                                                                              FILED
                           NOT FOR PUBLICATION                                APR 29 2014

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT

XUCHU DAI, as the bankruptcy                     No. 12-56577
administrator for Changzhou AMEC
Eastern Tools and Equipment Co., Ltd,            D.C. No. 5:11-cv-00354-VAP-
                                                 DTB
              Plaintiff - Appellant,
  v.
                                                 MEMORANDUM*
EASTERN TOOLS & EQUIPMENT,
INC., a California corporation and
GUOXIANG FAN, an individual,

              Defendants - Appellees.

                   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”).


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      “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




                                           -3-
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.

                                          -4-
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.


                                          -5-
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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