Gorovenko v. Activate Clean Energy LLC

                           NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       OCT 14 2025
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

IGOR GOROVENKO,                                 No. 24-5840
                                                D.C. No.
             Plaintiff - Appellee,              8:24-cv-00058-JLS-ADS
 v.
                                                MEMORANDUM*
ACTIVATE CLEAN ENERGY LLC;
RASA ENERGY, INC.; DAVID MARTIN;
WILLIAM WISMANN; DAVE LOPEZ;
THOMAS WILLIAMS; BRUCE R.
WRIGHT; MIKE WISMANN; ALEX
EAST,

             Defendants - Appellants,

and

DOE, 1-20,

             Defendant.

                   Appeal from the United States District Court
                       for the Central District of California
                   Josephine L. Staton, District Judge, Presiding

                            Submitted October 8, 2025**

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
                                Pasadena, California

Before: WARDLAW, GOULD, and KOH, Circuit Judges.

      Activate Clean Energy, LLC (“ACE”), Rasa Energy, Inc., David Martin,

William Wismann, Dave Lopez, Thomas Williams, Bruce R. Wright, Mike

Wismann, and Alex East1 appeal the district court’s denial of their motion for

attorney’s fees under the Defend Trade Secrets Act (“DTSA”), 

18 U.S.C. § 1836

(b)(3)(D).

      “We review a district court’s award [or denial] of attorney’s fees for an

abuse of discretion.” Roberts v. City of Honolulu, 

938 F.3d 1020, 1023

 (9th Cir.

2019). “[W]hether the district court applied the correct legal standard is reviewed

de novo.” 

Id.

 (quoting Oregon Nat. Desert Ass’n v. Locke, 

572 F.3d 610, 613-14

(9th Cir. 2009)) (alterations in original). “[F]actual findings are reviewed for clear

error.” Avery v. First Resolution Mgmt. Corp., 

568 F.3d 1018, 1021

 (9th Cir.

2009). We have jurisdiction under 

28 U.S.C. § 1291

, and we affirm.

      Igor Gorovenko brought suit pro se against ACE for misappropriation of

trade secrets in violation of the DTSA, violations of the Racketeer Influenced and

Corrupt Organizations Act (“RICO”), and various state law claims. The district

dismissed Gorovenko’s initial complaint sua sponte for lack of subject-matter



1
 We refer to Defendant-Appellants collectively as ACE, the lead appellant in this
case.

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jurisdiction. Gorovenko timely amended the complaint. Gorovenko’s claims arise

out of a contract with ACE (the “Equipment Manufacturing Agreement” or

“Agreement”) in which Gorovenko agreed to assemble a prototype for ACE. After

Gorovenko completed assembly of the prototype, he demanded additional payment

and refused to turn over the prototype unless he was paid. Gorovenko eventually

turned over the prototype, but sued ACE for misappropriation of trade secrets.

      Both parties engaged in contentious litigation tactics before the district court,

and the relationship between the parties “soured quickly.” Gorovenko refused to

agree to a confidentiality stipulation proposed by ACE, requiring the district court

to order the parties to file documents under seal. Throughout the litigation,

Gorovenko sent a series of inappropriate and aggressive messages to ACE and, in

some cases, their family members. ACE sought sanctions against Gorovenko, but

the district court denied the motion. See Dkt. 118 (Order Denying Sanctions),

Gorovenko v. Activate Clean Energy, No. 8:24-cv-00058-JLS-ADS (June 25,

2024) at 1.

      The district court ultimately dismissed Gorovenko’s First Amended

Complaint, holding that “Gorovenko’s theory of how Defendants misappropriated

his trade secrets is clearly contradicted by the terms of the [Agreement] he signed.”

The court noted that the Agreement was “complete on its face and it contains an

integration clause,” and that contrary to Gorovenko’s claims, “[n]owhere in the



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Agreement is Gorovenko promised equity.” The court dismissed Gorovenko’s

DTSA misappropriation claim with prejudice and his RICO claim without

prejudice. The district court held that it lacked subject-matter jurisdiction over

Gorovenko’s remaining state claims, because no federal claim remained to support

supplemental jurisdiction over these claims.

      ACE timely moved for attorney’s fees under 

18 U.S.C. § 1836

(b)(3)(D),

which provides:

      [I]f a claim of the misappropriation is made in bad faith, which may
      be established by circumstantial evidence, a motion to terminate an
      injunction is made or opposed in bad faith, or the trade secret was
      willfully and maliciously misappropriated, [a court may] award
      reasonable attorney’s fees to the prevailing party.

      The district court denied ACE’s motion.

      The DTSA does not define “bad faith,” and we have not yet articulated a

standard for assessing bad faith under this statute. The district court applied the

standard set forth in Direct Technologies, LLC v. Electronic Arts, Inc., 

836 F.3d 1059, 1071

 (9th Cir. 2016), for assessing bad faith under the California Uniform

Trade Secrets Act (“CUTSA”), which contains a substantially similar attorney’s

fees provision to Section 1836(b)(3)(D). See 

Cal. Civ. Code § 3426.4

. Under the

CUTSA, “bad faith ‘requires objective speciousness of the plaintiff’s claim, as

opposed to frivolousness, and… subjective bad faith [by the plaintiff] in bringing

or maintaining the claim.’” Direct Technologies, LLC, 

836 F.3d at 1071

 (quoting



                                         4                                   24-5840
Gemini Aluminum Corp. v. Cal. Custom Shapes, Inc., 

95 Cal. App. 4th 1249, 1262

(2002)). Neither party argues that the district court erred in applying the standard

set forth in Direct Technologies, and we assume without deciding that “bad faith”

under the DTSA has the same meaning as under the CUTSA.

      ACE presses three arguments in support of a finding of subjective bad faith2:

(i) that Gorovenko used the threat of litigation to “intimidate and strongarm” ACE

into providing him additional funds to which he was not entitled; (ii) that

Gorovenko sent aggressive emails and text messages to ACE’s directors and co-

founder’s wife; and (iii) that Gorovenko refused to enter into a confidentiality

stipulation and “repeatedly publicly filed information” containing ACE’s trade

secrets. The district court rejected each of these arguments. We agree.

      First, ACE cites no binding precedent supporting the proposition that a pre-

suit settlement demand is indicative of bad faith. To the contrary, we have

recognized that “preceding the formal filing of litigation with an invitation to

engage in negotiations to settle legal claims is a common, if not universal, feature

of modern litigation.” Sosa v. DIRECTV, Inc., 

437 F.3d 923, 936

 (9th Cir. 2006).

Regardless, there is insufficient evidence in the record to support the conclusion

that Gorovenko “fully knew that [ACE] had not misappropriated anything.”


2
 The district court did not reach the issue of whether Gorovenko’s claims were
“objectively specious.” Because we hold that Gorovenko did not bring his DTSA
claim in subjective bad faith, we also do not reach the speciousness of that claim.

                                         5                                    24-5840
      Second, while we acknowledge that Gorovenko’s aggressive text messages

to ACE directors and their family members were inappropriate, ACE makes only

conclusory arguments as to the relationship between the communications and

Gorovenko’s underlying claims. This litigation was clearly contentious from the

beginning and “neither side” is above reproach.

      Third, ACE cites no authority requiring Gorovenko to have entered into a

confidentiality stipulation governing the sealing of documents, and we decline to

find that Gorovenko acted in bad faith by refusing to agree to ACE’s proposed

stipulation. Notably, once the district court entered an order governing sealing

procedures, “Gorovenko did not willfully defy any of the Court’s orders” and, in

fact, filed documents “in compliance with the Court’s sealing procedures.”

      Lastly, we reject ACE’s argument that the district court erred by considering

Gorovenko’s pro se status. The district court did not find that Gorovenko was

“exempt” from the DTSA’s attorney’s fees provision as ACE suggests; rather, the

court properly concluded that Gorovenko’s actions did not rise to the level of bad

faith required for an award of attorney’s fees under 

18 U.S.C. § 1836

(b)(3)(D).

Gorovenko’s conduct during this litigation may have been unprofessional by the

standards to which we hold attorneys, but as a pro se plaintiff, he likely is “far

more prone to making errors in pleading than the person who benefits from the

representation of counsel.” Huffman v. Lindgren, 

81 F.4th 1016, 1021

 (9th Cir.



                                         6                                    24-5840
2023) (quoting Lopez v. Smith, 

203 F.3d 1122, 1131

 (9th Cir. 2000) (en banc)).

And, “[t]here is a good reason that we afford leeway to pro se parties, who appear

without counsel and without the benefit of sophisticated representation.” 

Id.

      The district court did not abuse its discretion by denying ACE’s motion for

attorney’s fees.

      AFFIRMED.




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