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86 Tul. L. Rev. 1397 (2011-2012)

handle is hein.journals/tulr86 and id is 1409 raw text is: Gulf Coast v Newlin: Reaffirmring the Fundamental Notions of Admiralty Jurisdiction I. OVERVIEW ............................................1397 II. BACKGROUND ............................... ......1398 III. THE COURT'S DECISION ........................ 402 IV ANALYSIS .. ............................................ 1405 I. OVERVIEW This litigation arose out of an unsuccessful oyster-dredging and distribution business venture.' Charles Newlin (Newlin), Roy Beken (Beken), and Dean Koy (Koy) formed several business enterprises for the purpose of dredging oysters off the coast of Mexico and distributing the oyster shells in the United States.2 Newlin formed Grupo Triad Meridian (Grupo), a Mexican corporation, to dredge oyster shell deposits, and Koy and Beken formed Gulf Coast Shell & Aggregate (Gulf Coast) to distribute the shells in the United States. Although Gulf Coast paid the purchase price of the dredge, the merchant would not sell to a U.S. entity; therefore, the Purchase Agreement named as the buyer Industrias Pasmoso S.A. de CV (Industrias), a Mexican entity managed by Newlin.4 The parties agreed that title to the dredge would transfer from Industrias to Grupo following its restoration and reappraisal; however, Newlin transferred title to another Mexican entity in which he possessed significant ownership, claiming the other partners in the venture ceased making payments toward the dredge's restoration.! As a result, Beken filed a derivative suit on behalf of Gulf Coast in the United States District Court for the Southern District of Texas against Newlin in personam and the dredge in rem.' The district court held for 1. Gulf Coast Shell & Aggregate LP v. Newlin, 623 F.3d 235, 238, 2011 AMC 421, 421-22 (5th Cir. 2010). 2. Id at 237-38, 2011 AMC at 422. 3. Id Both Beken and Newlin owned 24.75% of Grupo, and Koy owned 44.5%. Beken (and Richmond Materials Company, which Beken owns) and Koy each enjoyed a 49% interest in Gulf Coast. Id. 4. Id., 2011 AMC at 423. 5. Id Gulf Coast was one of the entities involved in making payments for the restoration of the dredge. Id 6. Id. Beken filed suit through Richmond and derivatively on behalf of Gulf Coast, and the magistrate judge ordered seizure of the dredge and security for its release. Id 1397

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