Suntech Power Holdings Co. Ltd v. Steven Wade

• Court: Court of Appeals for the Ninth Circuit
• Decided: November 20, 2018
• Docket: 17-16380
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION NOV 20 2018 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

SUNTECH POWER HOLDINGS CO. No. 17-16380 LTD., D.C. No. 3:12-cv-06409-VC Plaintiff-Appellant,

v. MEMORANDUM*

JULIAN RALPH WORLEY et al.,

Defendants,

and

STEVEN R. WADE,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Vince Chhabria, District Judge, Presiding

Submitted November 16, 2018** San Francisco, California

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

Liquidators appointed by a bankruptcy court to act on behalf of Suntech

Power Holdings Company timely appeal the district court’s dismissal of this action

against Steven Wade, the personal representative of the estate of former Suntech

officer Susan Wang. The parties dispute the interpretation of Suntech’s Articles of

Association. The law of the Cayman Islands applies to the interpretation of

Suntech’s Articles. Atl. Marine Constr. Co. v. U.S. Dist. Court, 571 U.S. 49, 65

(2013); Cal. Corp. Code § 2116. Reviewing de novo the dismissal, Proctor v.

Vishay Intertech. Inc., 584 F.3d 1208, 1218 (9th Cir. 2009), and the content of

foreign law, Fahmy v. Jay-Z, 891 F.3d 823, 829 (9th Cir. 2018), we affirm.

The district court correctly interpreted the contract to exculpate Suntech’s

directors from all but willful default. The "common meaning" interpretation of

Article 140 that Suntech advances renders the clause meaningless because it

exempts Suntech’s directors from all liability except all liability. Because that

interpretation is absurd and because the Articles’ history and provision’s context

support an alternative, reasonable construction, we reject the literal interpretation

of Article 140. The history of the Articles supports the district court’s

*** The Honorable Stephanie Dawn Thacker, Circuit Judge for the U.S. Court of Appeals for the Fourth Circuit, sitting by designation. 2 interpretation, because the previous version of the Articles used the bare term

"default" to mean "willful default." Additionally, Cayman law recognizes the

principle that a word is known by the company that it keeps. That canon supports

the district court’s interpretation: the nearby terms "dishonesty" and "fraud"

require willfulness, so it is reasonable to conclude that the drafters of the Articles

intended to allow suits only for willful default.

AFFIRMED.