THEIS RESEARCH INC TRI v. BROWN BAIN (2001)

Theis Research, Inc. (“TRI”), appeals the district court's (1) grant of defendant Brown & Bain's motion to dismiss for failure to state a claim and (2) dismissal without prejudice, on venue grounds, of TRI's motion to vacate an arbitration award.

The district court's dismissal without prejudice of TRI's motion to vacate was properly based on Sunshine Beauty Supplies, Inc. v. United States District Court, 872 F.2d 310, 312 (9th Cir.1989), which held that venue dictated by 9 U.S.C. § 10 was mandatory. Applying Sunshine Beauty Supplies to this case would have required the motion to vacate to be heard in the District of Columbia, where the arbitration occurred.

 However, while this appeal was pending, the Supreme Court held that the venue provisions of 9 U.S.C. § 10 are permissive, not mandatory. Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 195, 120 S.Ct. 1331, 1334, 146 L.Ed.2d 171 (2000). Thus, venue in the Northern District of California may have been proper. Accordingly, we must vacate the district court's order and remand for reconsideration in light of Cortez Byrd Chips.

 We vacate as premature the district court's order granting Brown & Bain's motion to dismiss. The validity of the arbitration award must be determined prior to assessing whether the award precludes TRI's current claims. Further, TRI's assertions that the arbitration award was invalid because it was based on an illegal contract are properly resolved in the context of TRI's motion to vacate the award. We express no opinion on the merits of these issues.

REVERSED AND REMANDED.

PER CURIAM: