. Still, added 

exposition of Torres’s conduct is warranted.

Contrary to the Special Master’s conclusion, Torres’s

behavior went beyond simply “allow[ing] her name to be 

placed on briefs that presented frivolous arguments on 

appeal.” Id. at 84. As the attorney primarily responsible for 

researching and drafting the appellate briefs, the petition for 

rehearing, and the response to the motion for sanctions, 

Torres had the opportunity to verify the factual basis of 

THP’s application for reconsideration and failed to do so. 

Her efforts to solicit information from Hagans, Vega, and 

Arias about their interactions with Omanoff were cursory. 

Further, by the time she filed the Opening Brief in this

appeal, Torres recognized that the district court’s denial of 

the application for reconsideration depended on an affidavit 

filed in the District of Wyoming but failed to thoroughly 

familiarize herself with that litigation. Even acknowledging

that Vega, Arias, and Hagans withheld critical information 

from Torres concerning the extent of Omanoff’s cooperation

with THP, Torres likely could have uncovered the omission 

by reviewing the Wyoming pleadings and THP’s district 

court briefs more thoroughly. 

Most troubling are Torres’s representations in THP’s 

response to the motion for sanctions. That document states: 

“In its Motion for Reconsideration, when Defendant first 

represented that Omanoff ‘came forward alleging unethical 
8 CAPUTO V. TUNGSTEN HEAVY POWDER, INC.

and illegal conduct by [GTP’s counsel] related to Case No. 

3:18-cv-02352-W-AHG’ on October 29, 2021, Defendant 

was only referring to the date the affidavit was signed and 

executed—not the date that Omanoff first approached 

TPW.” The response further represents that “In all of its 

filings, Defendant has, very clearly and repeatedly, said that 

the ‘new evidence’ was Omanoff’s signed and sworn

[October 29, 2021] affidavit.” 

Those representations do not accurately characterize 

THP’s filings. For example, the application for 

reconsideration stated that “new evidence brought to light by 

Dennis Omanoff . . . show[ed GTP’s counsel] was involved 

in unethical and possible illegal conduct,” while the attached 

memorandum of points and authorities stated that Omanoff 

“came forward alleging unethical and illegal conduct,” 

language that suggests the information shared through 

Omanoff’s cooperation with THP was the “new evidence,”

rather than the production of a particular document. THP’s 

opening brief on appeal—drafted by Torres—stated that 

Omanoff’s “testimony did not come to light until the day he 

came forward and [the] day the [October 29th] affidavit was 

signed,” and that “THP was not aware of Omanoff’s 

knowledge prior to October 29, 2021.” Those statements 

acknowledge a distinction between the affidavit and the 

information, testimony, or knowledge it contained, but 

inaccurately represent that the information, testimony, or 

knowledge—not just the affidavit—first came into THP’s 

hands when the October 29, 2021, affidavit was signed. 

The reply brief similarly claimed that “[i]t was only after 

Omanoff came forward with his affidavit that evidence of 

Plaintiffs’ illegal and fraudulent conduct . . . was 

discovered,” (falsely) suggesting that THP did not know of 

the misconduct before the date the October 29 affidavit was 
CAPUTO V. TUNGSTEN HEAVY POWDER, INC. 9

signed. And finally, THP’s petition for rehearing argued that 

it “had not previously been aware of the new evidence—the 

evidence detailed in Omanoff’s affidavit—until two days 

after the [attorneys’ fee] order was signed.” “The evidence 

detailed in Omanoff’s affidavit” and the affidavit itself are 

not the same. Contrary to Torres’s representations in the 

response to the sanctions motion, therefore, THP’s claimed 

“new evidence” did not refer exclusively to the affidavit 

itself but referred also to the information the affidavit 

contained. 

In sum, despite the district court and this panel’s

statements that THP had access to most of the “new” 

evidence relied on in the application for reconsideration for 

some time before the fee order was issued, Torres 

“quadrupled down” on the claim that THP had discovered 

the new evidence only after the fee award was final. R&R at 

48. And after it became clear that Omanoff had begun 

cooperating with THP far earlier than the signing of the 

October affidavit, Torres attempted to narrow THP’s “new 

evidence” argument to refer only to the affidavit itself, 

contravening the far more plausible interpretation that “new 

evidence” referred to the information contained within the 

affidavit that may have supported reconsideration of the fee 

award. That is, Torres repeated and further refined THP’s 

claims in the face of multiple decisions and motions by the 

petitioners highlighting its implausibility.

At the same time, Torres was relatively less culpable 

than Hagans, Vega, and Arias, as she had not known, as they 

did, that there was an earlier, signed Omanoff declaration. 

Her errors were largely—but not only—of omission, not 

commission. Accordingly, while we believe that Torres 

ought to have exercised considerably greater care both in 

investigating Omanoff’s involvement and in making 
10 CAPUTO V. TUNGSTEN HEAVY POWDER, INC.

representations in the appellate and motion for sanctions 

briefs, her conduct does not rise to the level of “bad faith” 

necessary to impose sanctions under § 1927. Nor are 

sanctions warranted under Rule 46. 

Having clarified those factual points, and having

carefully considered the Report and Recommendation, we

overrule the objections filed by Gregory A. Vega, Ricardo 

Arias, Donald Hagans, and THP, except as noted above. We 

grant Petitioners’ motion for sanctions. And we adopt in full 

Judge Tallman’s conclusions of law and the following 

recommended sanctions and disciplinary actions:

THP is liable for $246,983.68. Donald Hagans is jointly 

and severally liable with THP for up to 50% of the above 

amount, not to exceed $123,491.84. Gregory A. Vega is 

jointly and severally liable with THP for up to 20% of the 

above amount, not to exceed $49,396.74. Ricardo Arias is 

jointly and severally liable with THP for up to 10% of the 

above amount, not to exceed $24,698.37. 

Gregory A. Vega is publicly reprimanded under Rule

46(c). 

The State Bar of Texas shall receive from the Clerk of 

Court a copy of the attached Report and Recommendation 

for consideration of any further discipline they deem 

appropriate with respect to the conduct of Donald Hagans.

The State Bar of California shall receive from the Clerk 

of Court a copy of the attached Report and Recommendation 

for consideration of any further discipline they deem 

appropriate with respect to the conduct of Gregory A. Vega 

and Ricardo Arias. 

The United States District Court for the Southern District 

of California shall receive from the Clerk of Court a copy of 
CAPUTO V. TUNGSTEN HEAVY POWDER, INC. 11

the attached Report and Recommendation for consideration 

of any further discipline they deem appropriate with respect 

to the conduct of Gregory A. Vega and Ricardo Arias.

The United States District Court for the District of 

Wyoming shall receive from the Clerk of Court a copy of the 

attached Report and Recommendation for consideration of 

any further discipline they deem appropriate with respect to 

the conduct of Megan Overmann Goetz. 

SO ORDERED.
12 CAPUTO V. TUNGSTEN HEAVY POWDER, INC.

APPENDIX
REPORT AND RECOMMENDATION Page 1 of 102

UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT 

In re: TUNGSTEN HEAVY POWDER 

SPECIAL MASTER PROCEEDING, 

______________________________ 

 

GREGORY CAPUTO, Relator; et al., 

 

 Petitioners, 

 

 v. 

 

TUNGSTEN HEAVY POWDER, INC., 

DBA Tungsten Heavy Powder and Parts, 

Inc., 

 

 Respondent, 

 

GREGORY A. VEGA; et al., 

 

 Real Parties in Interest. 

No. 23-80039 

No. 22-55142 

 

D.C. No. 

3:18-cv-02352-W-AHG 

Southern District of California, 

San Diego 

 

REPORT AND 

RECOMMENDATION OF THE 

SPECIAL MASTER

Before: RICHARD C. TALLMAN, Circuit Judge, acting as Special Master. 

 The Special Master herewith submits his Report and Recommendation 

pursuant to the panel’s instructions. 

 

FILED

OCT 31 2023

MOLLY C. DWYER, CLERK 

U.S. COURT OF APPEALS 
REPORT AND RECOMMENDATION Page 2 of 102

TABLE OF CONTENTS 

I. INTRODUCTION & BACKGROUND ............................................................. 3

II. FINDINGS OF FACT ......................................................................................10

A. The Corporate Parties ..................................................................................10

B. Litigation History Between GTP and THP .................................................12

C. Developments in May and June 2021 .........................................................17

D. Developments in October and November 2021 ..........................................24

E. Judge Whelan’s Decision on the Application for Reconsideration ............29

F. THP’s Appeal to the Ninth Circuit ..............................................................32

1. Seltzer Caplan’s Decision Not to Handle the Appeal ............................32

2. THP’s Initial Appeal to the Ninth Circuit ..............................................37

3. THP’s Petition for Panel Rehearing ......................................................41

G. GTP’s Motion for Sanctions and the Appointment of the Special Master .43

H. Relevant Developments in the Wyoming Antitrust Litigation ...................49

I. Special Master Proceedings ........................................................................51

1. THP’s Opening Brief and Supporting Declarations .............................53

2. THP’s Request to Correct Its Opening Brief ........................................58

III. CONCLUSIONS OF LAW ............................................................................61

A. Monetary Sanctions .....................................................................................61

1. Sanctions Pursuant to THP’s Stipulation ..............................................62

a) Costs and Fees from the District Court Proceedings .......................64 

b) Costs and Fees from the Ninth Circuit Proceedings ........................66 

c) Costs and Fees Resulting from Petitioners’ Motion for Sanctions 

and the Special Master Proceedings ................................................68 

d) Reasonableness of the Various Calculations ...................................70 

2. Individual Attorney Sanctions for the Unreasonable and Vexatious 

Multiplication of Proceedings ...............................................................74

B. Individual Attorney Discipline ....................................................................86

1. Gregory A. Vega and Marina A. Torres ................................................87

2. Donald Hagans, Ricardo Arias, and Megan Overmann Goetz .............95

IV. SUMMARY OF RECOMMENDATIONS ...................................................98
REPORT AND RECOMMENDATION Page 3 of 102

I. INTRODUCTION & BACKGROUND 

 On November 24, 2021, Respondent Tungsten Heavy Powders, Inc. (“THP”) 

filed an ex parte application for reconsideration of an October 28, 2021, attorneys’ 

fees award granted by Judge Thomas J. Whelan in the Southern District of 

California. Evid. Hr’g Ex. 300. Judge Whelan granted the award in favor of 

Petitioners Gregory Caputo and Global Tungsten & Powders Corporation 

(collectively, “Petitioners”) in a qui tam action brought by Petitioners against THP 

and settled in April 2021 for $5.6 million after the United States intervened. S.D. 

Cal. Case No. 3:18-cv-02352-W-AHG, ECF No. 32. 

In support of its application, THP submitted an affidavit of Dennis Omanoff 

executed on October 29, 2021. Evid. Hr’g Ex. 106. The same affidavit had been 

originally filed by THP’s affiliate, Tungsten Parts Wyoming, Inc. (“TPW”), in 

related antitrust litigation in the District of Wyoming, pending before Judge Alan B. 

Johnson. D. Wyo. Case No. 2:21-cv-00099-ABJ, ECF No. 51-2. Affiant Omanoff1

averred, among other things, that Petitioners and their qui tam counsel had engaged 

in unethical, illegal, and anticompetitive conduct toward THP and TPW by 

1

 At the time his affidavit was filed, Dennis Omanoff was a former employee of 

TPW and defending himself against TPW’s claims in the related Wyoming 

litigation. See Ninth Cir. Case No. 23-80039, ECF Nos. 8-2, 22-4. Strangely, 

although Omanoff remains a nominal defendant in the Wyoming litigation, he has 

since been rehired effective January 1, 2023, as TPW’s CEO. Id.
REPORT AND RECOMMENDATION Page 4 of 102

orchestrating corporate espionage to pilfer documents in aid of the qui tam action. 

Evid. Hr’g Ex. 106.

In its ex parte application for reconsideration, THP argued that it was entitled 

to relief from the attorneys’ fees award under Fed. R. Civ. P. 60(b)(2) because the 

Omanoff affidavit, first filed in the District of Wyoming antitrust case, contained 

“newly discovered evidence that, with reasonable diligence, could not have been 

discovered in time to move for” relief under Fed. R. Civ. P. 59(b). Evid. Hr’g Ex. 

300, at 2. Judge Whelan denied relief, finding that “[m]ost of the evidence was 

known to [Respondent] since at least May or June 2021.” Evid. Hr’g Ex. 101, at 2. 

On appeal to the Ninth Circuit, Respondent again asserted that it “was not 

aware of Omanoff’s knowledge prior to October 29, 2021” because “Omanoff only 

came forward after [Judge Whelan’s] order had already been signed.” Evid. Hr’g 

Ex. 211, at 37. A Ninth Circuit panel consisting of U.S. Circuit Judges Marsha S. 

Berzon, Ryan D. Nelson, and Bridget S. Bade affirmed the district court in a 

memorandum disposition. Ninth Cir. Case No. 22-55142, ECF No. 36. 

Respondent then filed a petition for panel rehearing, renewing its argument that 

“Omanoff’s testimony did not come to light until the day . . . the affidavit was 

signed” and that “no amount of due diligence would have uncovered” the 

information contained in the affidavit. Evid. Hr’g Ex. 105, at 87. The panel denied 
REPORT AND RECOMMENDATION Page 5 of 102

the petition for rehearing on January 30, 2023. Ninth Cir. Case No. 22-55142, ECF 

No. 41. 

 On February 13, 2023, after the mandate had issued, Petitioners filed a motion 

for sanctions against Respondent with the Ninth Circuit panel. Ninth Cir. Case No. 

22-55142, ECF No. 43. The motion referenced a new filing that TPW had submitted 

in the related Wyoming litigation, which implied that Respondent THP had been 

aware of Omanoff’s information as early as May 2021. Id. (referencing D. Wyo. 

Case No. 2:21-cv-00099-ABJ, ECF No. 135). On the basis of that motion, and 

finding that these developments presented “significant factual issues that 

warrant[ed] further proceedings,” the Ninth Circuit panel appointed the undersigned 

as Special Master under Fed. R. App. P. 48 and charged the Special Master with 

determining “the scope of any misconduct, including knowing misrepresentations” 

that were made to the San Diego district court and the Ninth Circuit. Ninth Cir. 

Case No. 23-80039, ECF No. 1. 

 In its first filing before the Special Master, THP maintained that Omanoff’s 

October “affidavit detailed, for the first time” his various allegations. Ninth Cir. 

Case No. 22-55142, ECF No. 54, at 5. However, in its June 12, 2023, opening brief 

to the Special Master, THP revealed for the first time to any court that Omanoff had 

prepared a draft of his affidavit for TPW in May 2021, but the draft “was shelved 

and not filed” and critically “was not provided to THP’s counsel in the qui tam case.” 
REPORT AND RECOMMENDATION Page 6 of 102

Evid. Hr’g Ex. 217, at 6. Accordingly, Respondent THP renewed its assertion that 

its San Diego qui tam defense counsel, as opposed to TPW’s Wyoming antitrust 

counsel, “had no knowledge of the information in Mr. Omanoff’s declaration, or that 

Mr. Omanoff was even preparing a declaration” prior to its October 29, 2021, date 

of execution and filing in Wyoming. Id. at 1. Respondent submitted supporting 

declarations of various counsel and another from Omanoff to “corroborate” this 

assertion. Id. at 4–12. 

On June 22, 2023, ten days after filing its opening brief with the Special 

Master, THP filed a request for leave to correct that brief. Evid. Hr’g Ex. 221. THP 

now explained that it had “discovered that certain statements in [its] Opening Brief 

[were] not accurate.” Id. at 1. Namely, THP’s newly engaged counsel for these 

proceedings, Ethan J. Brown, Esq. of the law firm Brown, Neri, Smith & Khan LLP, 

reported that he had “learned for the first time that the May 2021 affidavit by Dennis 

Omanoff referenced in the Opening Brief was transmitted to THP’s qui tam counsel 

in late May 2021.” Id. Respondent contemporaneously submitted a corrected brief 

with minor edits but did not correct the declarations it had filed to corroborate its 

previous false assertion that THP’s San Diego qui tam counsel, Gregory A. Vega 
REPORT AND RECOMMENDATION Page 7 of 102

and Ricardo Arias from the law firm Seltzer Caplan McMahon Vitek,2 had never 

received a copy of any May 2021 affidavits. 

In response to this admission, the Special Master ordered the production of 

any May 2021 draft of the Omanoff affidavit and ordered THP’s counsel to submit 

a declaration explaining the precise details behind the creation and transmittal of the 

May 2021 draft to THP’s qui tam counsel. Ninth Cir. Case No. 23-80039, ECF 

No. 18.

 On July 19, 2023, THP produced documents, numerous draft affidavits, and 

declarations pursuant to the Special Master’s order. Ninth Cir. Case No. 23-80039, 

ECF No. 22. The documents produced revealed that: (1) at all relevant times THP 

and TPW shared corporate counsel, Donald Hagans, Esq.; (2) Hagans met with 

Omanoff in May 2021 in Florida and the two drafted several affidavits and 

declarations; (3) four of these drafts included the California qui tam caption and 

listed THP’s San Diego counsel in that matter, Gregory A. Vega and Ricardo Arias; 

(4) Omanoff signed several of these drafts, including one for filing in Wyoming, and 

one for potential filing in the California qui tam action; and (5) Hagans 

contemporaneously transmitted the signed declarations to Vega and Arias. See id. 

2

 At all times relevant to these proceedings, Gregory A. Vega was the supervising 

partner at Seltzer Caplan McMahon Vitek, and Ricardo Arias was the associate 

working on the case. In 2021, Ricardo Arias was a third-year associate with the 

firm, having been admitted to practice law in 2018. See Evid. Hr’g Tr. vol. 2, 540–

41 (Testimony of Ricardo Arias).
REPORT AND RECOMMENDATION Page 8 of 102

These productions directly contradicted THP’s repeated assertions that the October 

29, 2021, Omanoff affidavit filed by TPW in the related Wyoming litigation 

contained new evidence that THP could not have discovered earlier with the exercise 

of reasonable diligence. 

 Acknowledging the gravity of these disclosures, Respondent THP 

commendably offered to stipulate to the entry of the requested sanctions award. Id. 

at 2; Ninth Cir. Case No. 23-80039, ECF No. 32, at 13–14. However, due to the 

complex web of misrepresentations made by different counsel to various courts, 

including the Special Master, questions remained as to whether counsel acting on 

THP’s behalf did so knowingly and in bad faith, recklessly, or were unwittingly 

induced by THP to submit the misrepresentations. Mindful that the Ninth Circuit 

panel had charged the Special Master with determining “the scope of any 

misconduct, including knowing misrepresentations to the district court and [the 

Ninth Circuit],” Ninth Cir. Case No. 22-55142, ECF No. 48, at 4 (emphasis 

added), the Special Master determined that an evidentiary hearing was necessary to 

fulfill the panel’s mandate and to provide those involved with a full and fair 

opportunity to be heard as to whether sanctions are warranted against individual 

attorneys in addition to Respondent THP. 

 Accordingly, the Special Master ordered Respondent THP, corporate counsel 

Donald Hagans, and several of its outside counsel to show cause as to why sanctions 
REPORT AND RECOMMENDATION Page 9 of 102

should not be imposed on them for the numerous misrepresentations they caused to 

be filed in various courts.3

 Ninth Cir. Case No. 23-80039, ECF No. 31.

 The Special Master heard testimony and received documentary evidence over 

the course of a three-day hearing from August 8–10, 2023, followed by another half 

day of closing arguments on September 18, 2023, after a certified transcript of the 

evidentiary hearing had been supplied by court reporter Ronelle Corbey. See Ninth 

Cir. Case No. 23-80039, ECF No. 83. Nine witnesses testified under oath and sixtysix exhibits were admitted into evidence. The Special Master also received and 

reviewed in camera thousands of pages of documents submitted in advance by the 

parties for review to resolve assertions of attorney-client privilege and the work 

product doctrine. 

 

3

 Outside counsel ordered to show cause were Megan Overmann Goetz, Esq. of 

Pence and MacMillan LLC (Laramie, Wyoming); Gregory A. Vega, Esq. and 

Ricardo Arias, Esq. of Seltzer Caplan McMahon Vitek; Marina A. Torres, Esq., 

formerly of Halpern May Ybarra Geldberg LLP, now of Willkie Farr & Gallagher 

LLP; Thomas Rubinsky, Esq. of Halpern May Ybarra Gelberg LLP; and Donald 

Hagans, Esq., a solo practitioner who offices in Las Vegas, Nevada. 
REPORT AND RECOMMENDATION Page 10 of 102

II. FINDINGS OF FACT4

A. The Corporate Parties 

 Tungsten is a naturally occurring rare metal with exceptional hardness and a 

very high melting point. These characteristics combine to make tungsten products 

crucial to our national security and defense interests due to its usefulness in bullets, 

projectiles, and other armor-piercing munitions. See Cong. Rsch. Serv., Defense 

Primer: Acquiring Special Metals, Rare Earth Magnets, and Tungsten (Updated 

Jan. 30, 2020). However, tungsten, which is mined and sold in powder form, must 

go through a rigorous manufacturing process before it is viable for military or 

commercial use. See, e.g., Tungsten Manufacturing Operations, Tungsten Parts 

Wyoming, https://tungstenparts.com/tungsten-manufacturing-operations/ (last 

visited Oct. 27, 2023). 

Tungsten Heavy Powders, Inc. was founded as a trading company in the late 

1990’s to import tungsten powder from China for distribution in the United States. 

Evid. Hr’g Tr. vol. 1, 88 (Testimony of Russell Lewis). THP eventually 

considered expanding into the manufacturing of tungsten products, which led to the 

development of a factory in Wyoming and the birth in 2018 of a sister company, 

4

 To the extent findings of fact are more appropriately categorized as conclusions of 

law, or vice versa, each is to be treated as if set forth under the category deemed 

appropriate. See Tri-Tron Int’l v. A.A. Velto, 525 F.2d 432, 435–36 (9th Cir. 

1975). 
REPORT AND RECOMMENDATION Page 11 of 102

Tungsten Parts Wyoming. Id. at 89, 163. TPW developed a process of pressing, 

debinding, and sintering tungsten powder to create solid products that it could 

distribute to prime defense contractors for incorporation into weapons systems. Id. 

While TPW began by processing tungsten powder on behalf of THP, it ultimately 

received its own license to distribute tungsten products to these contractors. Id. at 

89. 

THP was owned by Russell Lewis and Joseph Sery (a.k.a. “Serov”). Id. at 

88. Lewis was the financier whereas Sery served as managing partner and played a 

more active role in overseeing the company’s daily operations. Id. While THP still 

exists as a corporate entity, the business is now defunct and ceased primary 

operations in 2019. Id. at 114, 164. Lewis is the company’s only current officer 

and director. Id. at 113–14. In substance, TPW has absorbed all of THP’s 

operations and assumed its liabilities. Today, the two companies are basically 

indistinguishable. 

THP and TPW’s major competitor is Global Tungsten & Powders 

Corporation (“GTP”), and the two companies (with a combined market share of 

90%) have been locked in a bitter war for market dominance. See Evid Hr’g Ex. 

106, at ¶ 16. These proceedings are just the latest skirmish. 
REPORT AND RECOMMENDATION Page 12 of 102

B. Litigation History Between GTP and THP

 Understanding the complex litigation history between THP/TPW and GTP 

that led up to these proceedings is crucial to understanding who knew what, when. 

 In October 2017, THP filed a defamation action against GTP in the Middle 

District of Pennsylvania (“Pennsylvania Defamation Litigation”). M.D. Penn. Case 

No. 4:17-cv-01948-MWB, ECF No. 1. THP alleged that GTP was spreading false 

and defamatory statements that THP was importing raw materials from China and 

having those materials inspected in Mexico as opposed to sourcing from approved 

countries and inspecting and processing those materials domestically as required by 

federal procurement rules and statutes. M.D. Penn. Case No. 4:17-cv-01948-

MWB, ECF No. 13, at 6. The parties resolved the Pennsylvania litigation in 

October 2019 with a sealed settlement agreement, see M.D. Penn. Case No. 4:17-

cv-01948-MWB, ECF No. 73, that included a broad written release and waiver of 

all known and unknown claims, see D. Wyo. Case No. 2:21-cv-00099-ABJ, ECF 

No. 75, at 3–4 (acknowledging breadth of release language). 

 Notwithstanding the settlement of the Pennsylvania Defamation Litigation, 

Respondent THP was in fact misrepresenting the origin of its materials sold to prime 

defense contractors. Evid. Hr’g Tr. vol. 3, 772 (Testimony of Donald Hagans). 
REPORT AND RECOMMENDATION Page 13 of 102

Accordingly, Petitioners GTP and Gregory Caputo5 initiated this litigation in 

October 2018 by filing a sealed False Claims Act qui tam complaint in the Southern 

District of California (“California Qui Tam Litigation”). S.D. Cal. Case No. 3:18-

cv-02352-W-AHG, ECF No. 1. Petitioners (called “qui tam relators” in False 

Claims Act parlance), represented by the Volkov Law Group, alleged THP had 

falsely certified that its tungsten had been sourced from approved places when it had 

actually been sourced from China. Id. Petitioners also alleged that THP was 

fraudulently testing and certifying the quality of those materials. Id. 

 In April 2019, TPW hired Dennis Omanoff as CEO to develop and establish 

manufacturing operations at TPW’s new Wyoming factory. Evid. Hr’g Ex. 116, at 

¶ 4; Evid. Hr’g Tr. vol. 1, 170 (Testimony of Dennis Omanoff). Sometime in 

May 2019 the complaint in the California Qui Tam Litigation was ordered unsealed 

and THP became aware that the United States Department of Justice (“DOJ”) was 

now investigating the matter. Evid. Hr’g Tr. vol. 1, 170–71 (Testimony of Dennis 

Omanoff). According to Omanoff, it was around this time that he discovered Joe 

Sery was in fact causing false claims to be submitted to defense contractors as 

alleged in the California Qui Tam Litigation and was also illegally exporting 

defense-related technical data to restricted countries in violation of the International 

5

 Gregory Caputo was a THP employee until 2017 when he left the company to work 

for GTP. Evid. Hr’g Ex. 116, at ¶ 5. 
REPORT AND RECOMMENDATION Page 14 of 102

Traffic in Arms Regulations (“ITAR”), 48 C.F.R. § 227.675–1. Id.; see also Press 

Release, U.S. Att’ys Off. S.D. Cal., Former Tungsten Heavy Powder & Parts CEO 

Arrested and Charged with Unlawful Exportation of Defense Articles Including 

to The People’s Republic of China (Mar. 4, 2022), available at 

https://www.justice.gov/usao-sdca/pr/former-tungsten-heavy-powder-partsceo-arrested-and-charged-unlawful-exportation. Although Omanoff testified 

that he confronted Joe Sery with the information and that ultimately he and his staff 

felt compelled to resign in July 2019, other evidence suggests that Omanoff resigned 

merely for personal and financial reasons. Compare Evid. Hr’g Tr. vol. 1, 171–72 

(Testimony of Dennis Omanoff) (attributing Omanoff’s resignation to the fact 

that he “became aware of some serious ITAR violations . . . by Joe Sery”), with

Evid. Hr’g Ex. 1001 (indicating Omanoff resigned because “Joe [Sery] would 

not accede to additional investment . . . and was impossible to work with”). 

 Regardless of his motivations, Omanoff contacted the Volkov Law Group, 

counsel of record for Petitioners in the California Qui Tam Litigation, shortly after 

his resignation. Evid. Hr’g Tr. vol. 1, 172 (Testimony of Dennis Omanoff). On 

July 23, 2019, Omanoff engaged the Volkov Law Group for personal legal 

representation in connection with his reporting of the misconduct by Sery and THP. 

D. Wyo. Case No. 2:21-cv-00099-ABJ, ECF No. 51-3. The engagement letter 

drafted by the Volkov Law Group acknowledged the possibility that conflicts of 
REPORT AND RECOMMENDATION Page 15 of 102

interest between Omanoff and GTP could arise, in part due to Omanoff’s former 

employment with TPW. Id. Volkov had Omanoff waive any current or future 

conflicts. Id. The agreement also promised Omanoff a predetermined percentage 

of the relator award if his cooperation resulted in new or novel legal claims against 

THP in the California Qui Tam Litigation. Id. 

 On September 30, 2019, Omanoff executed a common interest agreement 

with GTP and others in which he agreed to cooperate in the DOJ investigation of 

THP and Sery, and to cooperate in a pending London arbitration against THP. D. 

Wyo. Case No. 2:21-cv-00099-ABJ, ECF No. 51-4. 

Around this time, Lewis had Sery step down from his positions at THP and 

TPW, and Lewis became the majority owner of both entities. Evid. Hr’g Tr. vol. 

1, 88–89 (Testimony of Russell Lewis). Lewis began playing a more active role in 

TPW’s daily operations and winding down THP’s operations and revenue stream.6

 

Lewis also hired Donald Hagans, Esq., an attorney Lewis had worked with in 

relation to Lewis’s other worldwide business interests, as “an outside lawyer” and 

“consultant” to handle THP and TPW’s legal matters. Id. at 89, 95–96. Although 

6

 THP presently has no revenue stream and exists only on paper to satisfy its financial 

obligations. See Evid. Hr’g Tr. vol. 1, 113, 164 (Testimony of Russell Lewis); 

Evid. Hr’g Ex. 232, at ¶ 3. For all intents and purposes, the company is moribund. 

TPW has stepped in to rebuild the business THP lost through its corporate 

misconduct and to demonstrate to the United States Department of Defense that it is 

a presently responsible government contractor for procurement of needed war 

material. 
REPORT AND RECOMMENDATION Page 16 of 102

Lewis had final client approval authority with respect to major litigation decisions, 

he delegated the vast majority of this authority to Hagans’s discretion. Id. at 95, 

127–28. That included reviewing and approving all legal filings and legal bills 

submitted by outside counsel, though Lewis might be consulted to approve 

particularly large invoices. Id. The Special Master therefore finds that at all times 

relevant to these proceedings Donald Hagans was THP and TPW’s de facto chief 

legal agent. In this role, he worked directly with Russell Lewis and was tasked with 

strategizing, coordinating, and orchestrating corporate litigation decisions while 

overseeing outside litigation counsel on behalf of both entities. Id.; Evid. Hr’g Ex. 

232; Evid. Hr’g Tr. vol. 3, 768, 784 (Testimony of Donald Hagans). 

 On April 30, 2020, several former TPW employees, including Omanoff, filed 

suit in the District of Wyoming against both THP and TPW (“Wyoming 

Constructive Termination Litigation”). D. Wyo. Case No. 2:20-cv-00073-ABJ,

ECF No. 1. The ex-employees alleged THP and TPW had defamed them and 

violated the False Claims Act’s anti-retaliation provisions, which are designed to 

protect whistleblowers. Id. The parties went to mediation where Omanoff and 

Hagans became acquainted with each other, and the matter settled in August 2020. 

D. Wyo. Case No. 2:20-cv-00073-ABJ, ECF Nos. 11, 15; Evid. Hr’g Tr. vol. 1, 

173 (Testimony of Dennis Omanoff) (describing Hagans as a “voice of reason 
REPORT AND RECOMMENDATION Page 17 of 102

and competency and ethics on the other side of the table” during the Wyoming 

Constructive Termination Litigation mediation). 

 Back on the west coast, the United States intervened in the California Qui Tam

Litigation to negotiate a resolution of the case, and THP settled the damages claim 

for $5.6 million on April 7, 2021. S.D. Cal. Case No. 3:18-cv-02352-W-AHG, 

ECF Nos. 19–22. However, THP did not agree on the amount it would pay for 

Relators’ attorneys’ fees. S.D. Cal. Case No. 3:18-cv-02352-W-AHG, ECF No. 

20. On April 23, 2021, Petitioners moved for attorneys’ fees on behalf of its legal 

representative, the Volkov Law Group, and THP filed its opposition brief on May 

11, 2021. S.D. Cal. Case No. 3:18-cv-02352-W-AHG, ECF Nos. 25, 30. The 

battle over attorneys’ fees in the California Qui Tam Litigation—which picked up 

significant steam in May 2021—is where our story begins in earnest. 

C. Developments in May and June 2021

 At some point during the pendency of the California Qui Tam Litigation, 

Hagans began to suspect that GTP and the Volkov Law Group had obtained the 

sensitive facts underlying the qui tam complaint through conduct constituting 

unlawful corporate espionage. See Evid. Hr’g Tr. vol. 3, 775 (Testimony of 

Donald Hagans). These suspicions underlie the original antitrust complaint filed 

by TPW on May 20, 2021, in the District of Wyoming against GTP, Omanoff, and 

several other former TPW employees (“Wyoming Antitrust Litigation”). D. Wyo. 
REPORT AND RECOMMENDATION Page 18 of 102

Case No. 2:21-cv-00099-ABJ, ECF No. 1. The complaint alleged that GTP, by and 

through the Volkov Law Group, conspired with Omanoff and others to engage in 

corporate espionage and various other unlawful anticompetitive acts. Id. at ¶¶ 35–

37.

 Omanoff was served at his Florida residence with the summons and complaint 

in the Wyoming lawsuit on Friday, May 21, 2021. Evid. Hr’g Tr. vol. 1, 191–92 

(Testimony of Dennis Omanoff). Within twenty-four to forty-eight hours of being 

served with the complaint, Omanoff called and left a message for TPW’s then-CEO, 

J.P. Batache, indicating that he was willing to cooperate against the other named 

defendants. Id. at 178, 192, 265. The message was forwarded to Russell Lewis who 

returned the call. Id. at 180. Omanoff provided Lewis with information that tended 

to confirm some of the allegations contained in the Wyoming Antitrust Complaint. 

Id. Although suspicious of Omanoff’s motives, Lewis informed Omanoff that 

Hagans would be in contact with him shortly by telephone. Id.; Evid. Hr’g Tr. vol. 

1, 104–05 (Testimony of Russell Lewis). 

Hagans called Omanoff on Monday, May 24, 2021. Evid. Hr’g Tr. vol. 2, 

307–08 (Testimony of Dennis Omanoff); Evid. Hr’g Ex. 1001. The call lasted 

between one and two hours and culminated in the two men deciding that it would be 

best for them to meet in person for Omanoff to share more detailed information about 
REPORT AND RECOMMENDATION Page 19 of 102

GTP, Volkov, and what he perceived as “serious wrongs that were conducted against 

TPW.” Evid. Hr’g Tr. vol. 1, 182–83 (Testimony of Dennis Omanoff). 

On the morning of May 25, 2021, Hagans relayed via email detailed 

information he had learned about Omanoff’s allegations against GTP and the Volkov 

Law Group (“Omanoff Allegations”) to Respondent THP’s California qui tam

counsel Gregory A. Vega and Ricardo Arias, and Wyoming antitrust counsel Megan 

Overmann Goetz. Evid. Hr’g Ex. 1001. Hagans specifically emphasized that the 

Omanoff Allegations would have “implications on a number of fronts” and that he 

had already spoken about those implications with Ricardo Arias “re DOJ and Volkov 

fees,” and Megan Overmann Goetz “re the WY case.” Id. In the same email, Hagans 

informed Vega, Arias, and Goetz that he would be “getting affidavit(s)” from 

Omanoff in Florida in the following days and asked them for “any input on 

questions / answers that [they] believe[d] [would be] important and relevant.” Id.

 Immediately thereafter, Hagans flew to Florida. Over a two- to three-day 

period from May 26–28, 2021, Hagans and Omanoff met regarding the Omanoff 

Allegations. Id.; Evid. Hr’g Tr. vol. 2, 308 (Testimony of Dennis Omanoff). 

During their in-person meetings, the two men cooperatively drafted at least seven 

declarations and affidavits detailing the Omanoff Allegations for use in both the 

Wyoming Antitrust Litigation and California Qui Tam Litigation. See Evid. Hr’g 

Exs. 112, 113, 225, 245, 302, 304, 315 (draft Omanoff affidavits); Evid. Hr’g Ex. 
REPORT AND RECOMMENDATION Page 20 of 102

232, at ¶¶ 9–10 (Hagans declaration to the Special Master); Evid. Hr’g Tr. vol. 

1, 186–88 (Testimony of Dennis Omanoff); Evid. Hr’g Tr. vol. 3, 805 (Testimony 

of Donald Hagans). 

At some point during the course of Hagans’s meeting with Omanoff in 

Florida, Hagans contacted Megan Overmann Goetz—TPW’s counsel in the 

Wyoming Antitrust Litigation—and asked her to copy the Omanoff Allegations that 

he had shared with her via email and to paste them into a template that included the 

case caption for the Wyoming matter. Evid. Hr’g Tr. vol. 2, 321 (Testimony of 

Megan Overmann Goetz). Goetz instructed either a legal assistant or associate at 

her firm to do so. Id. at 322. Eventually, Goetz sent back a draft affidavit to Hagans 

that was prepared on her firm’s pleading paper and included the Wyoming case 

caption. Id. at 323. On Friday, May 28, 2021, Omanoff executed and notarized an 

affidavit on Goetz’s firm’s pleading paper for filing in the Wyoming Antitrust 

Litigation. Evid. Hr’g Ex. 245. According to an agreement between Omanoff and 

Hagans, Hagans was free to file notarized documents in court. See Evid. Hr’g Tr. 

vol. 1, 248 (Testimony of Dennis Omanoff). 

However, based on the dates of the various drafts, it appears that preparing a 

declaration for use in the California Qui Tam Litigation was the first order of 

business. On May 27, 2021, the day before Omanoff signed and notarized the 

Wyoming affidavit, Omanoff executed various declarations on Seltzer Caplan 
REPORT AND RECOMMENDATION Page 21 of 102

McMahon Vitek pleading paper, listing Gregory A. Vega and Ricardo Arias as 

attorneys, and including the California Qui Tam Litigation caption.7

 See Evid. Hr’g 

Exs. 112, 304, 315. The contents of these draft declarations evidence that they were 

intended to support an immediate attack by THP on Petitioners’ pending attorneys’ 

fee application in the California Qui Tam Litigation. Id. 

Hagans transmitted the final, signed declaration to Vega and Arias, and Vega 

directed Arias to use it to begin preparing an ex parte application for relief from 

Petitioners’ pending motion for costs and fees. Evid. Hr’g Tr. vol. 2, 428–29 

(Testimony of Gregory Vega); Evid. Hr’g Tr. vol. 2, 552–53 (Testimony of 

Ricardo Arias). Around this same time in May 2021, Vega and Arias also received 

the signed and dated Omanoff affidavit prepared for the Wyoming litigation. Evid. 

Hr’g Tr. vol. 2, 431–32 (Testimony of Gregory Vega). Unlike the final California 

affidavit, which was four pages long, the final Wyoming affidavit was twelve pages 

long and included substantial additional allegations. See Evid. Hr’g Exs. 245, 305. 

The Special Master finds that, at the time Ricardo Arias began preparing the first 

draft of the ex parte application for relief in late May 2021, he had possession of the 

7

 Both Gregory A. Vega and Ricardo Arias testified that they worked with Hagans 

in a similar fashion to Megan Overmann Goetz in that Hagans would transmit 

information to them and Arias would copy and paste the information onto their law 

firm’s pleading paper and include the relevant case caption. See Evid. Hr’g Tr. vol. 

2, 421 (Testimony of Gregory Vega); Evid. Hr’g Tr. vol. 2, 545 (Testimony of 

Ricardo Arias). 
REPORT AND RECOMMENDATION Page 22 of 102

information included in both the May California affidavit and the longer May 

Wyoming affidavit. Evid. Hr’g Tr. vol. 2, 431–32 (Testimony of Gregory Vega).

At Vega’s direction, Arias immediately prepared a draft of the ex parte

application. Evid. Hr’g Tr. vol. 2, 552 (Testimony of Ricardo Arias). The draft 

application asserted that new evidence warranted an evidentiary hearing regarding 

the Petitioners’ motion for attorneys’ fees pending before Judge Whelan in the 

California Qui Tam Litigation because “[o]n May 24, 2021, THP learned that Dennis 

Omanoff . . . came forward alleging unethical conduct by Volkov.” Evid. Hr’g Ex. 

308 (emphasis added). At the time of this initial draft, the statements about when 

THP and its counsel learned that Dennis Omanoff came forward with “new 

evidence” were true. However, the draft ex parte application for relief and 

accompanying Omanoff declaration were shelved for over five months. 

 This delay was caused in part because Hagans, Vega, and Arias testified that, 

in May 2021, they still had some concerns regarding the veracity and accuracy of 

the Omanoff Allegations. Evid. Hr’g Tr. vol. 2, 427–28, 431 (Testimony of 

Gregory Vega); Evid. Hr’g Tr. vol. 2, 605 (Testimony of Ricardo Arias); Evid. 

Hr’g Tr. vol. 3, 799, 806 (Testimony of Donald Hagans). This testimony is 

supported by contemporaneous emails exchanged between Hagans, Vega, and Arias. 

See Evid. Hr’g Ex. 1001. However, Arias and Vega also testified that they shelved 

the May 2021 draft ex parte application in order to divert their firm’s resources 
REPORT AND RECOMMENDATION Page 23 of 102

toward defending against the DOJ’s criminal investigation of THP, which was 

ramping up at this time. Evid. Hr’g Tr. vol. 2, 433–34 (Testimony of Gregory 

Vega); Evid. Hr’g Tr. vol. 2, 553–54 (Testimony of Ricardo Arias). Accordingly, 

the Special Master finds that Hagans, Vega, and Arias chose not to file the original 

draft ex parte application for an evidentiary hearing with Judge Whelan, or otherwise 

alert the San Diego district court to the Omanoff Allegations, in May 2021 for 

reasons that were primarily tactical in nature. 

 By the end of June 2021, however, Hagans was more confident in the 

reliability of Omanoff as an affiant and in the veracity of the Omanoff Allegations. 

Over the course of June 22 and June 23, 2021, Hagans again travelled to Omanoff’s 

Florida home to reinterview him and verify the truth of the Omanoff Allegations by 

asking him to confirm the allegations contained in the First Amended Complaint to 

be filed in the Wyoming case. Evid. Hr’g Tr. vol. 3, 807–08 (Testimony of Donald 

Hagans). 

On the basis of this second meeting, on June 25, 2021, Hagans directed Goetz 

to file the verified First Amended Complaint in the Wyoming Antitrust Litigation, 

now joining the Volkov Law Group as a defendant. D. Wyo. Case No. 2:21-cv00099-ABJ, ECF No. 11. The verified First Amended Complaint contained detailed 

allegations, including direct quotes, from various iterations of Omanoff’s Wyoming 

affidavits. See, e.g., id. at ¶¶ 43(d), 43(f). For example, the verified First Amended 
REPORT AND RECOMMENDATION Page 24 of 102

Complaint references private conversations that Omanoff allegedly had with GTPconnected individuals, which were only later confirmed in Omanoff’s October 2021 

affidavit. Compare id. at ¶ 46 (discussing misrepresentations regarding assisting 

the United States Attorney’s office), with Evid. Hr’g Ex. 106, at ¶ 19(c)–(d) 

(same); compare also D. Wyo. Case No. 2:21-cv-00099-ABJ, ECF No. 11, at ¶ 

51 (quoting a former GTP co-defendant as saying the parties could “make a lot 

of money in the process” of destroying TPW), with Evid. Hr’g Ex. 106, at ¶ 30 

(same). The Special Master therefore finds that Respondent THP and its San Diego 

qui tam counsel, through Hagans, possessed the Omanoff evidence relevant to Judge 

Whelan’s determination of Petitioners’ motion for attorneys’ fees in late-May 2021 

and were confident in the veracity of that evidence by at least late-June 2021. 

D. Developments in October and November 2021

In the fall of 2021, all of the defendants in the Wyoming Antitrust Litigation, 

except for Omanoff and Alonso Martinez, filed motions to dismiss. During the week 

of October 25, 2021, Hagans met for a third time with Omanoff at his Florida home, 

this time to secure a new affidavit to use in defense of the various motions to dismiss. 

Evid. Hr’g Tr. vol. 3, 808–09 (Testimony of Donald Hagans); Evid. Hr’g Tr. 

vol. 1, 205–07 (Testimony of Dennis Omanoff). Omanoff executed and notarized 

a new affidavit under the Wyoming case caption, and on Goetz’s pleading paper, on 

Friday, October 29, 2021. Evid. Hr’g Ex. 106. However, as indicated above, most, 
REPORT AND RECOMMENDATION Page 25 of 102

if not all of the information included in the October affidavit was already known to 

Hagans, and therefore THP and TPW, by late June 2021. Indeed, Hagans testified 

that the “June document would . . . essentially[] show everything that we had.” Evid. 

Hr’g Tr. vol. 3, 810 (Testimony of Donald Hagans). Megan Overmann Goetz 

filed the October Omanoff affidavit as an attachment to her opposition to 

Defendants’ motions to dismiss with District Judge Alan Johnson in Wyoming the 

same day that it was executed, October 29, 2021. D. Wyo. Case No. 2:21-cv-00099-

ABJ, ECF No. 51-2. 

 Meanwhile, on Wednesday, October 27, 2021, Judge Whelan issued his 

decision granting in part Petitioners’ application for attorneys’ fees in the California 

Qui Tam Litigation. S.D. Cal. Case No. 3:18-cv-02352-W-AHG, ECF No. 32. 

Vega and Arias immediately emailed Hagans to notify him of Judge Whelan’s order. 

Evid. Hr’g Tr. vol. 2, 440 (Testimony of Gregory Vega). 

On November 1, 2021, Hagans sent Vega and Arias the October 29, 2021, 

Omanoff affidavit that was filed in the Wyoming Antitrust Litigation just three days 

prior. Evid. Hr’g Ex. 309. In his email, Hagans indicated that he “[w]ant[ed] to 

fight” Judge Whelan’s order and was willing to do “whatever it takes,” including 

filing an appeal. Id. Hagans also indicated that Vega and Arias “may be able to 

claim further information came to our attention” because they had not yet presented 

any of the Omanoff Allegations to the San Diego district court. Id. (“We were 
REPORT AND RECOMMENDATION Page 26 of 102

‘light’ in SD compared to Wyoming . . . on what was submitted.”) It thus appears 

that this email was the first time that Hagans, Vega, and Arias considered arguing to 

the San Diego district court that new evidence had come to light as a result of the 

October 29, 2021, Omanoff affidavit, despite the fact that all three of the attorneys 

knew virtually all of the pertinent information contained in the affidavit as early as 

May 2021 and no later than June 2021. Evid. Hr’g Tr. vol. 2, 444 (Testimony of 

Gregory Vega) (admitting the October Omanoff affidavit was “substantially 

similar to the two declarations . . . received from Mr. Hagans back in . . . May 

2021). Within “a week or two” after Hagans sent the October affidavit, Hagans 

instructed Vega and Arias to begin preparing an application for reconsideration. Id.

at 445. 

 Soon thereafter, Arias began working on a new ex parte application for 

reconsideration. The eventual motion as filed rested on arguments based on Fed. R. 

Civ. P. 60(b)(2), (3), and (6).8

 See Evid. Hr’g Exs. 300, 301. Arias testified that 

8

 Fed. R. Civ. P. 60(b) (emphasis added) states in relevant part: 

 

Grounds for Relief from a Final Judgment, Order, or Proceeding. On 

motion and just terms, the court may relieve a party or its legal 

representative from a final judgment, order, or proceeding for the 

following reasons: . . . (2) newly discovered evidence that, with 

reasonable diligence, could not have been discovered in time to move 

for a new trial under Rule 59(b); (3) fraud (whether previously called 

intrinsic or extrinsic), misrepresentation, or misconduct by an opposing 

party; . . . (6) any other reason that justifies relief. 
REPORT AND RECOMMENDATION Page 27 of 102

he “researched motion for reconsideration and [Rule 60] came up and [he] added it 

to [the] brief.” Evid. Hr’g Tr. vol. 2, 558 (Testimony of Ricardo Arias). Arias, 

shockingly, testified that he did no further research to support his inclusion of Rule 

60(b)(2) in the draft motion. Id. He did not read a single case on the meaning of the 

rule. Evid. Hr’g Tr. vol. 3, 613 (Testimony of Ricardo Arias). He did not do any 

research on the meaning of “newly discovered evidence.” Evid. Hr’g Tr. vol. 2,

556, 569 (Testimony of Ricardo Arias). Nor did he research what the rule meant 

by “reasonable diligence.” Id. He simply read the rule and included it in the 

application. Id. And, evidently, he did not read the rule very closely. Despite the 

fact that Rule 60(b)(2) plainly covers “newly discovered evidence,” Arias testified 

that when he included it as a basis for reconsideration he “wasn’t thinking about 

newly discovered” but instead was solely focused on the fact that the October 

Omanoff affidavit was “evidence that the judge hadn’t seen.” Id. at 560. 

 Arias’s testimony further established that he used the shelved May 2021 draft 

of the ex parte application as a starting point for the renewed November application. 

A comparison of the language of the two drafts sheds light on Arias’s decisions in 

the creation of the November application. The May draft states: “On May 24, 2021, 

THP learned that Dennis Omanoff, a former employee of Tungsten Parts Wyoming, 

Inc.[] (“TPW”) from approximately April 15, 2019, to July 15, 2019, came forward

alleging unethical conduct by Volkov related to Case No. 3:18-cv-02352-W-AHG.” 
REPORT AND RECOMMENDATION Page 28 of 102

Evid. Hr’g Ex. 308 (emphasis added). The November Memorandum of Points and 

Authorities that was filed with the San Diego district court states: “On October 29, 

2021, after this Court issued its Order, Dennis Omanoff (“Omanoff”), a former 

employee of Tungsten Parts Wyoming (“TPW”)[] from approximately April 15, 

2019, to July 15, 2019, came forward alleging unethical and illegal conduct by 

Volkov related to Case No. 3:18-cv-02352-W-AHG.” Evid. Hr’g Ex. 301 

(emphasis added). 

THP’s November application thus contained a significant misrepresentative 

change to the true date on which Dennis Omanoff actually “came forward.” When 

questioned about the change, Arias admitted without explanation that, when he 

returned to the application for reconsideration six months after preparing an initial 

draft, he copied and pasted the sentence, left in the “came forward” language, “but 

changed the date from May 2021 to [October] 2021.” See id.; Evid. Hr’g Tr. vol. 

3, 600–01 (Testimony of Ricardo Arias). 

 Once Arias completed the November draft application for reconsideration, 

he sent it to Vega for approval. Like Arias, Vega did not conduct any legal research 

on the meaning of Fed. R. Civ. P. 60(b)(2) beyond reading its text. Evid. Hr’g Tr. 

vol. 2, 448–49, 506 (Testimony of Gregory Vega). And, again, despite the 

language of the Rule, Vega testified that neither he nor Arias made “any 

representations to Judge Whelan about exercising due diligence” in discovering the 
REPORT AND RECOMMENDATION Page 29 of 102

Omanoff evidence earlier than they alleged. Id. at 475. When pressed about why 

he did not push back on the language Arias had included to support the Rule 60(b)(2) 

argument, Vega restated the reasons that Arias offered during his testimony—that 

he believed the rule applied because the Omanoff evidence was new to Judge 

Whelan. Id. at 451, 507. Vega eventually approved the brief and had Arias forward 

it to Hagans for final review. Evid. Hr’g Ex. 316. Hagans approved the draft 

without changes on the day before Thanksgiving, Wednesday, November 24, 2021, 

and it was filed in the Southern District of California the same day. Id. (“I have no 

changes. In[sic] know that is unusual for me.”) 

E. Judge Whelan’s Decision on the Application for Reconsideration 

Judge Whelan denied relief on January 6, 2022, finding that “[m]ost of the 

evidence was known to [THP] since at least May or June 2021” because the same 

evidence was included in TPW’s “first amended verified complaint” in the 

Wyoming Antitrust Litigation pending before Judge Johnson. Evid. Hr’g Ex. 101, 

at 2, 6. Judge Whelan correctly identified that only two of the six allegations THP 

relied on from the October Omanoff affidavit were not already disclosed in the 

Wyoming litigation months earlier. See id. at 7 (“Defendant THP arguably did 

not know until October 29, 2021 that Volkov allegedly paid Pazos money from 

the Relators’ share of the settlement agreement . . . or that Volkov failed to 

provide Omanoff with invoices for work done in this matter.”). However, Vega, 
REPORT AND RECOMMENDATION Page 30 of 102

Arias, and Hagans had access to these two pieces of evidence as well through the 

signed and notarized Wyoming affidavit from May 28, 2021. Evid. Hr’g Ex. 245, 

at ¶¶ 20, 24(f). This all serves to underscore the fact that, despite multiple witnesses 

testifying that Omanoff provided information “in stages” between May and October 

2021, all of the information that THP and its counsel relied upon in support of its 

November motion for reconsideration in the California Qui Tam Litigation was 

known to them at the very latest by June 2021. 

Vega and Arias claim that they were put on notice of their Rule 60(b)(2) error 

when Judge Whelan issued his order denying their application for reconsideration. 

Specifically, Vega read the case law that Judge Whelan cited in his opinion 

indicating that evidence is not “newly discovered” if it “could have been discovered 

with reasonable diligence,” and also that “[e]vidence in the possession of the party 

before the judgment was rendered is not newly discovered.” Evid. Hr’g Ex. 101, 

at 5 (citing Nishimoto v. Cnty. of San Diego, 850 F. App’x 493, 493 (9th Cir. 

2021); Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082, 1093 (9th Cir. 

2003)); Evid. Hr’g Tr. vol. 2, 510–11 (Testimony of Gregory Vega). These case 

citations apparently awakened Vega and Arias to the fact that the argument they had 

made in their application for reconsideration lacked any sound legal basis. See Evid. 

Hr’g Tr. vol. 2, 467–68 (Testimony of Gregory Vega); Evid. Hr’g Tr. vol. 2, 560 

(Testimony of Ricardo Arias). 
REPORT AND RECOMMENDATION Page 31 of 102

To his credit, in explaining his actions to the Special Master, Vega, as the 

responsible partner on the matter, accepted full responsibility for the frivolity of the 

Rule 60(b)(2) argument in the November application for reconsideration and 

acknowledged that the “came forward” language included therein was misleading. 

Evid. Hr’g Tr. vol. 2, 452–53, 455 (Testimony of Gregory Vega). Similarly, Arias 

acknowledged that he “embellished” and used the Omanoff affidavit “as a spear . . . 

in all this litigation,” and that he wished he could take back the “came forward” 

language. Evid. Hr’g Tr. vol. 2, 569; vol. 3, 599 (Testimony of Ricardo Arias). 

Finally, Hagans, for his part, indicated that he “bought” the new evidence argument 

but realized from what he learned during the Special Master evidentiary hearing that 

the application for reconsideration included false and misleading statements. Evid. 

Hr'g Tr. vol. 3, 785–87 (Testimony of Donald Hagans). 

While commendable, Vega’s, Arias’s, and Hagans’s admissions do not 

entirely square with their behavior during the litigation of the application for 

reconsideration. First, Petitioners’ memorandum in opposition to THP’s application 

for reconsideration set forth the appropriate legal standard for when a party can 

introduce “new evidence” in a motion for reconsideration long before Judge Whelan 

issued his order. See S.D. Cal. Case No. 3:18-cv-02352-W-AHG, ECF No. 35, at 

11. Yet after reviewing the opposition memorandum, Vega and Arias determined 

that it was not necessary to either correct the arguments they had made in their 
REPORT AND RECOMMENDATION Page 32 of 102

application for reconsideration or even to file a reply memorandum. Evid. Hr’g Tr. 

vol. 3, 614–16 (Testimony of Ricardo Arias). Second, after Judge Whelan issued 

his order, none of the relevant parties here made any effort to correct the false and 

misleading statements that were put before the court. 

Instead, THP made the decision to appeal Judge Whelan’s order to the Ninth 

Circuit, including on Rule 60(b)(2) “newly discovered evidence” grounds. 

Attorneys Vega and Arias maintained at the evidentiary hearing that they counseled 

Hagans against filing an appeal, but the evidence shows this to be a disputed factual 

contention which the Special Master resolves against them below. 

F. THP’s Appeal to the Ninth Circuit 

1. Seltzer Caplan’s Decision Not to Handle the Appeal 

On February 3, 2022, Gregory A. Vega signed a Notice of Appeal filed in the 

Southern District of California challenging only Judge Whelan’s order denying 

THP’s application for reconsideration. Evid. Hr’g Ex. 634. But Vega and his firm, 

Seltzer Caplan McMahon Vitek, were never meant to argue THP’s appeal. Instead, 

Donald Hagans hired the firm Halpern May Ybarra Gelberg LLP to handle the 

appeal. However, pressed for time, Hagans asked if Vega could file the NOA and 

later have Halpern May substitute in as counsel of record for the case before the 

Ninth Circuit. Evid. Hr’g Tr. vol. 2, 469 (Testimony of Gregory Vega). Vega 

agreed. Id. 
REPORT AND RECOMMENDATION Page 33 of 102

Email communications between Marc Halpern and Ricardo Arias make clear 

that Halpern May was reluctant to file the Notice of Appeal themselves because of 

another THP matter they had pending before Judge Whelan. Evid. Hr’g Ex. 632. 

Marc Halpern did not want Judge Whelan’s first impression of his firm to be: “aren’t 

you guys the ones trying to overturn my fee ruling in the Joe Serov [a.k.a. “Sery”] 

case?” Id. Appellate counsel Marina A. Torres, then with Halpern May, substituted 

in as counsel of record for the THP appeal on February 11, 2022. Ninth Cir. Case 

No. 22-55142, ECF No. 3. While this series of events is uncontroverted, there is 

considerable dispute over the reasons behind Vega’s and Arias’s decision not to take 

the appeal themselves. 

Vega’s and Arias’s explanation of why they did not take the appeal differs 

significantly from Hagans’s and Torres’s recollections. Vega testified that, upon 

reading Judge Whelan’s order and reasoning, he had a telephone conference call 

with Hagans during which he told Hagans he did not believe there was any basis to 

appeal and advised him against doing so. Evid. Hr’g Tr. vol. 2, 468–69 (Testimony 

of Gregory Vega); see also Evid. Hr’g Tr. vol. 2, 563 (Testimony of Ricardo 

Arias) (“[Gregory Vega and I] were adamant that we shouldn’t appeal. So we 

conveyed that to Mr. Hagans.”). Arias later testified that he believed a majority 

of the phone call with Hagans centered on the standard of review on appeal (abuse 

of discretion). Evid. Hr’g Tr. vol. 3, 580 (Testimony of Ricardo Arias). Hagans, 
REPORT AND RECOMMENDATION Page 34 of 102

on the other hand, plainly insisted that Vega’s and Arias’s testimony was “not true,” 

and he was “never told that the appeal was inappropriate.” Evid. Hr’g Tr. vol. 3, 

813 (Testimony of Donald Hagans). Instead, Hagans said the reason that Vega and 

Arias did not want to do the appeal was “very simple”: it was because they “did not 

do appeals.” Id. at 814. The only thing upon which Hagans appears to agree with 

Vega and Arias is that the three attorneys did discuss the “difficult standard one 

would have on appeal,” but he vigorously maintained that they never discussed the 

fact that the Rule 60(b)(2) argument lacked merit. Id. at 855. 

For her part, Marina A. Torres testified that she pulled her call records from 

Halpern May and discovered a four-minute call with Ricardo Arias on February 10, 

2022. Evid. Hr’g Tr. vol. 3, 635–36, 678 (Testimony of Marina Torres). Torres 

testified that she asked Arias if there was anything about the case that she needed to 

know. Id. at 636. Arias responded that everything she needed to know was included 

in the district court record and the reason his firm did not take the case was because 

they do not handle appeals. Id. Arias confirmed that he never communicated to 

Torres his firm’s conclusion that there were no meritorious grounds for an appeal. 

Evid. Hr’g Tr. vol. 3, 584–85 (Testimony of Ricardo Arias). 

The only evidence, beyond their own testimony, that Vega or Arias said 

anything to anyone about the lack of merit in an appeal is a single email from Donald 

Hagans to Vega and Arias from January 28, 2022. The email says that Hagans 
REPORT AND RECOMMENDATION Page 35 of 102

“[f]ully understand[s] the odds . . . and a reluctance to appeal.” Evid. Hr’g Ex. 317. 

This could be interpreted to corroborate Vega’s and Arias’s testimony. However, 

Hagans explained that “the odds” referenced the standard of review on appeal, which 

he agreed the three of them discussed, and that “reluctance to appeal” referenced 

Vega’s and Arias’s disinterest in appellate work. Evid. Hr’g Tr. vol. 3, 854–55. 

Alone, both of these interpretations seem equally plausible. 

Looking at the complete body of evidence, however, it appears to the Special 

Master that it far more likely that Vega and Arias never communicated any 

misgivings to Hagans, Torres, or anyone else about the merits of the appeal beyond 

the exacting standard of review. In addition to gauging the demeanor of each witness 

while they testified, including their mannerisms, ability to recall details, hostility to 

the examiner, and congruity with other evidence presented during the hearing, the 

Special Master also makes that factual finding from the following considerations. 

For one, Vega and Arias did not produce any contemporaneous notes, emails, 

correspondence, or internal memoranda memorializing their belief that an appeal 

would be meritless and contrary to controlling law. For such a strong objection 

conveyed to a client, such a practice is, in the undersigned’s experience handling 

similar cases, routine. Moreover, Vega’s and Arias’s contention that any appeal 

would be frivolous is difficult, if not impossible, to square with their testimony that 

they stand by the arguments raised in their motion for reconsideration separate and 
REPORT AND RECOMMENDATION Page 36 of 102

apart from the Rule 60(b)(2) “new evidence” argument. See Evid. Hr’g Tr. vol. 2, 

452 (Testimony of Gregory Vega) (“I still would have brought [the motion for 

reconsideration] . . . under the . . . (b)(3) section for fraud, misconduct, and the 

all relief available.”); id. at 531 (“I believed the 60(b)(3) and 60(b)(6) . . . were 

good arguments.”); Evid. Hr’g Tr. vol. 2, 561 (Testimony of Ricardo Arias) 

(stating that he would have still brought the motion for reconsideration under 

subsections 60(b)(3) and (6)). 

Additionally, there is substantial evidence to support the conclusion that Vega 

and Arias did not take the appeal simply because they are not appellate attorneys. 

First, Arias himself testified that he has never handled an appeal, and that he believed 

it had been years since Vega last did. Evid. Hr’g Tr. vol. 3, 622 (Testimony of 

Ricardo Arias). Second, in an email from Ricardo Arias to Marc Halpern on 

February 3, 2022, Arias stated that “[n]either Gregory A. Vega or I are appellate 

attorneys . . . [and] [w]e expect that a substitution by your firm be made 

expeditiously.” Evid. Hr’g Ex. 632; see Evid. Hr’g Ex. 633 (Email from Marc 

Halpern to Marina Torres from February 1, 2022) (“Seltzer Caplan handled 

the district court case but say they don’t really do appeals.”). Third, Hagans’s 

and Torres’s testimony confirms that Vega and Arias communicated that the reason 

they were not taking the appeal was due to their lack of appellate experience. 
REPORT AND RECOMMENDATION Page 37 of 102

Finally, the two attorneys continued to represent THP in the ongoing federal 

criminal investigation. That investigation kept their firm heavily engaged in billable 

work for several months. They may well have been reluctant to push their client too 

hard on this appeal in order to maintain good continuing relations with Mr. Hagans. 

 Accordingly, the Special Master finds that based on the entirety of the 

evidence, Vega and Arias never communicated a belief that an appeal would lack 

merit to Hagans in the weeks between Judge Whelan’s order denying their motion 

for reconsideration and the appeal to the Ninth Circuit. Nor did they say that to 

Marina A. Torres. Evid. Hr’g Tr. vol. 3, 636–37 (Testimony of Marina Torres). 

The lack of contemporaneous documentation serves as evidence suggesting that they 

may never have harbored these reservations at all. Instead, the Special Master finds 

that the reason they did not take the appeal was simply based on the fact that neither 

Vega nor Arias had appellate experience and felt their time was better spent 

continuing to represent THP in the ongoing criminal investigation. 

2. THP’s Initial Appeal to the Ninth Circuit

After managing partner Marc Halpern agreed to undertake the appeal on 

behalf of THP, he determined that Marina A. Torres, an experienced attorney with 

Halpern May, would serve as counsel of record for the case. See Evid. Hr’g Ex. 

632; Evid. Hr’g Tr. vol. 3, 634 (Testimony of Marina Torres). Torres testified 

that it was her practice whenever she began working on an appeal to reach out to 
REPORT AND RECOMMENDATION Page 38 of 102

trial counsel and ask if there was anything particular about the case that she should 

know before starting on the opening brief. Evid. Hr’g Tr. vol. 3, 635 (Testimony 

of Marina Torres). She testified that this was the purpose of her call to Ricardo 

Arias on February 10, 2022. As discussed above, there is some dispute over the 

content of this initial call. See Evid. Hr’g Ex. 318. However, it is undisputed that 

Arias did little more than ensure that Torres had the district court record. What is 

certain is that he did not inform Torres about any earlier Dennis Omanoff affidavits 

or raise any red flags surrounding the “new evidence” argument. 

Torres also had an introductory call with Donald Hagans to discuss the case. 

During this call, Torres told Hagans that she thought THP’s chances on appeal were 

low but that the issues had merit based on what she knew at the time. Evid. Hr’g 

Tr. vol. 3, 637 (Testimony of Marina Torres). Hagans indicated that he wanted to 

move forward with the appeal regardless, partially because he believed it would give 

TPW some leverage in the ongoing Wyoming Antitrust Litigation. Id. at 695–96. 

In all of Torres’s conversations and email exchanges with Donald Hagans during the 

preparation of the appeal, he never told her about the existence of any prior drafts of 

the Omanoff affidavits or the extent of his personal engagement with Omanoff in 

May or June of 2021. See id. at 638; Evid. Hr’g Tr. vol. 3, 814–15 (Testimony of 

Donald Hagans). Hagans attributes this to the fact that he “bought the Kool-Aid” 

with respect to Vega’s and Arias’s theory on why the October 29, 2021, Omanoff 
REPORT AND RECOMMENDATION Page 39 of 102

Allegations constituted “new evidence” under Rule 60(b)(2) and therefore did not 

consider those earlier communications relevant to the appeal. Evid. Hr’g Tr. vol. 

3, 815–16 (Testimony of Donald Hagans). 

In the end, relying on the district court record and her conversations with 

Hagans, Torres prepared an opening brief for the Ninth Circuit appeal that 

effectively regurgitated the arguments Vega and Arias made in their application for 

reconsideration in the San Diego district court. Thus, THP doubled down on its 

claim that the Omanoff Allegations were “new evidence” warranting reconsideration 

of the fee award and could not have been discovered with reasonable diligence prior 

to Omanoff filing his affidavit in the Wyoming Antitrust Litigation on October 29, 

2021. See Evid. Hr’g Ex. 211, 28–32. 

In drafting the opening brief, Torres testified that she did not thoroughly 

review the Wyoming pleadings, despite the fact that those pleadings served as a 

strong basis for Judge Whelan’s denial of the underlying application for 

reconsideration. Evid. Hr’g Tr. vol. 3, 714 (Testimony of Marina Torres). If she 

had, she may have more seriously questioned the plausibility that Mr. Omanoff could 

have “only come forward” with a twelve-page affidavit and hundreds of pages of 

exhibits in the two days between Judge Whelan denying the application for 

reconsideration on October 27, 2021, and the affidavit’s filing in Wyoming on 
REPORT AND RECOMMENDATION Page 40 of 102

October 29, 2021.9 In Torres’s defense, even if she had thoroughly studied those 

pleadings, she could not have conclusively determined that Omanoff was 

cooperating with TPW/THP in May or June of 2021. Only Hagans, Vega, or Arias 

could have communicated that information to her—and they never did. She never 

spoke or communicated with Omanoff. Evid. Hr’g Tr. vol. 3, 658 (Testimony of 

Marina Torres). 

Once Torres concluded drafting the brief, replete with the same false 

statements about when Omanoff “came forward” and what THP knew about his 

cooperation prior to October 29, 2021, she sent it to Marc Halpern for his review. 

Evid. Hr’g Tr. vol. 3, 643–44 (Testimony of Marina Torres). Halpern approved 

it with minor edits, after which Torres sent the brief to Hagans for final review and 

approval before filing it. Id. at 644–45. Just as he did with Arias’s draft of the 

application for reconsideration, Hagans approved Torres’s draft opening brief 

without any edits. Id. at 645; Evid. Hr’g Ex. 605. Torres filed that brief in the 

Ninth Circuit on May 4, 2022. 

On December 9, 2022, a panel consisting of U.S. Circuit Judges Marsha S. 

Berzon, Ryan D. Nelson, and Bridget S. Bade heard oral argument in THP’s appeal. 

During her presentation, Torres did not even address the “new evidence” argument. 

9

 Indeed, this is an argument Petitioners made in briefing to the San Diego district 

court in opposition to THP’s application for reconsideration. See S.D. Cal. Case 

No. 3:18-cv-02352-W-AHG, ECF No. 35, at 6 n.5.
REPORT AND RECOMMENDATION Page 41 of 102

Instead, she focused on what she perceived to be the “much stronger” issue in the 

case, challenging Judge Whelan’s calculation of the actual fee award. Evid. Hr’g 

Tr. vol. 3, 647 (Testimony of Marina Torres). In the last minute of Torres’s 

rebuttal, Judge Berzon asked whether counsel was essentially abandoning the new 

evidence argument, at which point Torres chuckled and acknowledged that she 

“thought it best to focus most of [her] time on the first argument.” Id. at 653. Judge 

Berzon commented that she thought that was a wise decision. In the end, the panel 

affirmed the district court in a memorandum disposition filed on January 12, 2023. 

3. THP’s Petition for Panel Rehearing

On January 26, 2023, THP filed a petition for panel rehearing, thereby tripling 

down on its argument that Omanoff’s October Affidavit constituted new evidence. 

See Evid. Hr’g Ex. 105. Specifically, THP argued that it “had not previously been 

aware of the . . . evidence detailed in Omanoff’s affidavit [] until two days after the 

order was signed” and that the panel’s disposition “ignore[d] that Omanoff’s 

testimony did not come to light until the day he came forward and day the affidavit 

was signed.” Id. at 6–7. 

Marina A. Torres prepared the substance of the petition for panel rehearing at 

the direction of Donald Hagans. Evid. Hr’g Tr. vol. 3, 655, 734–35 (Testimony of 

Marina Torres). However, she left Halpern May to join her current firm, Willkie 

Farr & Gallagher, as a partner roughly a week before the petition was actually filed. 
REPORT AND RECOMMENDATION Page 42 of 102

Evid. Hr’g Tr. vol. 1, 48 (Testimony of Thomas Rubinsky). Thomas Rubinsky, 

an associate at Halpern May, was tasked with taking the petition across the finish 

line. By the time Rubinsky inherited the petition, all of the substantive arguments 

were complete. Id. at 49. Having come onto the case so late, all Rubinsky did was 

make some stylistic changes, check the citations, and actually file the petition with 

the Ninth Circuit. Id. He billed just 2.8 hours to the matter.10 Id. at 84. 

As for Hagans, he approved the petition for rehearing as a matter of course. 

Evid. Hr’g Tr. vol. 3, 819–21 (Testimony of Donald Hagans). The panel denied 

the petition for rehearing on January 30, 2023, and the mandate issued in the case on 

February 7, 2023. Ninth Cir. Case. No. 22-55142, ECF Nos. 41–42. 

10 Based on the testimony elicited during the evidentiary hearing in this matter, the 

Special Master issued an order discharging the Order to Show Cause with regard to 

Mr. Rubinsky. Ninth Cir. Case No. 23-80039, ECF No. 83. The Special Master 

concludes that Rubinsky did not engage in sanctionable conduct. Although 

Rubinsky signed and filed a petition that included material misrepresentations and 

false statements without conducting an inquiry into the factual bases underlying 

those statements, the Special Master finds that Rubinsky, as an associate at Halpern 

May, had little control over the merits and was effectively “thrown in at the last 

minute” to cover for the departure of Ms. Torres. Moreover, as this Report and 

Recommendation has detailed, the incomplete and misleading information available 

to Halpern May attorneys when the petition for panel rehearing was filed supported 

the arguments included therein. For these reasons, the Special Master recommends 

Thomas Rubinsky “remain in good standing with the Ninth Circuit Court of Appeals 

and that no sanctions or other disciplinary action be imposed against him.” Id. 
REPORT AND RECOMMENDATION Page 43 of 102

G. GTP’s Motion for Sanctions and the Appointment of the Special 

Master 

On February 13, 2023, GTP filed a motion for sanctions against THP with the 

Ninth Circuit panel. Ninth Cir. Case. No. 22-55142, ECF No. 43. The motion was 

triggered by a new filing submitted by TPW in the Wyoming Antitrust Litigation on 

January 27, 2023. D. Wyo. Case No. 2:21-cv-00099-ABJ, ECF No. 135. In the 

Wyoming filing, TPW now provided a timeline detailing Omanoff’s cooperation. 

Id. at ¶ 3. The timeline confirmed that Omanoff began cooperating with TPW 

around May 2021, after he was served with the complaint in the Wyoming Antitrust 

Litigation, and that he provided TPW with “[a]ffidavits, documents, and other 

evidence.” Id. Accordingly, in its motion for sanctions, GTP argued that THP’s 

repeated assertion in the California Qui Tam Litigation that the October 2021 

Omanoff Affidavit contained new, previously undiscoverable evidence was false, 

misleading, and sanctionable. Ninth Cir. Case. No. 22-55142, ECF No. 43. 

Torres testified that Marc Halpern called her at Willkie Farr to inform her 

about the motion. Evid. Hr’g Tr. vol. 3, 660 (Testimony of Marina Torres). 

Halpern asked if Torres would be interested in litigating the motion for sanctions 

given her work on the underlying appeal. Id. at 660–61. After consulting with the 

partnership at her new firm, she accepted and made a new appearance as attorney of 

record for THP. Id. at 661; Ninth Cir. Case No. 22-55142, ECF Nos. 44–45. 
REPORT AND RECOMMENDATION Page 44 of 102

Torres testified that the first red flag in all of this litigation was raised in her 

mind when she read GTP’s motion for sanctions. Evid. Hr’g Tr. vol. 3, 657 

(Testimony of Marina Torres). This was due to the substance of GTP’s argument 

and also the Wyoming pleading referenced in the motion, which indicated that 

Omanoff had been cooperating since May 2021. Id. at 657, 659, 661. Torres’s first 

step was to call Donald Hagans. Id. at 661–62. On February 14, 2023, she followed 

up with Hagans via email. See Evid. Hr’g Ex. 623. Her email, in relevant part, 

stated: 

It would be helpful to get a timeline of the interactions with Omanoff. 

[GTP is] claiming that the “admission” in the January TPW filings 

shows that THP knew, as early as May 2021 and prior to Oct 2021, of 

the new evidence that was in Omanoff’s affidavit. So the interactions 

during that time will be important to understand (and possibly 

incorporate into the briefing). 

Id. Two days later, on the same email chain, she followed up and said, “I’ve begun 

drafting the brief and just want to make sure I have an accurate accounting of 

THP/TPW’s interactions with Omanoff.” Id. 

 Hagans eventually got back to Torres on February 22, 2023. In his email, 

Hagans attached thirteen filings from the Wyoming Antitrust Litigation and 

indicated that the filings “provide[] the full context.” Evid. Hr’g Ex. 624. The body 

of Hagans’s email included several paragraphs of information that are, admittedly, 

difficult to decipher. However, Hagans was adamant that GTP’s argument on the 

“key issue of whether we were actively [] working with Omanoff . . . is simply not 
REPORT AND RECOMMENDATION Page 45 of 102

the case.” Id. Hagans said that while he wished that he could “do more on the initial 

affidavits . . . what happened is as set out by Attorney Vega and his firm.” Id. While 

Hagans did hint to the fact that Omanoff was cooperating earlier than October 2021, 

he stated that “much of what was provided by Omanoff was privileged,” his 

cooperation came “in stages,” and the information could not be discovered or used 

while Omanoff remained adverse. Id. Torres testified that she recalled Hagans 

telling her that information from Omanoff came in “dribs and drabs” during the 

summer of 2021, but that there were certainly no substantive interactions with 

Omanoff at that time. See Evid. Hr’g Tr. vol. 3, 686, 737 (Testimony of Marina 

Torres). 

During the evidentiary hearing in this matter, Hagans confirmed that he did 

not disclose the May affidavits to Torres in their conversations about the motion for 

sanctions. Evid. Hr’g Tr. vol. 3, 856. The reasons Hagans offered for not providing 

this information were contradictory. At one point he testified that he “didn’t think 

[the May 2021 Omanoff affidavits] were relevant based on the legal argument that 

was being presented” in Torres’s draft of the opposition to GTP’s motion for 

sanctions. Id. at 824. But later, he testified that he did not tell Torres about the 

affidavits because he did not remember that they existed. Id. at 856. In any event, 

Hagans acknowledged that his failure to disclose the full scope of his 

communications with Omanoff in May and June of 2021 to Torres or the court, 
REPORT AND RECOMMENDATION Page 46 of 102

including the existence of seven or more draft affidavits created during those 

months, was “bush league.” Id. at 825. 

 Torres took Hagans’s February 22, 2023, email to mean that the arguments 

Vega and Arias made in their application for reconsideration were accurate. Evid. 

Hr’g Tr. vol. 3, 667 (Testimony of Marina Torres). Still, Torres reached out to 

both Vega and Arias directly to confirm that her understanding of the timeline 

surrounding Omanoff’s cooperation was correct. See Evid. Hr’g Ex. 626. Torres 

attached both the motion for sanctions and the memorandum of points and 

authorities that Arias prepared in support of the underlying application for 

reconsideration. Id. She stated: 

Global Tungsten is essentially claiming that we misled the courts by 

claiming that Omanoff “came forward” on October 29, 2021 (the day 

the affidavit was signed), even though he had been cooperating with 

TPW since May 2021. Our opposition is due tomorrow, and I just want 

to make sure that I’m accurately representing the interactions with 

Omanoff that occurred from May 2021 to October 2021. 

Id. 

 Arias conferred with Vega and got back to Torres with a response that the 

Special Master finds deceptive and inexplicable. He said: “I spoke with [Vega], and 

he confirmed we never had any interactions with Dennis Omanoff. On November 

1, 2021, we received the Omanoff declaration filed in the Wyoming litigation from 

Don Hagans which we subsequently included in the Motion for Reconsideration of 

the Court’s Order.” Evid. Hr’g Ex. 628. 
REPORT AND RECOMMENDATION Page 47 of 102

Vega and Arias both attempted to explain this communication during the 

evidentiary hearing. Vega testified that he “assumed” Torres was getting the 

information about the May Omanoff communications and declarations from Hagans. 

Evid. Hr’g Tr. vol. 2, 521 (Testimony of Gregory Vega). Arias similarly assumed 

that Torres “already knew about the . . . May affidavits.” Evid. Hr’g Tr. vol. 3, 594 

(Testimony of Ricardo Arias). Arias also testified that the reason he did not 

disclose the existence of any earlier draft Omanoff affidavits was because “she never 

asked.” Id. at 595. Worse still, although Arias apparently recognized that the 

motion for sanctions “looked serious,” he testified that he did not think he even “read 

the thing.” Id. at 594. 

One fact is clear: neither Vega nor Arias communicated anything to Ms. 

Torres about THP’s interactions with Omanoff in May and June of 2021. This is 

despite the fact that Vega testified he was well aware of the mistakes that he and 

Arias had made in presenting the new evidence argument to the district court below. 

Indeed, if Vega and Arias are taken at their word, when they were communicating 

with Torres in February 2023, they held a firm conviction that THP never should 

have appealed Judge Whelan’s order. Yet, when Torres sought their help in 

responding to the motion for sanctions that had to do with the very argument Vega 

and Arias apparently now realized was made in error in the first instance because of 
REPORT AND RECOMMENDATION Page 48 of 102

the May and June Omanoff affidavits and communications, they still failed to 

disclose that information to her. 

Based on the communications she had with Hagans, Vega, and Arias, Torres 

prepared the opposition to GTP’s motion for sanctions. The representations in that 

opposition quadrupled down on the new evidence argument. Torres testified that 

she believed the full scope of THP’s communications with Omanoff were as 

represented in the underlying application for reconsideration and that any 

communications TPW had with Omanoff between May and October 2021 were 

incredibly “limited” and potentially even “hostile.” Evid. Hr’g Tr. vol. 3, 688 

(Testimony of Marina Torres). 

Still, the language in the opposition changed somewhat to incorporate 

Torres’s understanding that there were at least some communications with Omanoff 

during that period of time. For example, the opposition acknowledges for the first 

time that there may have been some May communications between Omanoff and 

TPW but that those communications were “piecemeal, conducted through layers of 

attorneys, and, critically, were not statements made under penalty of perjury.” Evid. 

Hr’g Ex. 214, at 19. On the witness stand, Torres maintained that when she 

submitted the opposition to sanctions, she still “had no idea of the existence of any 

draft declarations or affidavits.” Evid. Hr’g Tr. vol. 3, 689 (Testimony of Marina 

Torres).
REPORT AND RECOMMENDATION Page 49 of 102

Once again, Hagans approved her draft of the opposition to GTP’s motion for 

sanctions without any edits. Id. at 672–75; Evid. Hr’g Exs. 629, 630. Torres filed 

the opposition on February 23, 2023. Evid. Hr’g Ex. 214. 

The Special Master finds that although Torres should have probed further into 

the scope of communications with Omanoff prior to October 2021, she acted with 

reasonable diligence in preparing the opposition to GTP’s motion for sanctions. 

Torres’s representations in the opposition were made in good faith based on the 

information she had at the time from her client and qui tam counsel. On the other 

hand, the Special Master finds that, based on the interactions detailed above, Hagans, 

Vega, and Arias acted with reckless disregard for the truth in their communications 

with Torres surrounding GTP’s motion for sanctions. 

H. Relevant Developments in the Wyoming Antitrust Litigation 

Concurrently with the Ninth Circuit appeal in the California Qui Tam 

Litigation, motion practice was ongoing in the Wyoming Antitrust Litigation. Goetz 

filed the verified First Amended Complaint in Wyoming on June 25, 2021. D. Wyo. 

Case No. 2:21-cv-00099-ABJ, ECF No. 11. The First Amended Complaint relied 

significantly on the numerous draft Omanoff affidavits from May and June 2021, 

and included direct quotes from those drafts, but it did not include an attached 

Omanoff affidavit. Id. at ¶¶ 23, 43(d), 43(f). Later in the Wyoming litigation, Judge 

Johnson granted a motion to dismiss filed by all defendants in the case except for 
REPORT AND RECOMMENDATION Page 50 of 102

Dennis Omanoff and Alonso Martinez, given the broad release and waiver language 

covering all known and unknown claims in the Pennsylvania litigation settlement 

agreement. D. Wyo. Case No. 2:21-cv-00099-ABJ, ECF No. 75. That ruling is 

now on appeal to the Tenth Circuit Court of Appeals, Case No. 23-8018. 

On September 8, 2022, Goetz filed on behalf of TPW a Motion for Leave to 

File a Second Amended Complaint and asked Judge Johnson to reconsider his order 

granting the various defendants’ motion to dismiss. See Evid. Hr’g Ex. 206. In her 

motion, Goetz made some of the same misleading arguments that appeared in Vega’s 

and Arias’s application for reconsideration in the California Qui Tam Litigation. 

Namely, she declared that “Omanoff broke ranks after the filing of the Plaintiff’s 

First Amended Verified Complaint and then again following the Court’s Order (ECF 

75).” Id. at ¶ 10; see also Evid. Hr’g Ex. 253, at ¶ 6 (“Responding Defendants 

mistakenly assumed that TPW previously had access to all information held by 

Mr. Omanoff. It absolutely did not . . . . TPW had no legal right to the evidence 

and could not force Mr. Omanoff to provide such evidence.”). 

While Goetz appears to be alluding to the fact that Omanoff provided 

additional documents and evidence after she filed the First Amended Complaint, the 

statement that Omanoff “broke ranks” after it was filed is simply not true. See Evid. 

Hr’g Tr. vol. 2, 372 (Testimony of Megan Overmann Goetz). Goetz filed her 

First Amended Complaint on June 25, 2021, after Hagans’s meetings with Omanoff 
REPORT AND RECOMMENDATION Page 51 of 102

in Florida in both May and June 2021 and, critically, after Goetz herself had received 

numerous draft affidavits formatted on her own firm’s pleading paper in connection 

with those meetings. 

 To Goetz’s credit, in a filing from January 27, 2023, she provided the 

Wyoming district court with a more detailed, and indeed, more accurate timeline of 

Omanoff’s cooperation with TPW in the Wyoming Antitrust Litigation. D. Wyo. 

Case No. 21-cv-00099-ABJ, ECF No. 135. In that filing, Goetz informed Judge 

Johnson that Omanoff offered to cooperate with TPW in May 2021 and proceeded 

to provide TPW with “[a]ffidavits, documents, and other evidence in stages.” Id. at 

¶ 3. Accordingly, the Special Master finds that Ms. Goetz made some misleading 

statements to the district court in Wyoming, particularly in TPW’s motion seeking 

reconsideration of Judge Johnson’s order granting the motion to dismiss. However, 

taken in context, those misrepresentations are less serious than those lodged by THP 

with the district court in the California Qui Tam Litigation. Moreover, unlike 

counsel in the qui tam matter, Goetz, in subsequent Wyoming filings, provided 

Judge Johnson with more substantive information detailing Omanoff’s cooperation 

and communication with TPW in May and June 2021. 

I. Special Master Proceedings 

 The Ninth Circuit panel obviously recognized that understanding the facts 

behind GTP’s motion for sanctions, as well as the existence of related litigation in 
REPORT AND RECOMMENDATION Page 52 of 102

multiple federal districts, would be important in considering the merits of that 

motion. In an order dated March 30, 2023, the panel appointed the undersigned as 

Special Master under Fed. R. App. P. 48 “to conduct any proceedings he deems 

appropriate to determine the scope of any misconduct, including knowing 

misrepresentations to the district court and this court, pertaining to the Omanoff 

affidavit, Appellant’s application for reconsideration, and this appeal.” Ninth Cir. 

Case No. 23-80039, ECF No. 1, at 4. The panel observed in the Appointment Order 

that: 

TPW’s statement that it was cooperating with Omanoff as early as May 

2021 raises serious questions about whether the repeated 

representations [THP] has made in this case that Omanoff’s 

information constituted “newly discovered evidence that, with 

reasonable diligence, could not have been discovered in time,” were 

frivolous and/or made in bad faith. 

Id. at 3 (quoting Fed R. Civ. P. 60(b)(2)). The Special Master was authorized to 

prepare a written report and recommendation to the panel regarding any potential 

sanctions or disciplinary measures to be imposed against THP and its counsel. Id. 

at 4. 

 The initial status conference with the Special Master took place on May 12, 

2023. Ninth Cir. Case No. 23-80039, ECF No. 2. The parties filed short preconference briefs stating their respective positions. See Ninth Cir. Case No. 22-

55142, ECF Nos. 54, 55. Unsurprisingly, THP’s pre-conference briefing effectively 

restated the arguments Torres made in her opposition to GTP’s motion for sanctions. 
REPORT AND RECOMMENDATION Page 53 of 102

The briefing did not contain any information about Omanoff affidavits from May or 

June of 2021. See Ninth Cir. Case No. 22-55142, ECF No. 54; Evid. Hr’g Tr. 

vol. 3, 834 (Testimony of Donald Hagans). Appearing for THP were Ethan Brown 

and Tom Rickeman of the firm Brown, Neri, Smith & Khan LLP (THP’s Special 

Master counsel), Marina A. Torres, Gregory A. Vega, and Ricardo Arias. Appearing 

for GTP were Jessica Sanderson and Sam Finklestein of the Volkov Law Group. 

Pursuant to the first status conference, the Special Master issued an order setting a 

briefing schedule and scheduling a second status conference for July 7, 2023. Ninth 

Cir. Case No. 23-80039, ECF No. 4. 

1. THP’s Opening Brief and Supporting Declarations

 Attorneys Brown and Rickeman worked on THP’s opening brief for eventual 

filing with the Special Master. In preparing the opening brief, Donald Hagans 

participated in interviews that Brown and Rickeman conducted with Gregory A. 

Vega, Ricardo Arias, Megan Overmann Goetz, and Dennis Omanoff. Evid. Hr’g 

Tr. vol. 3, 832 (Testimony of Donald Hagans). Omanoff’s May affidavits did not 

come up at any point during these various interviews or conversations. Id. 

Eventually, however, Hagans asked Goetz to go through her emails and files in 

connection with any Dennis Omanoff communications that may have occurred in 

May or June of 2021. Id. at 834; Evid. Hr’g Tr. vol. 2, 327–28 (Testimony of 

Megan Overmann Goetz). That email search uncovered one draft Omanoff 
REPORT AND RECOMMENDATION Page 54 of 102

affidavit from May 2021 prepared for the Wyoming Antitrust Litigation. Evid. Hr’g 

Tr. vol. 3, 833 (Testimony of Donald Hagans); see Evid. Hr’g Ex. 514. However, 

none of the relevant parties came forward with the May drafts of the Omanoff 

affidavits prepared for the California Qui Tam Litigation, and Hagans surprisingly 

testified that he did not remember that they existed at the time Brown and Rickeman 

were preparing THP’s opening brief. See Evid. Hr’g Tr. vol. 3, 836–37 (Testimony 

of Donald Hagans). 

Following the initial interviews, Brown and Rickeman filed THP’s opening 

brief with the Special Master on June 12, 2023. Evid. Hr’g Ex. 217. Because Goetz 

had uncovered one May Wyoming affidavit, the brief revealed that Omanoff had 

prepared “an earlier, un-notarized version of an affidavit in May 2021” but asserted 

“[c]ritically, the May 2021 affidavit was prepared solely in connection with the 

Wyoming Suit and was not provided to THP’s counsel in the qui tam case.” Id. at 

5–6. THP filed supporting declarations from Dennis Omanoff, Gregory A. Vega, 

Marina A. Torres, and Megan Overmann Goetz concurrently with its opening brief. 

Id. at 4.

 Omanoff’s declaration indicated that he began cooperating with TPW shortly 

after he was served with the complaint in the Wyoming Antitrust Litigation. Evid. 

Hr’g Ex. 116, ¶ 14. He further stated that he prepared and executed one draft 

affidavit, but that “[n]one of the lawyers involved in the qui tam action in California 
REPORT AND RECOMMENDATION Page 55 of 102

were involved in those discussions.” Id. During the evidentiary hearing, Omanoff 

testified that, at the time he prepared his initial declaration for the Special Master 

proceedings, he did not have any specific recollection of preparing other affidavits 

for the California Qui Tam Litigation. Evid. Hr’g Tr. Vol. 1, 221 (Testimony of 

Dennis Omanoff). He was unable to recall whether he or Hagans drafted the 

declaration. Id. at 220–21. 

Gregory A. Vega’s declaration swore that he and Ricardo Arias had “no 

involvement in drafting the [October] Dennis Omanoff Affidavit” that they used in 

support of their application for reconsideration and only learned that the affidavit 

existed after it was filed in the Wyoming Antitrust Litigation on October 29, 2021. 

Evid. Hr’g Ex. 312, at ¶¶ 4, 6. Further, Vega declared that he and Arias “did not 

make any misrepresentations to the District Court.” Id. at ¶ 9. Vega testified that 

the reason he did not include any information about the May Omanoff affidavits in 

his declaration to the Special Master was because the May affidavits were never 

presented to the San Diego district court. Evid. Hr’g Tr. vol. 2, 479 (Testimony of 

Gregory Vega). At the same time, Vega said he read the Ninth Circuit’s 

Appointment Order prior to preparing his declaration, which explicitly stated that 

the purpose of the Special Master’s inquiry was to determine whether the repeated 

allegations that Omanoff only “came forward” in October 2021 were untrue. Id. at 

478; Ninth Cir. Case No. 23-80039, ECF No. 1. Arias, for his part, testified that 
REPORT AND RECOMMENDATION Page 56 of 102

he was aware that Vega was making characterizations on his behalf in Vega’s 

declaration, and had the chance to review it, but did not discuss with Vega the need 

to make any changes to the declaration before Vega filed it. Evid. Hr’g Tr. vol. 3, 

620–21 (Testimony of Ricardo Arias). 

Accordingly, the Special Master finds that, once again, Vega and Arias acted 

with reckless disregard for the truth of the statements included in Vega’s declaration 

before the Special Master. Vega and Arias were apprised of the nature of the Special 

Master’s inquiry at the status conferences they attended but failed to disclose the full 

scope of Omanoff’s cooperation in the months prior to October 2021. 

 Rickeman emailed Megan Overmann Goetz a draft of her own declaration on 

the morning of June 12, 2023. Evid. Hr’g Tr. vol. 2, 340 (Testimony of Megan 

Overmann Goetz); Evid. Hr’g Ex. 511. At this point, Goetz had already been 

working with a third-party IT provider searching her firm’s databases to uncover any 

communications related to Dennis Omanoff’s cooperation with TPW prior to 

October 2021. Evid. Hr’g Tr. vol. 2, 335–36 (Testimony of Megan Overmann 

Goetz); Evid. Hr’g Ex. 501. Goetz testified that when she was asked to provide a 

declaration for the Special Master proceeding, she did not have a full understanding 

of what the proceedings were about. Evid. Hr’g Tr. vol. 2, 338 (Testimony of 

Megan Overmann Goetz). She did not read any of the briefing in the matter, she 

did not read any of the pleadings in the underlying qui tam action, and she did not 
REPORT AND RECOMMENDATION Page 57 of 102

read GTP’s motion for sanctions. Id. at 338–40. According to Goetz, she simply 

understood the matter as “continued back and forth between Global Tungsten and 

THP.” Id. at 338. 

Goetz’s final declaration included some troubling statements. First, the 

declaration makes no mention of any Dennis Omanoff affidavits from May or June 

of 2021. See Evid. Hr’g Ex. 500. Second, Goetz states that she had “no substantive 

involvement in the preparation of the draft affidavit and provided no substantive 

input on the facts contained in the draft [she] received.” Id. (emphasis added). 

However, again, Goetz did not prepare the first draft of her declaration. Evid. Hr’g 

Tr. vol. 2, 340 (Testimony of Megan Overmann Goetz). Eighteen minutes after 

Rickeman sent Goetz a draft declaration, she returned redline edits and comments. 

See Evid. Hr’g Ex. 511. Despite her contention that she had “no substantive 

involvement” in the creation of the Omanoff affidavit (when it is now known that 

she was in contact with Hagans throughout the entire process and provided a draft 

of several Omanoff affidavits on her firm pleading paper), Goetz does acknowledge 

in a marginal comment note in the red-lined edits that she was asked to “provide the 

caption, do some formatting and definitely fix / correct typos.” Id. Finally, Goetz 

deleted a paragraph that claimed she did not receive any evidence from Mr. Omanoff 

that could have been used in a court proceeding prior to the October 29, 2021, 

affidavit. Id. 
REPORT AND RECOMMENDATION Page 58 of 102

 To be sure, Goetz should have made a more concerted effort to uncover the 

nature of the Special Master proceedings for which she was being asked to file a 

declaration under the penalty of perjury. Her signed declaration includes misleading 

statements about the nature and scope of her involvement that fold into a larger 

pattern of widespread attorney misconduct in this case. However, the Special Master 

finds that Goetz was merely negligent in allowing this declaration to have been filed 

in its final form. She did not act in bad faith or with the intention to mislead the 

Special Master. 

2. THP’s Request to Correct Its Opening Brief

 Shortly before GTP’s answer became due, THP filed a request for leave to 

correct its opening brief. THP claimed that it had “discovered that certain statements 

in [its] Opening Brief [were] not accurate.” Evid. Hr’g Ex. 221. Namely, THP’s 

Special Master counsel “learned for the first time that the May 2021 affidavit by 

Dennis Omanoff referenced in the Opening Brief was transmitted to THP’s qui tam

counsel in late May 2021.” Id. The Special Master granted THP’s motion to file a 

corrected opening brief, reset the status conference for July 21, 2023, and granted 

GTP additional time to file its answering brief. Ninth Cir. Case No. 23-80039, 

ECF No. 12. 

 The basis for THP’s request to correct its opening brief came after THP’s 

Special Master counsel transmitted a copy of the original opening brief to Vega and 
REPORT AND RECOMMENDATION Page 59 of 102

Arias for review on June 13, 2023. Evid. Hr’g Ex. 314. In the cover email, THP’s 

Special Master counsel reported that they had uncovered the May 2021 Wyoming 

affidavit but made clear in their opening brief that they believed “this early affidavit 

was never provided to THP’s [qui tam] counsel.” Id. Vega wrote back to inform 

THP’s Special Master counsel for the first time that they had in fact received a signed 

Omanoff affidavit in May 2021.11 Id.; Evid. Hr’g Tr. vol. 2, 491 (Testimony of 

Gregory Vega). Despite multiple interviews and conversations in advance of the 

opening brief being filed, this was the first time that anyone had made THP’s Special 

Master counsel aware of the fact that THP’s qui tam counsel was receiving 

information and affidavits from Omanoff as early as May 2021. And as a result of 

the corrected brief, it was the first time in these lengthy proceedings that any court 

had been made aware of that fact as well. 

 GTP filed a timely answering brief suggesting that the Ninth Circuit could 

now “impose joint and several liability on [THP] and its counsel” based on the record 

before the court and particularly in light of THP’s recent admission that it had a May 

2021 draft of the Omanoff Affidavit. Ninth Cir. Case No. 23-80039, ECF No. 16, 

at 2. In the alternative, GTP requested that the Special Master issue an order to show 

11 Despite this apparent revelation on Vega’s part, he made no effort to correct his 

declaration to the Special Master in which he claimed that he had not received an 

Omanoff affidavit prior to November 1, 2021. When asked why not at the second 

status conference, he froze. Ninth Cir. Case No. 23-80039, ECF No. 32, at 21. 
REPORT AND RECOMMENDATION Page 60 of 102

cause why sanctions should not issue, and that he question counsel under oath 

regarding their knowledge of the May 2021 affidavit. Id. GTP also requested that 

the Special Master require production of “all drafts of Omanoff’s affidavit.” Id. at 

27.

 The Special Master subsequently issued an order requiring production of “the 

May 2021 draft Dennis Omanoff Affidavit along with any related drafts and 

communications between THP’s qui tam counsel and TPW’s counsel.” Ninth Cir. 

Case No. 23-80039, ECF No. 18. THP’s Special Master counsel was further 

ordered to submit a declaration explaining the precise details behind the transmittal 

of the May 2021 affidavit from TPW’s counsel to THP’s qui tam counsel. Id. 

 THP’s responsive filings on July 19, 2021, were nothing short of shocking. 

Ninth Cir. Case No. 23-80039, ECF No. 22. THP admitted that: (1) THP and TPW 

share the same corporate counsel, Donald Hagans; (2) Hagans met with Omanoff in 

May 2021 and the two drafted several affidavits; (3) Hagans and Omanoff drafted, 

and Omanoff executed, a notarized affidavit dated May 27, 2021, for potential filing 

in the California Qui Tam Litigation; (4) Hagans transmitted that signed affidavit, 

and other drafts, to THP and TPW’s outside counsel for the California Qui Tam

Litigation and for the Wyoming Antitrust Litigation. See id. Acknowledging the 

gravity of these disclosures, THP offered to stipulate to the entry of sanctions against 

it. Id. 
REPORT AND RECOMMENDATION Page 61 of 102

 Following the status conference on July 21, 2023, the Special Master then 

issued an Order to Show Cause why “sanctions should not be imposed on” THP, 

Gregory A. Vega, Ricardo Arias, Megan Overmann Goetz, Marina A. Torres, 

Thomas Rubinsky, and Donald Hagans for the “numerous misrepresentations 

[Respondent] caused to be filed in various courts.” Ninth Cir. Case No. 23-80039, 

ECF No. 31. The Special Master further ordered an evidentiary hearing to convene 

on August 8, 2023, in Coeur d’Alene, Idaho. Id. The following witnesses appeared 

for the three-day evidentiary hearing where they testified under oath before the 

Special Master subject to cross-examination: (1) Dennis Omanoff; (2) Russell 

Lewis; (3) Donald Hagans, Esq.; (4) Jerry Alexander, Esq.12; (5) Megan Overmann 

Goetz, Esq.; (6) Gregory A. Vega, Esq.; (7) Ricardo Arias, Esq.; (8) Marina A. 

Torres, Esq.; and (9) Thomas Rubinsky, Esq. 

III. CONCLUSIONS OF LAW 

A. Monetary Sanctions 

Petitioners’ February 13, 2023, Motion for Sanctions precipitated these 

Special Master proceedings. Ninth Cir. Case No. 22-55142, ECF No. 43. In that 

motion, Petitioners asked the Ninth Circuit panel to hold THP and its attorneys 

jointly and severally liable for all of Petitioners’ fees and expenses incurred in this 

12 Dallas antitrust attorney Jerry Alexander served as THP’s consulting counsel in 

the Wyoming Antitrust Litigation though he is not counsel of record there. 
REPORT AND RECOMMENDATION Page 62 of 102

litigation starting on October 28, 2021, the date on which the San Diego district court 

entered its fee award.13 Id. at 19–21. The Real Parties in Interest in these 

proceedings were provided with notice that they too may be subject to sanctions in 

their individual capacity through the Special Master’s Order to Show Cause and 

were provided with ample opportunity to be heard, both through extensive briefing 

and a three-and-one-half-day evidentiary hearing (including closing arguments). 

The Special Master concludes that monetary sanctions are appropriate as to THP and 

Real Parties in Interest Donald Hagans, Gregory A. Vega, and Ricardo Arias. 

1. Sanctions Pursuant to THP’s Stipulation

THP first stipulated to the entry of a monetary sanctions award against it on 

July 19, 2023, stating: 

THP is amenable to paying the reasonable fees and costs incurred by 

Petitioners in connection with (i) THP’s application for 

reconsideration, filed in the District Court; (ii) the limited portion of the 

Ninth Circuit appeal addressing the application for reconsideration (as 

opposed to the appeal of the District Court’s initial ruling); and (iii) 

Petitioners’ motion for sanctions, including fees incurred in connection 

with this Special Master proceeding. 

Ninth Cir. Case No. 23-80039, ECF No. 22. THP requested the opportunity to 

brief the “the appropriate allocation of fees incurred in connection with the Ninth 

Circuit appeal” and “address the reasonableness” of Petitioners’ fees and costs. Id. 

13 Petitioners reiterated this position in their updated fee application filed with the 

Special Master on October 13, 2023. See Ninth Cir. Case No. 23-80039, ECF No. 

91, at 1. 
REPORT AND RECOMMENDATION Page 63 of 102

That brief was received on October 20, 2023. See Ninth Cir. Case No. 23-80039, 

ECF No. 92.

Notwithstanding THP’s stipulation, the Ninth Circuit panel has the inherent 

power to “fashion an appropriate sanction for conduct which abuses the judicial 

process.” Chambers v. NASCO, Inc., 501 U.S. 32, 44–45 (1991). However, given 

THP’s stipulation, the Special Master does not find it necessary to specifically 

invoke the court’s inherent power to justify a sanctions award against THP. When 

a court relies on its inherent power to impose a monetary sanction against a party, it 

must make a specific finding of either “(1) a willful violation of a court order; or (2) 

bad faith.” Am. Unites for Kids v. Rosseau, 985 F.3d 1075, 1090 (9th Cir. 2021); 

see also Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. 101, 107 (2017) (noting 

that a court may order “a party that has acted in bad faith to reimburse legal 

fees and costs incurred by the other side” pursuant to its inherent power). In 

addition to a bad faith finding, a court ordering compensatory monetary relief must 

“apply a ‘but-for’ causation standard,” tracing the compensation back to the 

sanctionable conduct of the party or attorney. Am. Unites for Kids, 985 F.3d at 

1089–90. 

 Here, it is likely that a monetary award against THP would be justified under 

the court’s inherent power, specifically as a result of the misconduct of its de facto 

general counsel Donald Hagans at nearly every step of these proceedings. That said, 
REPORT AND RECOMMENDATION Page 64 of 102

THP’s stipulation combined with its candor to the Special Master starting with the 

appointment of new counsel for these proceedings makes reliance on the court’s 

inherent power—and the attendant bad faith finding such reliance would demand—

unnecessary. Cf. Chambers, 501 U.S. at 44 (“Because of their very potency, 

inherent powers must be exercised with restraint and discretion.”). 

Even with THP’s stipulation, there is considerable disagreement between the 

parties over the final sums that Petitioners are entitled to recover. On September 29, 

2023, the Special Master ordered Petitioners to file an updated fee application and 

provided THP with an opportunity to respond. Ninth Cir. Case No. 23-80039, ECF 

No. 89. The resulting submissions center on whether certain expenses should be 

included in a sanctions award and, more generally, the reasonableness of GTP’s 

expense calculations. The total amount that GTP seeks is $325,057.49. Ninth Cir. 

Case No. 23-80039, ECF No. 91, at 11.

a) Costs and Fees from the District Court Proceedings 

First, Petitioners seek reimbursement for $34,140.00 in fees stemming from 

the district court proceedings. This calculation is based on the time GTP spent 

responding to THP’s ex parte application for reconsideration and also on bringing a 

motion to enforce the district court’s initial fee award after “THP steadfastly refused 

to pay the judgment and failed to request a stay or post a bond to obtain a stay 

pending appeal.” Ninth Cir. Case No. 23-80039, ECF No. 91, at 2–6. THP argues 
REPORT AND RECOMMENDATION Page 65 of 102

that Petitioners are not entitled to recover any fees associated with the motion to 

enforce the judgment because that dispute centered on issues wholly distinct from 

the “narrow issue of whether THP or its lawyers made misrepresentations to any 

court regarding Dennis Omanoff’s cooperation with THP.” Ninth Cir. Case No. 

23-80039, ECF No. 92, at 3. Accordingly, THP submits that the $11,885 in fees 

associated with the motion to enforce should be excluded from the ultimate sanctions 

award. Id. at 4. 

The Special Master agrees with THP’s summation of that issue. The Ninth 

Circuit Appointment Order tasked the undersigned with investigating the scope of 

any misconduct “pertaining to the Omanoff affidavit” and recommending 

appropriate sanctions or disciplinary measures commensurate with his findings. 

Ninth Cir. Case No. 23-80039, ECF No. 1, at 4. Petitioners’ motion to enforce the 

district court attorneys’ fee judgment did not concern the newly discovered evidence 

argument or the Omanoff affidavit, and the Special Master thus does not weigh in 

on the propriety of THP’s actions or arguments made in opposition to that motion. 

See In re Yagman, 796 F.2d 1165, 1183 (9th Cir. 1986) (“[T]he amount of the 

sanctions and the manner in which they are imposed cannot be inconsistent 

with the purpose and directive of the authority on which the sanctions are 

based.”). Accordingly, the Special Master recommends the panel reduce the amount 
REPORT AND RECOMMENDATION Page 66 of 102

Petitioners seek ($34,140.00) in connection with the district court proceedings by 

$11,885.00, resulting in a recommended award of $22,255.00. 

b) Costs and Fees from the Ninth Circuit Proceedings 

Next, the parties disagree over whether Petitioners are entitled to recover the 

full amount of their fees and expenses stemming from the Ninth Circuit appeal. THP 

maintains that it should only have to compensate Petitioners for the fees and 

expenses they incurred in defending the “limited portion of the Ninth Circuit appeal” 

that centered on whether the information contained in the Omanoff affidavit was, in 

fact, newly discovered evidence under Rule 60(b)(2).14 Ninth Cir. Case No. 23-

80039, ECF No. 22. For their part, Petitioners argue that THP’s appeal to the Ninth 

Circuit was entirely frivolous, entitling them to full compensation for their expenses 

and fees. Ninth Cir. Case No. 23-80039, ECF No. 91, at 6–9. Petitioners rely on 

Fed. R. App. P. 38 to support this request, which authorizes a court of appeals to 

“award just damages and single or double costs to the appellee” if it “determines that 

an appeal is frivolous.” Ultimately, Petitioners request a reimbursement of 

$32,951.01. Id. at 11. 

14 THP presented two primary issues on appeal to the Ninth Circuit, one centered on 

the Omanoff affidavit as newly discovered evidence and the other challenging the 

district court’s initial calculation of the fee award based on the Volkov firm’s billing 

practices and time entries. See Evid. Hr’g Ex. 211. 
REPORT AND RECOMMENDATION Page 67 of 102

 Courts of appeal have discretion under Fed. R. App. P. 38 to order a petitioner 

to pay the opposing party’s costs and attorneys’ fees when the petitioner brings a 

frivolous appeal. “An appeal is frivolous ‘when the result is obvious or the 

appellant’s arguments are wholly without merit.’” Blixseth v. Yellowstone 

Mountain Club, LLC, 796 F.3d 1004, 1007 (9th Cir. 2015) (quoting Glanzman v. 

Uniroyal, Inc., 892 F.2d 58, 61 (9th Cir. 1989)). But one frivolous argument, 

among others, cannot alone justify a fee award under Rule 38. See Harris v. Polskie 

Linie Lotnicze, 820 F.2d 1000, 1005 (9th Cir. 1987); Guam Soc’y of Obstetricians 

& Gynecologists v. Ada, 100 F.3d 691, 704 (9th Cir. 1996). 

THP’s appeal to the Ninth Circuit was not wholly without merit, and the scope 

of the Special Master proceedings has been confined to the newly discovered 

evidence argument which made up approximately one half of THP’s appeal. The 

panel’s Appointment Order that vested the undersigned with the authority to conduct 

these proceedings specifically concerned the “serious questions about whether the 

repeated representations [THP] has made in this case that Omanoff’s information 

constituted ‘newly discovered evidence that, with reasonable diligence, could not 

have been discovered in time,’ were frivolous and/or made in bad faith.” Ninth Cir. 

Case No. 23-80039, ECF No. 1, at 3. While an abuse of discretion standard of 

review governed THP’s appeal of the district court’s initial fee award (as 

differentiated from THP’s appeal of the district court’s order on the application for 
REPORT AND RECOMMENDATION Page 68 of 102

reconsideration), that alone does not render the argument frivolous or wholly without 

merit. 

Given the limited scope of the Special Master proceedings and the lack of 

substantive evidence that demonstrates THP’s appeal was wholly frivolous, an 

award under Fed. R. App. P. 38 for the full amount of costs and fees GTP incurred 

in connection with the Ninth Circuit appeal would be inappropriate on these facts. 

Accordingly, the Special Master recommends that the panel reduce the amount 

Petitioners seek ($32,951.01) for their work on the Ninth Circuit appeal by 50%, 

resulting in a recommended award of $16,475.50.15

c) Costs and Fees Resulting from Petitioners’ Motion for 

 Sanctions and the Special Master Proceedings 

Petitioners next seek reimbursement for $245,585.00 in attorneys’ fees (and 

an additional $12,381.48 in costs) stemming from their work on both the Motion for 

Sanctions filed before the Ninth Circuit panel and the resulting Special Master 

15 In response to the Special Master’s order for GTP to provide an updated fee 

application, the parties submitted a joint stipulation agreeing that “50-percent is a 

fair and reasonable allocation of Petitioners’ costs and fees incurred during the Ninth 

Circuit appeal to account for their work addressing THP’s so-called ‘new evidence’ 

argument.” Ninth Cir. Case No. 23-80039, ECF No. 90, at 2. THP does not seek 

any further reduction of Petitioners fees and expenses from the Ninth Circuit appeal 

on reasonableness grounds and agrees to pay “$16,475.50 . . . for the 50% portion 

of the appeal focused on the application for reconsideration.” Ninth Cir. Case No. 

23-80039, ECF No. 92, at 17. 
REPORT AND RECOMMENDATION Page 69 of 102

proceedings.16 Ninth Cir. Case No. 23-80039, ECF No. 91, at 11. THP first 

challenges Petitioners’ inclusion of 74.9 attorney hours, or $25,477.00, billed to 

work on their August 23, 2023, motion to unseal all documents that THP filed under 

seal. The Special Master denied Petitioners’ motion on August 29, 2023, principally 

noting that Petitioners brought it after the taking of evidence in the Special Master 

proceeding had closed and finding unconvincing Petitioners’ untimely arguments 

for why a wholesale document production or detailed privilege log was necessary. 

Ninth Cir. Case No. 23-80039, ECF No. 85. 

To be sure, the fees Petitioners have incurred throughout these Special Master 

proceedings are substantial. And, unfortunately, they could have all been avoided 

had it not been for THP’s repeated misrepresentations at every step of the litigation. 

But THP’s misconduct did not give Petitioners carte blanche to run up their own 

fees, especially once they were under the impression that all of their work would be 

paid for following THP’s July 19, 2023, stipulation. Courts have the “necessary 

discretion to adjust [attorneys’ fees] awarded to address excessive and unnecessary 

effort expended in a manner not justified by the case.” Ballen v. City of Redmond, 

466 F.3d 736, 746 (9th Cir. 2006). Here, for the reasons outlined in the Special 

16 Petitioners note in their updated fee application that their request for $245,585.00 

includes all fees incurred up to and including September 30, 2023. Ninth Cir. Case 

No. 23-80039, ECF No. 91, at 9–10. They have further indicated that they are 

continuing to record fees incurred after that date and will “submit those to the Ninth 

Circuit at the appropriate time.” Id. at 10.
REPORT AND RECOMMENDATION Page 70 of 102

Master’s order denying Petitioners’ motion to unseal, Ninth Cir. Case No. 23-

80039, ECF No. 85, the Special Master concludes that those expenses were 

unnecessarily incurred. The Special Master therefore recommends the panel reduce 

the amount Petitioners seek ($245,585.00) in connection with their motion for 

sanctions and the Special Master proceedings by $25,477.00, for a recommended 

award of $220,108.00 plus an additional $12,381.48 in expenses, subtotaling 

$232,489.48. 

Taking into account the above reductions, the Special Master is left with the 

following amounts in connection with Petitioners’ updated fee application: (1) 

$22,255.00 for Petitioners’ work opposing THP’s ex parte application in the district 

court; (2) $16,475.50 for Petitioners’ work on the limited portion of the Ninth Circuit 

appeal focused on the newly discovered evidence argument; (3) $220,108.00 for 

Petitioners’ work on their motion for sanctions and the resulting Special Master 

proceedings; and (4) $12,381.48 in expenses from the Special Master proceedings. 

This results in a recommendation to the Ninth Circuit panel that it grant an award of 

$271,219.98, prior to any further reductions discussed below.

d) Reasonableness of the Various Calculations 

THP requests further reductions on the amounts listed as (1) and (3) above. 

Specifically, THP argues that the attorneys’ fees Petitioners claimed to have incurred 

in connection with their work on the ex parte application for reconsideration and, 
REPORT AND RECOMMENDATION Page 71 of 102

later, on the motion for sanctions and Special Master proceedings are both inflated 

and impossible to parse because of what it calls Petitioners’ “block billing” practices. 

Accordingly, they seek a 40% reduction on those amounts. Ninth Cir. Case No. 

23-80039, ECF No. 92, at 16. 

In calculating fee awards, judges are instructed to scrutinize the 

“reasonableness of (a) the number of hours expended and (b) the hourly fee 

claimed.” Long v. I.R.S., 932 F.2d 1309, 1314 (9th Cir. 1991). THP challenges 

the hours expended but not the hourly rates of the Volkov firm’s attorneys. Having 

considered the parties’ submissions in response to the Special Master’s order for 

Petitioners to submit an updated fee application, the Special Master concludes that 

the total number of hours Petitioner expended on its work in the district court and, 

later, before the Special Master are somewhat inflated and justify a modest 

adjustment. Cf. Yagman, 796 at 1184–85 (observing that sanctions awards based 

on attorneys’ fees need not “rigidly apply the factors” that apply to loadstar fee 

calculations, provided that the court makes an “evaluation of the fee 

breakdown submitted by counsel” to assess the reasonableness of that 

breakdown). 

THP has submitted comparisons between the attorney hours it spent on 

various stages of this litigation and the attorney hours Petitioners claim to have spent 

on the same. For example, THP notes that it spent approximately 17% less time on 
REPORT AND RECOMMENDATION Page 72 of 102

the Special Master proceedings than Petitioners. See Ninth Cir. Case No. 23-

80039, ECF No. 92, at 14. Moreover, THP notes that Petitioners seek 

reimbursement for significant amounts of attorney time in connection with both their 

opening brief and preparation for closing argument, which had fifteen-page and 

twenty-minute argument caps, respectively. Id. With respect to Petitioners August 

23, 2023, motion to unseal, THP trenchantly notes that Volkov attorneys billed 74.9 

hours to that “uncomplicated 16-page motion” compared to their own attorneys 

billing a mere 16.7 hours in their successful opposition to the same.17 Id. at 11. 

Finally, the Special Master recognizes that any incentive Petitioners may have had 

to mitigate their fees in connection with the Special Master proceedings was 

significantly lessened following THP’s stipulation on July 19, 2023. 

Based on these, and other considerations, the Special Master recommends that 

the panel reduce Petitioners’ fees for their work on the ex parte application, motion 

for sanctions, and Special Master proceedings by 10%, a “haircut.” See Moreno v. 

City of Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008) (“[C]ourt[s] can impose 

a small reduction, no greater than 10 percent—a ‘haircut’—based on [their] 

exercise of discretion and without a more specific explanation.”). This figure 

17 Although the Special Master has already recommended, supra, excluding the time 

billed to this motion from the amount Petitioners seek in connection with their 

motion for sanctions and the Special Master proceedings, it nonetheless serves as a 

useful example of excessive billing practices present in this case. 
REPORT AND RECOMMENDATION Page 73 of 102

accounts for the concerns raised in THP’s response to Petitioners’ fee application 

without unduly prejudicing Petitioners in their pursuit for reimbursement of fees that 

they never would have incurred in the first place but for THP’s misconduct. 

 In summary, the Special Master recommends the panel impose a grand total 

sanction award of $246,983.68 against THP, comprised of the following individual 

amounts: (1) $20,029.50 for Petitioners’ work opposing THP’s ex parte application 

in the district court (incorporating a 10% reduction); (2) $16,475.50 for Petitioners’ 

work on the limited portion of the Ninth Circuit appeal focused on the newly 

discovered evidence argument; (3) $198,097.20 for Petitioners’ work on their 

motion for sanctions and the resulting Special Master proceedings (incorporating a 

10% reduction); and (4) $12,381.48 in expenses from the Special Master 

proceedings. 

This total recommended monetary award is set forth in table form here for the 

convenience of the panel. 

Separate Bases of Recovery Amount 

Fees associated with THP’s ex parte 

application for reconsideration 

$20,029.50 

50% of the fees from the Ninth Circuit 

appeal 

$16,475.50 
REPORT AND RECOMMENDATION Page 74 of 102

Fees from Petitioners’ motion for 

sanctions and the Special Master 

proceedings 

$198,097.20 

Expenses from the Special Master 

proceedings 

$12,381.48 

Total: $246,983.68 

2. Individual Attorney Sanctions for the Unreasonable and 

 Vexatious Multiplication of Proceedings 

28 U.S.C § 192718 vests United States courts with the power to hold attorneys 

personally liable for fees and costs incurred by the other side as a result of their 

misconduct. The statute authorizes the imposition of sanctions against “any lawyer 

who wrongfully proliferates litigation proceedings once a case has commenced.” 

Pac. Harbor Cap., Inc. v. Carnival Air Lines, Inc., 210 F.3d 1112, 1117 (9th Cir. 

2000). Courts wishing to impose sanctions under § 1927 must make a finding that 

18 28 U.S.C. § 1927 provides: 

Any attorney or other person admitted to conduct cases in any court of 

the United States or any Territory thereof who so multiplies the 

proceedings in any case unreasonably and vexatiously may be required 

by the court to satisfy personally the excess costs, expenses, and 

attorneys' fees reasonably incurred because of such conduct. 
REPORT AND RECOMMENDATION Page 75 of 102

the attorney to be sanctioned acted with “subjective bad faith.” New Alaska Dev. 

Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th Cir. 1989). 

Section 1927 is the chief statutory tool by which a court can hold individual 

attorneys liable for misconduct. It does not apply to law firms, clients, corporations, 

or other entities. See Kaass Law v. Wells Fargo Bank, N.A., 799 F.3d 1290, 1293 

(9th Cir. 2015). However, § 1927’s language is also broad in that it can reach “any

attorney or other person admitted to conduct cases in any court of the United States” 

provided they personally “multiply the proceedings in any case unreasonably and 

vexatiously.” (emphasis added). The plain language of the statute thus supports 

the conclusion that the attorneys of record for a specific client do not represent the 

entire universe of individuals who may be sanctioned pursuant to § 1927. This 

nuance is important in these proceedings given the number of different attorneys 

who formally represented or otherwise counseled THP through the various stages of 

this litigation and those attorneys’ various bar admissions. 

To find that the Ninth Circuit panel in this case could only sanction the 

attorneys who are licensed to practice before the Ninth Circuit and who did in fact 

represent THP before the court would be irreconcilable with the logic of § 1927. 

The statute targets conduct that “multiplies the proceedings in any case,” which 

fairly encompasses conduct that results in a petition for review with a court of 

appeals or, indeed, the appointment of a Special Master to conduct additional fact-
REPORT AND RECOMMENDATION Page 76 of 102

finding. 28 U.S.C. § 1927. When an attorney raises a frivolous argument with the 

district court, and that issue is later appealed and re-argued to the Ninth Circuit by a 

different attorney, the original attorney can still be sanctioned under § 1927 for their 

role in multiplying the proceedings. See, e.g., Boyer v. BNSF Ry. Co., 832 F.3d 

699, 701 (7th Cir. 2016) (noting that a § 1927 sanction is likely still appropriate 

when it relates to conduct that happened to occur before a different court 

because those earlier proceedings were procedurally connected to the “instant 

litigation” before the sanctioning court); Raymark Indus. v. Baron, 1997 WL 

359333, at *7 n.10 (E.D. Pa. June 23, 1997) (“The purpose of § 1927 is frustrated 

by the imposition of sanctions in two distinct cases, not in two different courts.” 

(emphasis added)). Likewise, a party’s attorney who reviews and approves 

motions, applications, and briefs filed in a case is responsible for the resulting 

multiplication of proceedings even when he does not sign his name to those filings 

or personally argue them before the court. 

Accordingly, the Special Master concludes that all of the attorneys involved 

in the instant litigation may be eligible for imposition of sanctions under § 1927. 

The remaining Real Parties in Interest who meet this criterion are Donald Hagans, 

Gregory A. Vega, Ricardo Arias, and Marina A. Torres.19 Megan Overmann Goetz 

19 Each of these individuals is an “attorney. . . admitted to conduct cases in any court 

of the United States.” 28 U.S.C. § 1927. Donald Hagans testified that he is admitted 
REPORT AND RECOMMENDATION Page 77 of 102

does not meet this criterion. She has focused exclusively on the Wyoming Antitrust 

Litigation and was not involved in the litigation before the San Diego district court 

or the Ninth Circuit. The full scope of her involvement in these proceedings relates 

to her filing one declaration before the Special Master, discussed supra, and 

participating in the in-person evidentiary hearing. For the reasons set forth below, 

the Special Master concludes that § 1927 sanctions are appropriate only as to 

attorneys Hagans, Vega, and Arias. 

But for Vega and Arias’s motion for reconsideration, which spawned the 

utterly meritless newly discovered evidence argument that was made in at least five 

different stages of this litigation, we would not be here today. “While, ‘[o]ur cases 

have been less than a model of clarity regarding whether a finding of mere 

recklessness alone may suffice to impose sanction[s] for attorneys’ fees’ under 

§ 1927,” it is plainly clear that “a finding that the attorneys recklessly raised a 

frivolous argument which resulted in the multiplication of the proceedings” justifies 

§ 1927 sanctions. In re Girardi, 611 F.3d 1027, 1061 (9th Cir. 2010) (alteration 

in the State of Texas and U.S. District Court for the Western District of Texas. Evid. 

Hr’g Tr. vol. 3, 758 (Testimony of Donald Hagans). Gregory A. Vega testified 

that he is admitted to practice in the State of California, the Ninth Circuit, and various 

other state and federal courts. Evid. Hr’g Tr. vol. 2, 411–12 (Testimony of 

Gregory Vega). Ricardo Arias testified that he is admitted to practice in the State 

of California and in three of the U.S. District Courts in California. Evid. Hr’g Tr. 

vol. 2, 540 (Testimony of Ricardo Arias). Finally, Marina A. Torres testified that 

she is admitted to practice in the State of California, the Ninth Circuit, and several 

other federal courts. Evid. Hr’g Tr. vol. 3, 630 (Testimony of Marina Torres). 
REPORT AND RECOMMENDATION Page 78 of 102

and emphasis in original) (quoting B.K.B. v. Maui Police Dep’t, 246 F.3d 1091, 

1107 (9th Cir. 2002)); see also In re Keegan Mgmt. Co., Secs. Litig., 78 F.3d 431, 

436 (9th Cir. 1996) (“Bad faith is present when an attorney knowingly or 

recklessly raises a frivolous argument.” (internal citations and quotation marks 

omitted)). Gregory A. Vega and Ricardo Arias easily satisfy this recklessness bad 

faith standard with respect to the frivolous Fed. R. Civ. P. 60(b)(2) argument that 

they submitted to the San Diego district court as part of their application for 

reconsideration. 

We have characterized frivolous arguments for the purposes of § 1927 

sanctions as ones that are “baseless and made without reasonable and competent 

inquiry” or made up of “legal or factual contentions so weak as to constitute 

objective evidence of improper purpose.” Girardi, 611 F.3d at 1062 (internal 

citations and quotation marks omitted). That is to say that when an argument is 

patently lacking in any basis in either law or fact, it can be fairly characterized as 

“frivolous” for the purpose of a § 1927 sanction award. 

The argument that Ricardo Arias first concocted based on a cursory reading 

of Fed. R. Civ. P. 60(b)(2) is a poster child for the definition of a frivolous argument. 

Arias knew that Omanoff began cooperating with TPW in May 2021. He received 

multiple draft Omanoff affidavits in May, some as long as twelve pages in length, 

and his supervising partner Gregory A. Vega testified during the Special Master 
REPORT AND RECOMMENDATION Page 79 of 102

proceedings that the May and June Omanoff affidavits were “substantially similar” 

to the one they received from Hagans in October. Evid. Hr’g Tr. vol. 2, 444 

(Testimony of Gregory Vega). 

Had Arias read just one or two cases interpreting the meaning of “newly 

discovered evidence” or “reasonable diligence,” he would have known that his Fed. 

R. Civ. P. 60(b)(2) argument was frivolous. But he did not conduct any further 

research into the meaning of the rule. He merely searched “motion for 

reconsideration,” stumbled upon Rule 60(b)(2), and added it as a primary argument 

in his draft application for reconsideration. See Evid. Hr’g Tr. vol. 2, 556–60, 569, 

613 (Testimony of Ricardo Arias). Compounding Arias’s culpability is the fact 

that he copied and pasted the language from the shelved May 2021 draft application 

for reconsideration into the November application that was eventually filed with the 

San Diego district court and conveniently changed the date on which Omanoff 

“came forward” from May 24, 2021, to October 29, 2021. Evid. Hr’g Tr. vol. 3, 

600–01 (Testimony of Ricardo Arias). Arias’s failure to conduct any inquiry into 

the applicability of Fed. R. Civ. P. 60(b)(2), combined with his unilateral decision 

to recycle old information and make it new, constitutes ample evidence of both 

recklessness and frivolousness as a matter of law. 

Like Arias, Vega was fully aware of the scope of Omanoff’s cooperation with 

Hagans and TPW starting in May 2021. When Arias sent him the draft ex parte 
REPORT AND RECOMMENDATION Page 80 of 102

application for reconsideration, riddled with misstatements of law and fact, he did 

nothing to correct the errors. He testified on the stand that he simply accepted the 

argument that Arias set forth in the application, that Fed. R. Civ. P. 60(b)(2) applied 

because the Omanoff information would be “new to Judge Whelan.” Evid. Hr’g 

Tr. vol. 2, 451, 507 (Testimony of Gregory Vega). As the supervising partner on 

the THP matter, Vega cannot escape liability or accountability on account of Arias’s 

exceptionally poor performance in researching and preparing the application for 

reconsideration. To Vega’s credit, he does not attempt to do so. Indeed, he testified 

before the Special Master that he accepted full responsibility for the 

misrepresentations made in the application for reconsideration. Id. at 452–53, 455. 

The Special Master accepts and appreciates the concession. 

In the end, Vega signed his name to the ex parte application for relief, and 

eventually, to the Notice of Appeal to the Ninth Circuit. His failure to check Arias’s 

work and independently verify the facts and law included in the application for 

reconsideration rise to the level of recklessness. Even without further research into 

Fed. R. Civ. P. 60(b)(2), Vega, as the responsible partner, should have seen and 

corrected the clear misstatement in the application for reconsideration that “[o]n 

October 29, 2021, after this Court issued its Order, Dennis Omanoff . . . came 

forward alleging unethical and illegal conduct by Volkov.” Evid. Hr’g Ex. 301 
REPORT AND RECOMMENDATION Page 81 of 102

(emphasis added). Vega’s recklessness in filing frivolous arguments before the San 

Diego district court led to the multiplication of these proceedings. 

Arias’s and Vega’s conduct in preparing and filing the ex parte application 

for reconsideration with the San Diego district court was, at a minimum, reckless 

and, as discussed, their newly discovered evidence argument was wholly frivolous. 

Moreover, the Special Master has recounted above that Vega and Arias failed to 

correct any of the misstatements of law or fact that they caused to be filed with the 

San Diego district court and the Special Master. These repeated failures were a 

substantial and motivating factor in the resulting appeal, petition for panel rehearing, 

motion for sanctions, and Special Master proceedings. These failures constitute bad 

faith and justify the imposition of a substantial sanction award under § 1927. 

Despite Vega’s and Arias’s role in spawning the newly discovered evidence 

argument, outside general counsel Donald Hagans lies at the center of the “complex 

web of misrepresentations made to various courts.” Ninth Cir. Case No. 23-80039, 

ECF No. 31. He bears significant responsibility for allowing the frivolous argument 

to be made in the first instance and then repeated to multiple federal judges 

throughout these proceedings. He too should be sanctioned under § 1927. 

First, Hagans’s conduct is sanctionable under § 1927 because he rubberstamped the newly discovered evidence argument in the first place. See Evid. Hr’g 

Ex. 316. Second, where Judge Whelan correctly surmised that THP knew most, if 
REPORT AND RECOMMENDATION Page 82 of 102

not all, of the Omanoff information well before October 29, 2021, based on filings 

in the Wyoming Antitrust Litigation, Hagans knew THP had all of the Omanoff 

information for a fact based on his personal role in soliciting and documenting that 

information beginning in May 2021. Despite this knowledge, Hagans pressed 

forward with an appeal to the Ninth Circuit, including the newly discovered evidence 

argument, and failed to inform Marina A. Torres of the full scope of his interactions 

with Omanoff, even when she was tasked with responding to Petitioners’ motion for 

sanctions. 

Even if Hagans’s testimony is true that he only became aware of the fact that 

the Rule 60(b)(2) argument was false and misleading during the course of the Special 

Master proceedings, see Evid. Hr'g Tr. vol. 3, 785–87 (Testimony of Donald 

Hagans), it does not diminish his culpability. Nor do Hagans’s repeated assertions 

that he “bought the Kool-Aid” with respect to the Rule 60(b)(2) argument, see id. at 

816, or that his actions were somehow justified because THP and GTP were engaged 

in a “war” with one another, see Evid. Hr’g Tr. vol. 4, 987 (Testimony of Donald 

Hagans). As Hagans himself acknowledged, as an attorney for THP, it was his 

responsibility to ensure the veracity of the arguments he was approving on the 

company’s behalf. Evid. Hr’g Tr. vol. 3, 787 (Testimony of Donald Hagans). He 

recklessly failed to fulfill that professional obligation time and again. Each time he 

did so led to new appeals, new motions, new evidentiary submissions resulting in 
REPORT AND RECOMMENDATION Page 83 of 102

the need for an extended evidentiary hearing, which multiplied the proceedings and 

caused Petitioners to incur still more fees in their attempt to defend against frivolous 

arguments. His actions in this litigation warrant a substantial sanction award under 

28 U.S.C. § 1927. 

Finally, the Special Master has concluded that although Marina A. Torres 

personally submitted frivolous arguments to the Ninth Circuit and Special Master, 

she did not act with the requisite bad faith—i.e., recklessness—necessary to justify 

monetary sanctions under § 1927. 

Unlike Vega, Arias, and Hagans, Torres had no personal knowledge of the 

communications between Hagans and Omanoff in May and June of 2021. At no 

point while she was preparing the opening brief for the Ninth Circuit appeal did 

Hagans or anyone else alert her to the fact that THP had access to the information 

contained in the October Omanoff affidavit any earlier than was represented to the 

district court. Finally, Torres stands alone in exercising reasonable diligence and 

competence in attempting to ensure the veracity of the claims she was making in her 

opposition to GTP’s motion for sanctions. See Evid. Hr’g Exs. 623, 624, 626, 627, 

628. Despite these efforts, Hagans, Vega, and Arias, all confirmed that everything 

represented in the ex parte application for reconsideration was correct, particularly 

concerning the timing of when they received the Omanoff information. Id. 
REPORT AND RECOMMENDATION Page 84 of 102

Petitioners argue that Torres still acted in bad faith because she had access to 

the district court order denying THP’s application for reconsideration, the public 

docket in the Wyoming Antitrust Litigation, and the substantive arguments in their 

own briefs. True enough. While this information likely should have caused Torres 

to probe deeper into the factual basis for the newly discovered evidence argument, 

particularly in the early days of the appeal, the Special Master concludes that she did 

not act recklessly in raising the argument on appeal. 

At worst, Torres acted negligently. In Blixseth, the court addressed the 

conduct of several attorneys who were “involved to varying degrees” in pressing 

their client’s frivolous appeal. Blixseth v. Yellowstone Mountain Club, LLC, 796 

F.3d at 1008. In response to an order to show cause, the attorneys argued there was 

some support for their theory on appeal, that they acted in good faith, and that they 

each had limited roles in the appeal. Id. The court specifically noted that each of 

the attorneys still “allowed their names to be placed on briefs that presented frivolous 

and inflammatory arguments,” but that their conduct did not rise to the level of bad 

faith, which led the court to not impose Fed. R. App. P. 38 sanctions on any of the 

individuals. Id. Like the attorneys in Blixseth, Torres allowed her name to be placed 

on briefs that presented frivolous arguments on appeal. But also like those attorneys, 

she acted in good faith, relying on the available information that she had both from 

her client and THP’s qui tam counsel. She thus did not act in bad faith, and the 
REPORT AND RECOMMENDATION Page 85 of 102

Special Master concludes, at least with respect to monetary sanctions, that the 

observations in this Report and Recommendation “will serve as a sufficient warning 

to [her] to act more responsibly in the future.” Id. 

In summary, the Special Master concludes that Real Parties in Interest Donald 

Hagans, Gregory A. Vega, and Ricardo Arias acted with subjective bad faith by 

recklessly raising frivolous arguments before various federal courts, leading to the 

unreasonable and vexatious multiplication of these proceedings thereby justifying 

individual monetary sanctions under 28 U.S.C. § 1927.20 Specifically, the Special 

Master recommends holding Donald Hagans jointly and severally liable with THP 

for 50% of the ultimate sanction award the panel decides upon, Gregory A. Vega 

jointly and severally liable with THP for 20% of the ultimate sanction award the 

panel decides upon, and Ricardo Arias jointly and severally liable with THP for 10% 

of the ultimate sanction award the panel decides upon. If the panel adopts the Special 

Master’s recommendations above with respect to THP’s liability pursuant to its 

20 The Special Master also concludes that Hagans, Vega, and Arias were all afforded 

ample procedural due process protections, including reasonable notice and an 

opportunity to be heard. See Pac. Harbor Cap., Inc. v. Carnival Air Lines, Inc., 

210 F.3d at 1118. An evidentiary hearing plainly satisfies the due process 

requirements for § 1927 sanctions, as does the opportunity to “brief the issue fully.” 

Id. All three attorneys were ordered to show cause why they should not face 

individual sanctions, had the opportunity to respond in writing to that show-cause 

order, and participated in a three-and-one-half-day evidentiary hearing before the 

Special Master in Coeur d’Alene, Idaho. 
REPORT AND RECOMMENDATION Page 86 of 102

stipulation, this would result in total individual liability not to exceed $123,491.84 

for Hagans, $49,396.74 for Vega, and $24,698.37 for Arias. 

B. Individual Attorney Discipline 

Petitioners did not request that the Ninth Circuit panel impose disciplinary 

sanctions on any of THP’s individual attorneys as part of their motion for sanctions. 

However, the panel specifically contemplated that individual discipline may be 

appropriate based on the information available to it at the time of its March 30, 2023, 

appointment order authorizing the undersigned to conduct these proceedings. See 

Ninth Cir. Case No. 23-80039, ECF No. 1, at 3–4 (quoting 9th Cir. G.O. 12.9(a); 

then citing Fed. R. App. P. 46(b); and 9th Cir. R. 46-2) (“[W]e may sanction 

‘counsel or a party for conduct that violates the Federal Rules of Appellate 

Procedure, the Circuit Rules, orders or other instructions of the Court, the 

rules of professional conduct or responsibility in effect where counsel maintains 

his or her principal office or as authorized by statute.’”). 

When the Special Master finally became aware of the full scope of Omanoff’s 

cooperation as a result of THP’s July 19, 2023, filings, the Special Master gave 

adequate notice to the Real Parties in Interest that he was considering recommending 

individual discipline to the Ninth Circuit panel. See Ninth Cir. Case No. 23-80039, 

ECF 31, at 3 (“[Q]uestions remain as to whether the materially misleading 

arguments and representations were made knowingly, recklessly, or 
REPORT AND RECOMMENDATION Page 87 of 102

unwittingly. The Special Master therefore hereby ORDERS Respondent 

[THP] and counsel acting on its behalf TO SHOW CAUSE, if any they have, 

why sanctions should not be imposed.”). 

Again, the remaining five individual attorneys who are Real Parties in Interest 

to this matter are admitted to a wide assortment of state and federal bars. Only two—

Gregory A. Vega and Marina A. Torres—are admitted to practice before the Ninth 

Circuit. These diverse bar admissions have a significant impact on the panel’s 

options for individual attorney discipline in this case. 

1. Gregory A. Vega and Marina A. Torres

As the two attorneys licensed to practice in the Ninth Circuit, the panel has 

power to discipline both Vega and Torres under the Federal Rules of Appellate 

Procedure. Fed. R. App. P. 46(b) & (c), provides that a member of the Ninth Circuit 

bar may be subject to suspension, disbarment, or other discipline for “conduct 

unbecoming a member of the court’s bar.” The Supreme Court has noted that the 

“conduct unbecoming” standard “reflects the burdens inherent in the attorney’s dual 

obligations to clients and to the system of justice.” In re Snyder, 472 U.S. 634, 644 

(1985). Conduct unbecoming is defined as “conduct contrary to professional 

standards that shows an unfitness to discharge continuing obligations to clients or 

the courts, or conduct inimical to the administration of justice.” Id. at 645. The 

Ninth Circuit has found that a “lack of diligence that impairs the deliberations of the 
REPORT AND RECOMMENDATION Page 88 of 102

court is sufficient” to impose discipline under Fed. R. App. P. 46. Girardi, 611 F.3d 

at 1035 (citing Gadda v. Ashcroft, 377 F.3d 934, 947 (9th Cir. 2004)); see also 

DCD Programs Ltd. v. Leighton, 846 F.2d 526, 528 (9th Cir. 1988); In re Hanson, 

572 F.2d 192, 193 (9th Cir. 1977). 

Consistent with Supreme Court direction, the Ninth Circuit has found that 

attorneys demonstrate “conduct unbecoming of the court’s bar” when they violate 

applicable rules of professional conduct, including both the ABA model rules and 

the rules of professional conduct “adopted by the licensing authority of an attorney's 

home state.” Snyder, 472 U.S. at 645 n.6; see Girardi, 611 F.3d at 1035. Further, 

it is appropriate for a circuit court imposing discipline under Fed. R. App. P. 46 to 

consider the ABA’s Standards for Imposing Lawyer Sanctions. See Girardi, 611 

F.3d at 1035–36; United States v. Swanson, 943 F.2d 1070, 1076 (9th Cir. 1991); 

ABA Joint Comm. on Prof’l Standards, Standards for Imposing Lawyer 

Sanctions (1984, rev. 1992) (“ABA Standards”). 

Both Vega and Torres are licensed to practice in their home state of California 

and are thus bound by the California Rules of Professional Conduct. The California 

Rules prohibit attorneys from “knowingly mak[ing] a false statement of fact or law 

to a tribunal or fail[ing] to correct a false statement of material fact or law previously 

made to the tribunal.” Cal. R. Prof. Conduct 3.3(a)(1); see also Model R. Prof. 

Conduct 3.1 (“A lawyer shall not bring or defend a proceeding, or assert or 
REPORT AND RECOMMENDATION Page 89 of 102

controvert an issue therein, unless there is a basis in law and fact for doing so 

that is not frivolous, which includes a good faith argument for an extension, 

modification or reversal of existing law.”). 

As outlined in the above section related to § 1927 sanctions, Vega’s conduct 

in approving Arias’s draft of the ex parte application for reconsideration 

demonstrated recklessness that resulted in materially false statements of law and fact 

to be filed with the San Diego district court. Regardless of whether Vega acted with 

actual knowledge of the falsity of his claims, it is abundantly clear that he 

demonstrated an extreme lack of diligence in reviewing and approving Arias’s draft 

application for reconsideration. As the supervising partner on the matter, Vega had 

an affirmative professional obligation to ensure that the claims being made in the 

application for reconsideration were not frivolous, especially considering that Arias 

was only a third-year associate in 2021. 

Vega’s misconduct extends beyond his role in filing the application for 

reconsideration. First, the Special Master has concluded that he did nothing of 

substance to alert Hagans to the fact that the newly discovered evidence argument 

had no merit following Judge Whelan’s order denying the application for 

reconsideration. Indeed, Vega signed his name to the Notice of Appeal to the Ninth 

Circuit, where that frivolous argument was made for a second time to the panel 

assigned to the case. See Evid. Hr’g Ex. 634. Second, when Marina A. Torres 
REPORT AND RECOMMENDATION Page 90 of 102

asked for his firm’s assistance concerning the arguments Petitioners made in their 

motion for sanctions, he did nothing to alert her to the fact that he and Arias had in 

fact received several draft Omanoff affidavits in May 2021. Third, before the 

Special Master, THP filed an Opening Brief that falsely stated, “the May 2021 

affidavit was prepared solely in connection with the Wyoming Suit and was not 

provided to THP’s counsel in the qui tam case.” Evid. Hr’g Ex. 217, at 5–6. Vega 

supplied a declaration under the penalty of perjury in support of that Opening Brief 

in which he maintained that his firm had no role in preparing the October Omanoff 

affidavit and that Arias never made any misrepresentations to the district court. 

Evid. Hr’g Ex. 312, at ¶¶ 4, 6, 9. As evidenced by the discussion thus far, these 

statements were false. 

Vega’s explanations for his actions, particularly with respect to his conduct 

and misleading statements to the Special Master, are entirely unconvincing and do 

little, if anything, to mitigate his culpability. All of this adds up to a substantial 

deviation from the relevant codes of professional conduct to which Vega was bound. 

While Vega has had a long and honorable career, and has never before been subject 

to individual sanctions, in some ways this lengthy litigation experience serves as an 

aggravating factor. See Girardi, 611 F.3d at 1039 (citing ABA Standards § 9.22(i)). 

Simply put, Vega should have known better. His misconduct in part caused these 

proceedings to extend far longer than they should have, and the misleading Rule 
REPORT AND RECOMMENDATION Page 91 of 102

60(b)(2) issue to snowball from a “throw it at the wall and see what sticks” approach 

to a tangled web of deceit. See DCD Programs, 846 F.2d at 528 (finding discipline 

appropriate under Fed. R. App. P. 46 when an attorney’s misrepresentations to 

the court went to the “heart of the appeal”). 

Our decision in Girardi, to suspend two attorneys from practice before the 

circuit for six months following comprehensive special master proceedings is 

instructive. But unlike the suspended attorneys in Girardi, who were involved in 

the litigation from start to finish and personally responsible for their own frivolous 

argument having been filed on appeal and before numerous federal judges, Vega’s 

role in this litigation was more limited. See Girardi, 611 F.3d at 1039. Vega was 

not intimately connected to the appeal, did not draft or personally approve 

subsequent iterations of the newly discovered evidence argument, and was not 

involved in the actual drafting of THP’s Opening Brief before the Special Master. 

Furthermore, Vega was honest and contrite during the evidentiary hearing, not 

seeking to defend his misconduct but instead taking responsibility for it, especially 

as it concerns reviewing Arias’s work. While the Ninth Circuit determined that the 

appropriate sanction for the two attorneys in Girardi was a six-month suspension 

from practice before the Ninth Circuit, the Special Master concludes that a lesser 

sanction is appropriate for Vega, and formally recommends a public reprimand 

under the Court’s discretionary authority pursuant to Fed. R. App. P. 46(c). 
REPORT AND RECOMMENDATION Page 92 of 102

As for Marina A. Torres, the Special Master has found that she was a party of 

one in conducting some level of due diligence in response to Petitioners’ motion for 

sanctions. Again, Hagans, Vega, and Arias acted with reckless disregard for the 

truth in their communications with Torres surrounding THP’s response to that 

motion. However, Torres’s actions during the early stages of the appeal merit some 

discussion in the context of whether she should face any individual discipline. 

On the one hand, there were several red flags in the district court record that 

should have alerted Torres to the frivolousness of the newly discovered evidence 

argument. For one, she had access to Judge Whelan’s order denying THP’s ex parte 

application for reconsideration, which, knowing what the Special Master now 

knows, all but “laid bare the fundamental and fatal flaws” with THP’s newly 

discovered evidence argument. Girardi, 611 F.3d at 1036–37 (noting that a wellreasoned district court opinion should have given attorneys “pause in pursuing 

an appeal”). She also had access to the Wyoming Antitrust Litigation docket, on 

which Judge Whelan relied heavily in his order, but testified to the Special Master 

that she did not thoroughly review the pleadings in that matter. Evid. Hr’g Tr. vol. 

3, 714 (Testimony of Marina Torres). This information alone should have set off 

substantial alarm bells for Torres with respect to the newly discovered evidence 

argument. 
REPORT AND RECOMMENDATION Page 93 of 102

 On the other hand, Torres provided credible evidence that she contacted 

THP’s qui tam counsel and had substantial conversations with Donald Hagans 

before filing THP’s opening brief. While it is not clear what the precise contours of 

those conversations were, it is clear that Hagans, Vega, and Arias never informed 

Torres that they had direct knowledge of the Omanoff information that served as the 

basis for the newly discovered evidence argument as early as May 2021. Moreover, 

Torres provided her draft Opening Brief and Petition for Panel Rehearing to Hagans 

for review. On both occasions, he approved the filings without revisions, despite the 

fact that he knew all of the relevant facts that today demonstrate the utter 

frivolousness of THP’s newly discovered evidence argument. 

 While not directly applicable to Torres’s efforts, Fed. R. Civ. P. 11 provides 

helpful guidance on whether those efforts constituted a reasonable inquiry into the 

facts of THP’s case while preparing the appeal. For one, the advisory committee 

notes caution courts from “using the wisdom of hindsight” in making reasonable 

inquiry determinations and state that the determination depends on a number of 

factors, including whether an attorney “depended on forwarding counsel or another 

member of the bar” in preparing a pleading. Fed. R. Civ. P. 11 advisory 

committee’s note to 1983 amendment; see also Townsend v. Holman Consulting 

Corp., 929 F.2d 1358, 1364 (9th Cir. 1990); Miller v. Bittner, 985 F.2d 935, 939 

(8th Cir. 1993). Federal courts have also found that the reasonableness of an 
REPORT AND RECOMMENDATION Page 94 of 102

attorney’s inquiry also depends on “the extent of the attorney’s reliance upon his 

client for the factual support for the document.” Thomas v. Cap. Sec. Servs., Inc., 

836 F.2d 866, 875 (5th Cir. 1988); see, e.g., Davis v. Crush, 862 F.2d 84, 88 (6th 

Cir. 1988). 

Against this backdrop, the reasonableness of Torres’s inquiry fairly implicates 

her lack of first-hand knowledge and the extent to which she had to rely on her client 

and trial counsel to provide her with the facts necessary to prepare THP’s appeal. It 

is thus difficult for the Special Master to conclude that Torres demonstrated “conduct 

unbecoming of the court’s bar” when the only people who could have informed her 

about the full scope of Omanoff’s cooperation never did so when she asked. She 

indeed demonstrated some poor judgment, particularly in failing to consider Judge 

Whelan’s decision more carefully and forcefully tripling and quadrupling down on 

the newly discovered evidence argument in THP’s petition for panel rehearing and 

opposition to Petitioners’ motion for sanctions despite a number of red flags. 

However, the surrounding circumstances and relative culpability of other Real 

Parties in Interest—i.e., Hagans, Vega, and Arias—provides crucial context for her 

actions. 

Accordingly, the undersigned does not recommend the panel impose any 

individual disciplinary sanctions against Ms. Torres under Fed. R. App. P. 46 and 
REPORT AND RECOMMENDATION Page 95 of 102

believes the facts set forth in this Report & Recommendation will cause her to work 

up her appeals more carefully in the future. 

2. Donald Hagans, Ricardo Arias, and Megan Overmann Goetz 

The remaining Real Parties in Interest are Donald Hagans, Ricardo Arias, and 

Megan Overmann Goetz, none of whom are admitted to practice in the Ninth Circuit, 

thus placing them beyond the reach of Fed. R. App. P. 46. The Court does have 

broad inherent power to “fashion an appropriate sanction for conduct which abuses 

the judicial process.” Chambers, 501 U.S. at 44–45. The inherent power is potent, 

extending not only to conduct occurring before the court but also to “actions beyond 

the court’s confines, regardless of whether that conduct interfered with courtroom 

proceedings.” Am. Unites for Kids, 985 F.3d at 1088. However, the Supreme Court 

explained in Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. 101, 108 (2017), 

that when an inherent power sanction is punitive rather than compensatory, the court 

must “provide procedural guarantees applicable in criminal cases, such as a ‘beyond 

a reasonable doubt’ standard of proof.” 

We unequivocally recognized the need to distinguish between compensatory 

and punitive sanctions when leveraging our inherent power in Am. Unites for Kids,

985 F.3d at 1089. There, we observed that punitive sanctions are often those 

“intended to vindicate the court’s authority and the integrity of the judicial process.” 

Id. (quoting F.J. Hanshaw Enterprises, Inc. v. Emerald River Dev., Inc., 244 F.3d 
REPORT AND RECOMMENDATION Page 96 of 102

1128, 1138 (9th Cir. 2001)). Attorney discipline is one such sanction, and thus 

requires heightened criminal-level due process protections, including the 

appointment of an independent prosecutor. 

Given that these heightened levels of due process protections did not exist 

during the Special Master proceedings, the undersigned counsels the panel against 

relying on its inherent power to directly discipline any of the remaining Real Parties 

in Interest.21 Instead, the Special Master recommends referring this matter to the 

appropriate State Bars and federal district courts for their consideration of any 

possible disciplinary proceedings. 

The Findings of Fact included herein demonstrate Donald Hagans’s 

dereliction of duty and patent misconduct at virtually every step of this litigation, 

from approving frivolous filings, to withholding material information from THP 

appellate counsel, to repeated obfuscation during the Special Master proceedings. 

While various counsel for THP changed throughout the duration of the underlying 

litigation, Hagans’s role as the company’s de facto general counsel overseeing all 

corporate legal matters did not. Out of all the misconduct discovered in this case, 

Hagans’s behavior is, by far, the most offensive. Had he been admitted to practice 

21 Alternatively, if the panel disagrees, the panel could consider the appointment of 

a Special Prosecutor to conduct disciplinary proceedings for a more limited subset 

of the remaining Real Parties in Interest. Such proceedings would comport with the 

criminal-level due process protections required in these circumstances. The Special 

Master is not making that recommendation here. 
REPORT AND RECOMMENDATION Page 97 of 102

before the Ninth Circuit, the undersigned would have recommended a substantial 

period of suspension from practice before the court under Fed. R. App. P. 46(b), if 

not outright disbarment. 

 Accordingly, the Special Master recommends the panel certify a copy of this 

Report & Recommendation to the Texas State Bar for its consideration of any 

disciplinary proceedings focused on Hagans’s clear violations of the rules of 

professional conduct to which he is bound as an officer of the court. 

 As detailed in the Findings of Fact and in connection with the Special Master’s 

discussion of § 1927 sanctions, supra, Ricardo Arias’s conduct is deeply troubling. 

Especially as a relatively young attorney, Arias cannot afford to make a habit out of 

the egregious research practices he demonstrated in this case. Accordingly, the 

Special Master recommends the panel certify a copy of this Report & 

Recommendation to the California State Bar and to Judge Thomas Whelan in the 

Southern District of California for further disciplinary proceedings focused on his 

clear violations of the rules of professional conduct to which he is bound as an officer 

of the court. 

 Finally, Megan Overmann Goetz’s conduct in this matter was not a model of 

good lawyering. As detailed in the Findings of Fact above, her declaration in support 

of THP’s Opening Brief to the Special Master mischaracterized her involvement in 

the development of various Omanoff affidavits and demonstrated a lack of diligence 
REPORT AND RECOMMENDATION Page 98 of 102

in informing herself of the nature of the Special Master proceedings before 

submitting a misleading statement in the case under the penalty of perjury. However, 

the Special Master recognizes that Goetz did not personally draft that declaration 

and provided limited edits to it before THP’s Special Master counsel filed it with the 

court. Moreover, her declaration stands out as troubling in part due to the long list 

of other, similar misstatements in this case, over which she had no knowledge or 

control. 

Additionally, the Special Master commends Ms. Goetz for her role in 

producing a May 2021 Omanoff affidavit that finally caused THP to bring the full 

scope of Omanoff’s cooperation to the Special Master’s attention and for her honesty 

and contrition throughout these proceedings. The Special Master cautions Ms. 

Goetz to take more care in the future but does not recommend that the panel refer 

her to any of the bars to which she is admitted for further proceedings. That said, 

the Special Master recommends the panel certify a copy of this Report & 

Recommendation to United States District Judge Alan B. Johnson in the District of 

Wyoming to consider whether the statements made before him warrant any further 

investigation. 

IV. SUMMARY OF RECOMMENDATIONS 

 This case demonstrates that the line between “zealous advocacy” and 

misrepresentations to the court can become easily blurred in the eyes of many 
REPORT AND RECOMMENDATION Page 99 of 102

members of the bar. While the Special Master has not concluded that any of the 

actors involved in this litigation acted with malice or the specific intent to defraud 

the court, many of them nonetheless disregarded their professional obligations—set 

forth in Rule 11, statutory law, and various applicable codes of professional 

conduct—under the guise of litigation strategy and vigorous client defense to 

influence decision-making by federal judges. The court has an obligation to itself 

and, more importantly, to the public at large to protect against the kind of misconduct 

replete in this record. As a result, Respondent THP and some of its individual 

attorneys should face monetary sanctions and individual discipline for their 

misconduct. 

 First, the Special Master recommends to the panel that the following entities 

and individuals be required to reimburse Petitioners for the fees, costs, and expenses 

incurred as a result of their misconduct. 

1. Pursuant to its stipulation, Respondent THP should be held liable to 

Petitioners for $246,983.68 of their reasonable attorneys’ fees, costs, and 

expenses incurred in connection with: (i) THP’s ex parte application for 

reconsideration; (ii) the limited portion of the Ninth Circuit appeal addressing 

the application for reconsideration (as opposed to the appeal of the district 

court’s initial ruling); and (iii) Petitioners’ motion for sanctions, including 

fees incurred in connection with this Special Master proceeding. 
REPORT AND RECOMMENDATION Page 100 of 102

2. Pursuant to 28 U.S.C. § 1927, Attorney Donald Hagans should be held jointly 

and severally liable with Respondent THP for up to 50% of the above amount, 

not to exceed $123,491.84. 

3. Pursuant to 28 U.S.C. § 1927, Attorney Gregory A. Vega should be held 

jointly and severally liable with Respondent THP for up to 20% of the above 

amount, not to exceed $49,396.74. 

4. Pursuant to 28 U.S.C. § 1927, Attorney Ricardo Arias should be held jointly 

and severally liable with Respondent THP for up to 10% of the above amount, 

not to exceed $24,698.37. 

The total monetary award is set forth in table form here for the convenience 

of the panel. 

Party Amount 

GTP’s Total Recommended Recovery $246,983.68 

Amount Recoverable from Respondent 

Tungsten Heavy Powder, Inc. (THP) 

$246,983.68 

Amount Recoverable from Real Party in 

Interest Donald Hagans, jointly and 

severally 

$123,491.84 
REPORT AND RECOMMENDATION Page 101 of 102

Amount Recoverable from Real Party in 

Interest Gregory A. Vega, jointly and 

severally 

$49,396.74 

Amount Recoverable from Real Party 

in Interest Ricardo Arias, jointly and 

severally 

$24,698.37 

A monetary judgment in these amounts should be entered by the Clerk of 

Court if the panel adopts this Report and Recommendation. 

Second, the Special Master recommends that the panel issue a public 

reprimand to Attorney Gregory A. Vega pursuant to its power under Fed. R. App. P. 

46(c). 

Finally, the Special Master recommends to the panel that the following State 

and Federal Bars should receive from the Clerk of this Court a certified copy of this 

Report & Recommendation for consideration of any further discipline they deem 

appropriate. 

1. The State Bar of Texas, with respect to Donald Hagans’s conduct. 

2. The State Bar of California, with respect to Gregory A. Vega and Ricardo 

Arias’s conduct. 
REPORT AND RECOMMENDATION Page 102 of 102

3. The U.S. District Court for the Southern District of California, with respect to 

Gregory A. Vega and Ricardo Arias’s conduct. 

4. The U.S. District Court for the District of Wyoming, with respect to Megan 

Overmann Goetz’s conduct.

Respectfully submitted, October 31, 2023