Xuchu Dai, as the bankruptcy administrator for Changzhou AMEC Eastern Tools v. EASTERN TOOLS & EQUIPMENT, INC., a California corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
XUCHU DAI, as the bankruptcy
administrator for Changzhou AMEC
Eastern Tools and Equipment Co., Ltd,
Plaintiff - Appellant,
v.
EASTERN TOOLS & EQUIPMENT,
INC., a California corporation and
GUOXIANG FAN, an individual,
Defendants - Appellees.
No. 12-56577
D.C. No. 5:11-cv-00354-VAP-
DTB
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Virginia A. Phillips, District Judge, Presiding
Argued and Submitted March 7, 2014
Pasadena, California
Before: PREGERSON, PAEZ, and N.R. SMITH, Circuit Judges.
Xuchu Dai (“Dai”), bankruptcy administrator for AMEC Eastern Tools
Equipment Co., Inc. (“AMEC”), appeals the district court’s decision to deny his
motion to confirm an arbitration award against Eastern Tools & Equipment (“US
Eastern”) and its president, Guoxiang Fan (“Fan”).
FILED
APR 29 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

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“The court shall confirm [a foreign arbitration] award unless it finds one of
the grounds for refusal or deferral of recognition or enforcement of the award
specified in the [New York] Convention.” 9 U.S.C. § 207. Therefore, “[r]ather than
review the merits of the underlying arbitration, we review de novo only whether
the party established a defense under the Convention.” China Nat’l Metal Prods.
Import/Export Co. v. Apex Digital, Inc., 379 F.3d 796, 799 (9th Cir. 2004).
Nevertheless, a district court’s factual findings supporting its decision to confirm
or deny an arbitration award are reviewed for clear error. First Options of Chi., Inc.
v. Kaplan, 514 U.S. 938, 948 (1995).
I.
On appeal, the parties do not challenge the district court’s conclusions that
(1) duress may constitute a defense against confirmation of an arbitration award
under the New York Convention; and (2) California law applies in determining
whether Fan signed an agreement, which required arbitration, under duress.
Therefore, we need not address these two issues. See Indep. Towers of Wash. v.
Washington, 350 F.3d 925, 929 (9th Cir. 2003) (“[W]e cannot ‘manufacture
arguments for an appellant’ and therefore we will not consider any claims that
were not actually argued in appellant’s opening brief.”). It remains for us to
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determine whether the district court clearly erred in concluding that Fan signed the
agreement under duress.
The district court did not clearly err in finding that Fan signed the July
agreement “under circumstances that deprive[d] him of the exercise of free will.”
Tarpy v. Cnty. of San Diego, 1 Cal. Rptr. 3d 607, 614 (Cal. Ct. App. 2003). In
April (three months prior to signing the July agreement), Fan was arrested and
detained by Chinese police (though not charged with a crime). While Fan was in
prison, Dai approached him about signing an agreement that would settle the
business dispute between AMEC and US Eastern. Fan was only released after
signing the agreement and making a payment to AMEC. When the signed
agreement was not approved by AMEC’s creditors, the Chinese police contacted
Fan by phone and directed him to return and sign a similar agreement in July. On
these facts, the district court did not clearly err in finding that Fan “believed
reasonably that if he did not return and sign the agreement, the police would detain
[him] again until he signed.”
Likewise, the district court did not clearly err in finding that Dai’s conduct
was “unlawful,” Tarpy, 1 Cal. Rptr. 3d at 614, because Dai “knew of the
circumstances undermining Mr. Fan’s capacity to assent freely, and nevertheless
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took advantage of the situation to induce Mr. Fan to sign the agreement.” Dai
failed to provide evidence rebutting these findings.
Moreover, this conclusion does not violate the act of state doctrine, because
it does not involve any inquiry “into the validity of the public acts” taken by the
Chinese police. See Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401
(1964).
II.
The district court did not clearly err in finding that Fan did not ratify the July
agreement when he made an initial payment, because Fan did not, “with full
knowledge of the material facts entitling him to rescind, . . . engage[] in some
unequivocal conduct giving rise to a reasonable inference that he intended the
conduct to amount to a ratification.” Union Pac. R.R. Co. v. Zimmer, 197 P.2d 363,
368 (Cal. Ct. App. 1948). 1 The district court reasonably concluded there was a
sufficient “temporal connection” between “Fan’s arrest in April 2007, the
telephone calls from the Public Security Bureau between April and July 2007, the
order from Officer Huang in July 2007, and the first payment in February 2008,” to
1 Again, no party challenges this decision by the district court to apply
California law regarding ratification. Indep. Towers of Wash., 350 F.3d at 929.
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conclude that “Fan continued to fear possible detention if he did not authorize the
first payment.”
Fan’s participation in the CIETAC arbitration does not counsel a different
conclusion. See Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1279 (9th Cir.
2006) (en banc) (quoting First Options of Chi., 514 U.S. at 946) (Participating in
an arbitration on the merits after one’s objections to the arbitrability of the dispute
have been lost, does not “‘indicate a clear willingness to arbitrate that issue.’”).
Further, the district court did not improperly shift the burden of proof by
requiring Dai to prove ratification. Although Fan bore the burden of establishing
the defense of duress, Ministry of Def. & Support for the Armed Forces of the
Islamic Republic of Iran v. Cubic Def. Systems, Inc., 665 F.3d 1091, 1096 (9th Cir.
2011), this did not “eviscerate completely the burden on [Dai] to present some
evidence to support [an] asserted fact or legal argument.”
III.
Finally, the district court did not abuse its discretion in declining to hold an
evidentiary hearing before ruling on the motion to confirm, because it engaged in
an iterative effort that spanned months, winnowed down undisputed facts, and
allowed the parties ample opportunity to submit evidence. See Zurich Am. Ins. Co.
v. Int’l Fibercom, Inc. (In re Int’l Fibercom, Inc.), 503 F.3d 933, 946 (9th Cir.
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2007) (holding that an evidentiary hearing was not necessary where “[t]here was an
adequate factual basis for the [trial] court’s decision”).
AFFIRMED.
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