Petition — Wamp v. Chattanooga Housing Authority

Supreme Court brief1976

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Supteme Court, U. &

FILED

In The MAR 4 1976

Supreme Court of the United States

_MICHAEL RODAK, IR. CLroy

OCTOBER TERM, 1975 ——~ dame

_—— a

No. _@5-1252

DONALD L. WAMP, CARL L. GIBSON, SHERMAN

L. PAUL and MOCCASIN BEND ASSOCIATION,

Petitioners,

vs.

CHATTANOOGA HOUSING AUTHORITY, CiTY OF

CHATTANOOGA, TENNESSEE, CAMERON-OXFORD

ASSOCIATES, ADVANCE MORTGAGE CORPORA-

TION, MILLIGAN-REYNOLDS GUARANTY TITLE

AGENCY, INC., THE UNITED STATES OF AMER-

ICA EX REL. THE UNITED STATES DEPARTMENT

OF HOUSING AND URBAN DEVELOPMENT and

also EX REL. THE FEDERAL HOUSING

ADMiNISTRATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

RicHarp P. JAHN

TANNER & JAHN

1223 Volunteer Building

Chattanooga, Tennessee 37402

615-756-8473

Counsel for Petitioners

March 3, 1976

E. L. Mendenhall, Inc., 926 Cherry St.. Kansas City, Mo. 64106, 816-421-3030

TABLE OF CONTENTS

Opinions Below 2

EE CEL Gg Ga fn 560 6b ckanae bb oeeeaeee vue 2

I C. ocs eae tdbbe ees eas 2

ee a ee ade d ss bea Wars 5

a he adh ee bhn as bee ees 7

Reasons for Granting the Writ—

I. Petitioriers Did Have the Necessary Standing

UE ve obcscebdenuneesedhakenhokeneades 19

A. The Controlling Tennessee Decisions

Were Frroneously Applied by the Lower

Se ak webs akiuecheanee 19

B. Where Federal Rights Are Asserted in a

State Court Proceeding, Federal De-

cisions Control Standing to Sue ....... 23

C. Petitioners Sustained Sufficient ‘‘Injury

in Fact’’ to Meet Federal Standing to

FS ee | ee ere 27

D. The NEPA Issue Which Petitioners

Sought to Raise by Timely Amendment

After Removal of the Cause to the Fed-

eral District Court Should Have Been

Considered a Part of Their Complaint

When Determining Their Standing to

Se ches We caW sede bbb ebaus cle Cbeets 28

Il. The Failure to Resubmit the Cameron Hill

Project for Public Bidding in 1973 Violated

the Federal Housing Act and the Tennessee

Housing Authority Act As Well As the Gen-

eral Law on Public Contracts With the

Result That the Deed of Cameron Hill to

Cameron-Oxford Associates Was Void ...... 31

oe a TN tele cr Rare 5 a a ae 36

Appendix —

Opinion of the United States District Court for

the Eastern District of Tennessee ............ Al

Judgment of Dismissal, United States District

Court for the Eastern District of Tennessee ... Al3

Opinion of the United States Court of Appeals for

Es 0 ee een ek Al5

Judgment, United States Court of Appeals for

ee sewn Al8

Table of Authorities

CasEs

Alaska State Housing Authority v. Contento,

(Alaska Sup. Ct. 1967) 432 P. 2d 117 .......... 26

Badgett v. Rogers, 222 Tenn. 374, 436 S.W. 2d

EE De 20

Bennett v. Stutts, 521 S.W. 2d 575 (Tenn. 1975) 21, 22

Brown v. Mt. Vernon Housing Auth., (1952) 279

App. Div. 795, 109 N.Y.S. 2d 392 ............. 35

Burns v. City of Nashville, 142 Tenn. 541, 221

es in dis en cenwies vee es ¥ iS ba’ 20

Calvert Cliffs’ Coordinating Comm. v. Atomic

Energy Commission, 449 F. 2d 1109 (D.C. Cir.

SE Gitel CueSes 1 4c Nay denne cul oweee bene eases 30

Chesapeake & O. R. Co. v. Martin, 283 US.

Ts in ee EN is wirhd Kaede hee ake 6460 haus-ae Oe 4:0. 26

City of Buffalo v. Mollenberg- Bote Machine Co.,

GE 5 cndin guide ceils keen da WG 60. 26

Environmental Defense Fund v. Tennessee Valley

Auth., 468 F. 2d 1164 (C.A. 6, 1972) .......... 30

Goose Hollow Foothills League v. Romney, 334 F.

PCD <cknctee chee wkSouakeewersed cas 30

III

Green Street Association v. Daley, (C.A. 7, 1967)

Bn Os SN oi aW toad ks dude's 'a0kbe cuhh oeeebnel 26

Grubb v. Public Utilities Renee of Ohio,

(Ohio 1930) 50 S. Ct. 374, 281 U.S. 470, 74

ee ec oe Ere or + das Comes 25

Hanly v. Kleindienst, 471 F. 2d 823 (2d Cir.

dG knee news cecked Ache ekc lense save eeaes 31

Hanly v. Mitchell, 460 F. 2d 640 (2d Cir. 1972) ... 31

Holiday Magic, Inc. v. Warren, 357 F. Supp. 20

i Eo ie ou eee eee Cees ee 26

Mid-Continent Pipe Line Co. v. Hargrave, 129 F.

ee ee ol oe Poe vas 6acc oeeasee5s 26

Missouri v. Taylor, (Mo. 1924) 45 S. Ct. 47, 226

fe Se | 2 Aer ra rPrrrr rire oy rr 25

Missouri Pac. R. Co. vy. Fitzgerald, (Neb. 1°96) 16

S. Ct. 389, 160 U.S. 556, 40 L. Ed. 536 ........ 25

Pittman Const. Co. v. Housing Authority of

Opelousas, (W.D. La. 1958) 167 F. Supp.

ER ee ye ee ay ee 35

Sierra Club v. Morton, (1972) 405 U.S. 727, 31

L. Ed. 24 686, 92 S. Ct. 1961 ......... 23, 27, 28, 31

Silva v. Romney (Lynn), 342 F. Supp. 783 (D.C.

Mass., April 13, 1972); 482 F. 2d 1282 (C.A. 1,

EE rer rere er Te Ter 30

Town of Brookline v. Brookline Development Au-

thority, (Mass. Sup. Jud. Ct. 1962) 183 N.E. 2d

Ge o.vu2.06ed ob wks a ebG eset c6 Gb Weerens 69 55506 26

U. S. v. Students Challenging Regulatory Agency

Procedures (SCRAP), (1973) 412 U.S. 669, 37 L.

* § % | ee errr ree 23, 27, 28, 31

TexTs AND STATUTES

ee, ee ec aeee ere ee 26

56 Am. Jur. 2d, Municipal Corporations, §§ 504,

i Dives tes GS ae ween ees ees seek eeaeee nee 35

64 Am. Jur. 2d, Public Works and Contracts,

Sy Gay GR, GD... vccceviisseeseceescese ae 32, 33

Federal Housing Act (42 U.S.C.A. § 1441, et

GOR) ccanedcctine onus epee esle-eeuae aun 5, 26

@ GAG. © OGD ook cckiskats cheseie eee 5

National Environmental Policy Act (42 U.S.C.

gk FY ere re 3, 15, 26

@ UB. B Gee ss cn vcesveckescu eee 3

Tennessee Housing Authority Act, T.C.A. § 13-821 6

SB WIS @ BGG ook vi envccecedes vonseeeeeee 2

MISCELLANEOUS

1971 CEQ Guideline, Section 11 (17 ALR Fed.

FF Fe Pee ee ee 30

“HUD And The Human Environment; A Prelimi-

nary Analysis Of The Impact Of The National

Environmental Policy Act of 1969 Upon The De-

partment of Housing And Urban Development,”

58 Iowa Law Review 805-890 .................. 30

HUD’s Urban Renewal Handbook, Chapter 1, Sec-

OS... 8 GS eS 34

Neg

In The

Supreme Court of the United States

OCTOBER TERM, 1975

No.

DONALD L. WAMP, CARL L. GIBSON, SHERMAN

L. PAUL and MOCCASIN BEND ASSOCIATION,

Petitioners,

vs.

CHATTANOOGA HOUSING AUTHORITY, CITY OF

CHATTANOOGA, TENNESSEE, CAMERON-OXFORD

ASSOCIATES, ADVANCE MORTGAGE CORPORA-

TION, MILLIGAN-REYNOLDS GUARANTY TITLE

AGENCY, INC., THE UNITED STATES OF AMER-

ICA EX REL. THE UNITED STATES DEPARTMENT

OF HOUSING AND URBAN DEVELOPMENT and

also EX REL. THE FEDERAL HOUSING

ADMINISTRATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

The petitioners, Donald L. Wamp, Carl L. Gibson,

Sherman L. Paul and Moccasin Bend Association, a

Tennessee nonprofit corporation, pray that a writ of

certiorari issue to review the decree of the United States

Court of Appeals for the Sixth Circuit, rendered in

these proceedings on December 5, 1975, which affirmed

the dismissal of petitioners’ suit by the United States

District Court for the Eastern District of Tennessee,

on the ground that petitioners had no standing to sue.

OPINIONS BELOW

The opinion of the United ‘States District Court

for the Eastern District of Tennessee is reported at

384 F. Supp. 251 and is set forth at pages Al-A12 here-

inafter. The opinion of the United States Court of Ap-

peals for the Sixth Circuit is not reported and is set

forth at pages A15-A19 hereinafter.

JURISDICTION

The decision rendered by the United States Court

of Appeals for the Sixth Circuit was filed December 5,

1975. This petition for certiorari was filed less than 90

days after that date. The jurisdiction of this court is

invoked under 28 U.S.C. § 1254(1).

QUESTIONS PRESENTED

Petitioners sought to enjoin the construction of a

federally subsidized apartment complex upon Cameron

Hill, a substantial local landmark within an urban re-

newal project immediately adjacent to downtown Chatta-

nooga, Tennessee. They further sought cancellation of

the deeds and contracts bet ween the developer and the gov-

ernment agencies involved, and the compelling of a re-

evaluation, resolicitation and redisposition of the Cam-

eron Hill tract (Al-A2'). The lawsuit was filed in

1. Page references followed by the letter “A” are references

to the pages of the joint appendix filed with the United States

Court of Appeals for the Sixth Circuit in connection with the ap-

peal to that Court. Page references preceded by the letter “R"

are references to the original record. Page references preceded by

the Tennessee State Chancery Court (5A) and removed

by the respondents to the Federal District Court at

Chattanooga (2A, 24A, A2).

A public bid letting for the project involved had

occurred in 1969. After four years of negotiations with

the only 1969 bidder, and after repeated downgrading of

the contract requirements without resubmission for fur-

ther public bidding, the original bidder abandoned the

project and was dissolved. Without again readvertis-

ing the project for open competitive bidding, the local

housing authority, over widespread public protest, and

demand for such readvertisement, instead in late 1973

issued a deed to a stranger first formed only weeks be-

fore, which never had to bid competitively against

anyone for the public property. The land was sold at

fer below its value under the reuse plan, for an un-

needed local reuse, far beneath the true potential for

the site in question.

No Environmental Impact Statement (‘EIS’) under

the National Environmental Policy Act (“NEPA”), 42

U.S.C. § 4332(C), was ever prepared, nor were public

hearings held on the threshold issue of the necessity of

an EIS.

Petitioners asserted mismanagement of public funds

and property and the letting of an illegal contract by

the public authorities. They also asserted that they

had sustained special injury not shared in by the public

generally since they had been denied the opportunity to

speak as to the proper reuse of Cameron Hill and above

all the opportunity to bid in free and open competition

for the public land, which they desired to do.

(Footnote Continued)

letter ““A"’ are to the subsequent pages of this petition where the

opinions of the lower courts are attached as appendices.

‘ 4

One month after suit was filed, but after removal to

the local District Court, petitioners sought to amend

to raise the specific question of whether an EIS under

NEPA was, in any event, a prerequisite for conveying

the public land for the use intended.

Both lower courts found that petitioner lacked

standing to bring the initial suit in the Chancery Court

of Hamilton County, Tennessee, at Chattanooga, and

that accordingly, removal jurisdiction did not exist in

the Federal District Court, hence the action was to be

dismissed. The District Court held that the requested

NEPA issue amendment could not be considered on the

standing to sue question, holding that it would be im-

proper to allow the amendment if no standing to sue

existed under the complaint when the cause was re-

moved (A12).

The questions thereby presented are the following:

1. Did petitioners have standing to sue?

A. Were the controlling Tennessee decisions

erroneously applied by the lower Federal

Courts?

B. If not, do the recent decisions of the United

States Supreme Court governing the stand-

ing of a citizen to sue nonetheless control,

where federal rights are asserted in a state

court proceeding?

C. If so, did petitioners show sufficient injury

in fact to themselves to meet federal stand-

ing to sue requirements?

D. Should the NEPA issue which petitioners

sought to raise by a timely amendment

have been considered a part of their original

complaint when evaluating their standing

to sue?

2. Was the deed to Cameron Hill from the Chat-

tanooga Housing Authority to Cameron-Oxford

Associates void by reason of the failure of the

Chattanooga Housing Authority to resubmit the

project for public bidding, where both the Fed-

eral Housing Act, and the Tennessee Housing

Authority Act, adopted pursuant to the Fed-

eral Act, required the Chattanooga Housing Au-

thority to give “maximum opportunity, con-

sistent with the sound needs of the locality as

a whole, for the redevelopment of the urban

renewal area by private enterprise’’?

STATUTES INVOLVED

The Federal Housing Act provides in part as

follows (42 U.S.C. § 1455):

§ 1455. Requirements for loan- or capital-grant

contracts

Approval of urban renewal plan

Contracts for loans or capital grants shall be

made only with a duly authorized local public

agency and shall require that —

ia) The urban renewal plan for the urban

renewal area be approved by the governing body

of the locality in which the project is situated,

and that such approva! include findings by the

governing body that (i) the financial aid to be

provided in the contract is necessary to enable

the project to be undertaken in accordance with

the urban renewal plan; (ii) the urban renewal

plan will afford maximum opportunity, consistent

with the sound needs of the locality as a whole for

the rehabilitation or redevelopment of the urban

renewal area by private enterprise; (iii) the urban

renewal plan conforms to a general plan for the de-

velopment of the locality as a whole; and {iv) the

urban renewal plan gives due consideration to the

provision of adequate park and recreational areas

and facilities, as may be desirable for neighborhood

improvement, with special consideration for the

health, safety, and welfare of children residing in

the general vicinity of the site covered by the plan.

(Emphasis supplied).

The Tennessee Housing Authority law provides

in part as follows (T.C.A. § 13-821):

13-821. Conservation and rehabilitation by pri-

vate enterprise—Findings.—It is hereby found and

declared that (a) there exist in municipalities of

the state slum, blighted, and deteriorated areas

which constitute a serious and growing menace,

injurious to the public health, safety, morals and

welfare of the residents of the state, and the

findings and declarations made in § 13-813 with

respect to slum and blighted areas are hereby

affirmed and restated, (b) certain slum, blighted,

or deteriorated areas, or portions thereof, may re-

quire acquisitions and clearance, as provided in

§§ 13-813—13-827, since the prevailing condition

of decay may make impracticable the reclamation

of the area by conservation or _ rehabilitation,

but other areas or portions thereof may, through

the means provided in §§ 13-813—13-827, be

susceptible of conservation or rehabilitation in

such a manner that the conditions and evils here-

inbefore enumerated may be eliminated, remedied

or prevented, and to the extent feasible, salvable

slum and blighted areas should be conserved and

rehabilitated through voluntary action and _ the

regulatory process, and (c) all powers conferred

by §§ 13-813—13-827, are for public uses and

purposes for which public money may be ex-

pended and such other powers exercised, and the

necessity in the public interest for the provisions

of §§ 13-813—13-827, is hereby declared as a

matter of legislative determination. A municipality,

to the greatest extent it determines to be feasible

in carrying out the provisions of §§ 13-813—

13-827, shall afford maximum opportunity, con-

sistent with the sound needs of thc municipality

as a whole, to the rehabilitation or redevelop-

ment of areas by private enterprise. (Emphasis

supplied) [Acts 1955, ch. 181, § 1.]

STATEMENT OF FACTS

In 1957 an urban renewal program was adopted

in Chattanooga involving several hundred acres of

land immediately west of downtown Chattanooga, said

project being known as the “Golden Gateway Urban

Renewal Program" (R 3-5, 447). Included within the

project was Cameron Hill, a 55 acre tract lying im-

mediately west of downtown Chattanooga (R 5, 448).

It represented the largest undeveloped tract of land

in the immediate downtown vicinity and its total

area is to be contrasted with the approximately 70

acres in Chattanooga's central business district (Ex-

hibits 10, 1OA, 18 and 22).

Cameron Hill was a major historic landmark in

the Civil War history of the area (R 123, 316, 374,

Ex. 31, 396-397, 402, 405-406) and Boynton Park on

its top commemorated this history, all as shown by

various monuments and historical markers on the hill

(R 123, Ex. 19). The City of Chattanooga held title

tc Boynton Park (R 10, 15).

As part of said renewal plan, Cameron Hill was

lowered some 125 feet, thereby providing a major

source of fill dirt for other public needs and creating

approximately 22 acres of flat usable land on the

lowered top of the hill (R 78, 55; 79A). In the process,

Boynton Park was destroyed.

Both the original applicable reuse plan in 1958

(R 88, Ex. 34) as well as an amendment to same in

1968 (R 82, 88, 449-451, Ex. 36, Ex. 6) contemplated

that Cameron Hill, after lowering, would be used in

part for residential purposes, with up to seven acres

of the useable 22 acres available for commercial develop-

ment (R 20-21, 23-26).

In 1969 the respondent Chattanooga Housing Au-

thority (“CHA”) advertised for proposals for the de-

velopment of the entire Cameron Hill tract, consistent

with the reuse plan (Ex. 37). This was the largest

and most complex project in the urban renewal area

(R 50). At that time Cameron Hill was within the

Chattanooga Fire Zone, requiring substantially more

expensive fireproof construction than outside the zone

(R 281-283, 464-466}. The invitation to bid required

the developer to include the dedication of a public park

in his proposal, but left the size and location of the

park to the developer (R 11-12, Ex. 37). The invita-

tion to bid made no mention that proposals would be

acceptable conditioned upon the developer being able

thereafter to obtain financing for the proposed project.

The «2ly bid submitted was that of Future Chat-

tanooga Development Corporation (‘‘Future’’) (R 36,

454), which proposed to build a 600-unit apartment

complex estimated to cost $12,000,000.00 to $15,000 ,000.00

(R 36-39), with an offer of $345,000.00 for the public

land (See CHA minutes for October 16, 1969, Exhibit

11). Future’s proposal, however, was actually non-

responsive to CHA's advertised request for bids, since

it was expressly conditioned upon Future being able

to obtain the necessary financing for the proposed

project, which it had yet to achieve (R 42-43). This

had not been the practice on other bid lettings (R 290).

In 1970 Cameron Hill was excluded from the fire

zone by Chattanooga City Ordinance 17-51, thus per-

mitting substantially cheaper construction (about 20%)

than was permitted at the time of the 1969 bidding

(R 282-283, 464-466).

Future was never able to obtain the financing for

its ambitious project. CHA, however, did not resub-

mit the Cameron Hill site for further bidding but in-

stead permitted Future to repeatedly downgrade its

original proposal, always subject to the obtaining of

financing. Finally, Future proposed to CHA at its

meeting of May 12, 1972 (Exhibit 11) that Broadmoor

Shopping Centers, Inc. (““Broadmoor’’) be allowed to

join Future in the Cameron Hill Project, with same

thereafter to be a joint venture between these two

corporations (R 457). CHA did not object and again

made no effort to resubmit the matter for public bid-

ding. The joint venture submitted a revised proposal

to CHA at said meeting which eliminated from the

proposal the purchase and development of “that part

of the original complex fronting on Ninth Street with

a value of $120,000.00." On June 9, 1972, a contract

was entered into between CHA on the one hand and

Future and Broadmoor on the other (as approved at

said meeting of May 12, 1972), providing for the pur-

chase of the remaining bulk of the Cameron Hill realty

by the venture for $220,000.00 and the development in

phases of a residential housing complex on said realty

(Ex. 9). This development had been announced at

said meeting of May 12, 1972, as a $5.5 million com-

plex with 396 apartment units (Exs. 11 and 39). Said

contract expressly provided, however, that the obliga-

tions of Future and Broadmoor were subject to their

being able to obtain the necessary financing (R 43-44).

This is the only contract that ever resulted from

the bid letting in the fall of 1969 (R 39-40, 45, 103).

It is to be noted that the construction proposed under

said contract was to be at a cost of approximately

one-third of that publicly announced by Future shortly

after it made its original proposal (Exs. 7 and 11).

Further, without resubmitting the project for further

competitive bidding due to the changed conditions,

CHA allowed the joint venturers to avoid purchasing

and developing over one-third of the tract in terms of

value (Ninth Street frontage) and also to take advan-

tage of the removal of the site from the Chattanooga

Fire Zone (R 284). As a result, wood frame construc-

tion for low rise units was now proposed under said

contract instead of the original fireproof high rise

units. Said wood frame construction was in compli-

ance, however, with minimum FHA standards (R

435-437).

Thereafter, further modification in design and qual-

ity occurred, and the passing months again turned into

further years while the joint adventurers sought to de-

sign a feasible project of their liking which they would

be able to finance, with repeated extensions of time to

act being given them by CHA (R 46-48, 482).

At the meeting of CHA of November 21, 1973

(Ex. 11), it was announced that Future was being dis-

solved, and was withdrawing from the project (R 65,

460-461), and that a limited partnership was being or-

ganized which would carry on with the Cameron Hill

project, with Oxford Development Corporation (‘‘Ox-

ford’) as its sole general partner. The consent of CHA

was given at said meeting to this new arrangement

and to the conveyance of Cameron Hill to the proposed

limited partnership.

On November 29, 1973, an Indiana limited part-

nership was formed, known as Cameron-Oxford Asso-

ciates (‘Cameron’), whose certificate was recorded in

Hamilton County, Tennessee, on December 12, 1973

(Ex. 47). Said certificate described the Cameron Hill

realty as its place of business and showed that the

general partner was Oxford, with a five percent interest,

with Lyle A. Rosenzweig, Trustee, of Indianapolis,

Indiana, being the limited partner, with a ninety-five

percent interest, in exchange for $100.00 contributed to

the partnership.

Cameron was never in a contractual relationship

with CHA relative to the development of Cameron Hill

prior to December 19, 1973. On that date, however,

CHA nonetheless executed a special warranty deed to

Cameron, conveying a portion of the Cameron Hill

realty, including approximately 16 acres of the flat 22

acres on top, for the sum of $157,500.00 (Ex. 45; R

102, 489). CHA did this pursuant to its June 9, 1972

contract with Future and Broadmoor to which Cameron

was not a party (R 103). The deed required construc-

tion by the Grantee of the apartment project as ulti-

mately proposed by Future and Broadmoor to CHA.

It is the intention of CHA and Cameron that the

remainder of Cameron Hill be later conveyed to

Cameron for similar housing development at a similar

per acre price as otherwise called for by said contract

of June 9, 1972, to which Cameron was not a party

(Ex. 9). Public disclosure of the principal members

and investors in Cameron as required by law was never

made (76A-77A; R 63, 64-67, 68).

Thus, more than four years elapsed from the open-

ing of the original conditional bid for the development

of Cameron Hill until a deed to a portion of same oc-

curred with a required reuse calling for the construc-

tion of 380 low rise wood frame dwelling units, instead

of the 600 fireproof high rise units originally proposed

by Future (Exs. 7 and 23). No further invitation for

public bidding occurred after the original bid opening

in 1969 (R 49).

Under the procedures adopted by CHA and HUD,

these organizations are essentially passive and merely

receive reuse proposals instead of affirmatively initiating

same (R 213-214). No redevelopment or reuse proposal

can be accepted until both entities have approved same,

however (R 427), and these entities on occasion re-

quire proposal modification before such approval wil! be

granted, as in the present case (R 213-214).

Cameron proposed as the public park to be dedi-

cated as part of the project a six acre tract located

where the public road enters the hilltop. Only approxi-—

mately one and one-half acres of this six acres is on

the flat surface on top of the hill with the remainder

being on the steep hillsides (R 16, 18). The public

road bisects this smaller usable area into two small

tracts each less than an acre in size (Ex. 4).

This park bears no resemblance in utility, purpose,

or usable size to the original Boynton Park and was

obviously intended by Cameron to serve as a tastefully

landscaped gateway, built and maintained at public

expense, to Cameron’s housing project (R 119, 138-139).

The project is being financed by a $4,210,600.00

construction loan from respondent Advance Mortgage

Corporation, a Delaware corporation (‘‘Advance’’) se-

cured by a deed of trust (Exhibit 46) to the realty

from Cameron to respondent Milligan-Reynolds Guar-

anty Title Agency, Inc., Trustee (‘‘Milligan-Reynolds’’).

Advance, in turn, has obtained FHA mortgage in-

surance (R 159-161, 164, 235, 425) under Title 220 of

the Federal Housing Act (R 42, 47), which is concerned

with providing replacement housing in Urban Renewal

areas (R 30). The FHA commitment for Cameron

was made in December, 1973 (R 103, 471-473).

At the time the subject suit was filed on Febru-

ary 13, 1974, no construction had started on Cameron

Hill (R 103), despite a provision in said deed of Decem-

ber 19, 1973 (Ex. 45) requiring that same start with-

in 30 days of the date of the deed. Construction there-

after began. Cameron has elected to proceed despite

the institution of the present action before construction

started, and its full awareness of the contentions of

the Petitioners.

The price which CHA permitted Cameron to pay

in 1973 for the realty in question was based on 1969

appraisals (R 187; Exs. 15 and 16) which did not seek

to appraise the fair market value of the property as

such, but instead sought to determine the price which

the developer should pay for the land, as determined by

the economics of the proposed reuse of the land by

the developer (R 82-87). Thus, once project construc-

tion costs and ‘‘e approved rental rates were known,

after due allowauce for a profit for the developer,

original land cost was a variable which was adjusted

downward to make the developer's proposal economically

feasible, regardless of the actual value of the land.

No appraisal of land value based upon ail the avail-

able uses for the property under the 1968 reuse plan

was ever obtained (R 85-87). Land values have in-

creased substantially in the Chattanooga area since

1969 and particularly land of the type available on

Cameron Hill. On any reasonable basis the land was

worth far in excess of the sale price (R 121-123, 309-

313, 360-361). HUD agreed that private developers

were typically paying $1,000 per unit for non-public

raw land (R 185) whereas Cameron was paying about

$600, or $10,000 per usable acre (R_ 183-184); that

development costs were the same in either case (R 186);

and that no subsidy was supposed to be _ involved

(R 187).

The market for the type housing units involved at

the rentals proposed has been fully met in the past by

private developers in the Chattanooga area on land

other than public land (R 48-49). There has been a

proliferation of this type of housing in the Chattanooga

area since 1969 (R 163). There is no shortage of this

housing at the present time in the Chattanooga area

at these rentals and none projected (R 319-320). HUD

agreed that private developers have met Chattanooga's

need for this type housing (R 424-425).

Other than the public advertisemeat in 1969 seek-

ing proposals for the development of Cameron Hill,

however, no other public notice of meetings dealing with

Cameron Hill and its developers was given in advance

of such meetings by CHA and/or the City (R 61-62).

The Chattanooga Chapter of the American Institute

of Architects became aware in November of 1973 that

Future was withdrawing from the project and that

CHA proposed to go ahead with the project by deal-

ing with Cameron. At this point a committee of

three local architects, including petitioner Wamp, was

appointed by said Chattanooga Chapter of the AIA

to investigate what was happening.

On December 7, 1973, said Chattanooga Chapter

of the AIA officially protested by letter to CHA ‘the

proposed medium density ordinary FHA housing de-

velopment plan for Cameron Hill’’ (Ex. 23, R 297-298).

This letter with the reasons for the protest is set out

in full in the complaint (15A-16A) and was Exhibit 23

at the trial. As shown by said exhibit, it was felt

“the present proposal degrades this magnificent site

and . . . will prohibit proper future use’’. CHA was

asked “to stop this present proposed development.”’

It pointed out that the original proposed developers

had withdrawn, and that the project approved by CHA

and awarded to Cameron was done “with no competi-

tion or public notice’. It pointed out the changes in

Chattanooga since the last reuse study, and stated ‘we

are confident the site can now be utilized for a much

higher finer function if the business and design com-

munity is given an opportunity to compete on the basis

of changed criteria." The letter concluded by pledging

' the full resources of the Chattanooga Chapter of the

AIA to create a fitting development for Cameron Hill.

HUD was also aware of the stand of the local

architects (R 345) which the record indicates was a

unanimous opinion (R 297, 307, 326), before the deed

to Cameron.

NEPA (42 U.S.C. § 4321 et seq.) became effective

January 1, 1970. As set forth above, at that time,

there was no contract whatsoever between CHA and

Future, or any other developer with respect to Cameron

Hill. There _was no approval of any proposal by CHA

or HUD and no\FHA mortgage loan insurance commit-

ment of any sort.| A HUD capital grant of $9,105,755.00

to CHA constitu the principal funds used to finance

the Renewal Project, although $3,472,234.00 in city

funds were also u (Ex. 13). Approximately $1,250,000

of public funds was spent readying Cameron Hill for

reuse proposals (R 77-78). HUD's approval of the de-

tails of the transaction between CHA and Cameron

was not finally obtained until immediately before deed

delivery on December 19, 1973 (R 477-478; Ex. 44; Ex.

11).

Before HUD gave its approval to the proposed

housing development a “Special Environmental Clear-

ance Form’ (HUD form ECO-4) was prepared and filed

by HUD on May 25, 1973, as to the subject project

and ‘‘cleared’’ on July 2, 1973 (R 152-154; 249; Ex.

21). CHA did not participate in its preparation (R 73).

This form specifically found that an EIS was not re-

quired for the proposed Cameron Hill project (R 155).

Accordingly, HUD has found that ‘major federal

action significantly affecting the quality of the human

environment’’ under NEPA (42 U.S.C. § 4332(2)(C)) was

not involved in the Cameron Hill project.

Review of said form ECO-4 shows on its face that

many of the inquiries made by the form were ignored;

that only the briefest and most cursory answers were

given in most instances; and that repeatedly mere

conclusions without explanations or supporting facts

which could be reviewed are given.

Original suit was filed February 13, 1974 (24A),

before ground was broken for the project (13A, R 103).

On March 13, 1974, after removal to the Federal Court,

Petitioners sought to amend to allege violations of the

National Environmental Policy Act (“NEPA”) (39A-

42A).

On April 11, 1974, without acting upon said mo-

tion to amend, the District Judge set a special hear-

ing to begin April 29, 1974, to hear evidence and argu-

ment on whether Defendants were required to file an

Environmental Impact Statement (‘EIS’) under NEPA

(43A). Three days of hearings were held (A2). Hav-

ing concluded that initial removal jurisdiction did not

exist because of the finding of lack of standing to sue

in the State Court (A8, Al2), the District Judge held

that attempted amendments to the pleadings, subse-

quent to removal, to raise the NEPA issues, cannot

serve to confer Federal Court jurisdiction if none in

fact existed as of the time of removal (A3). Thus

the Court deemed it ‘‘unnecessary and inappropriate’”’

to act upon said motion to amend (A12), and did not

do so, nor did it consider the NEPA issues raised

by said proposed amendments though fully tried at said

specially set hearing.

The U. S. Court of Appeals for the Sixth Circuit

did not- pass on this action by the trial judge though

raised in the appeal.

At the District Court NEPA issue hearings, peti-

tioners presented substantial proof that an EIS was a

prerequisite under NEPA before a valid deed could be

delivered and the proposed project approved. Should

resolution of this issue become material the cause should

be remanded to the Federal District Judge for appro-

priate decision.

Plaintiff, Moccasin Bend Association, is a Tennes-

see nonprofit corporation chartered in 1958 (Ex. 20, R

145), whose members have been active for years in

seeking to properly preserve the Moccasin Bend area

across the Tennessee River from-Cameron Hill (R 141,

Ex. 32). This Plaintiff through its members years

ago actively resisted the lowering of Cameron Hill

and the destruction of Boynton Park, including a law-

suit which in 1962 went to the Tennessee Supreme

Court. That Court held they had no standing to sue

as to that issue (R 127, 381-382, 79A).

Thereafter, they spent funds (R 124) and worked

constantly towards the reestablishment of a_ suitable

park on Cameron Hill to replace Boynton Park, in

keeping with the historical significance of the site

(R 104-105, 114-115, 117, 119, 121-122, 124, 376-378,

459).

Members of the Association have vigorously pro-

tested the proposed park at CHA meetings and also

protested the lack of any opportunity on the part of

those interested to “participate in the planning for the

area to be set aside for park purposes until, in effect,

the plans for the project were an accomplished fact’’

(CHA’s minutes of January 12, 1973, Exhibit 11).

Petitioner Wamp was a past president of the

Chattanooga Chapter of the American Institute of

Architects with very substantial experience in planning

and developing apartment projects. He had been the

most active local architect in the overall Golden Gate-

way Urban Renewal Project of which Cameron Hill

was a part. He had been active through the local

Chapter of the AIA in studying the plans for Cameron

Hill from a professional and civic viewpoint and meet-

ing with the CHA as to problems noted since 1969

(R 291-301). He desired to bid for the property and

to develop same in accordance with the reuse plan

personally, under open competitive conditions (R 289-

290).

Various of the Plaintiffs and members of the

Association made repeated prior use of Cameron Hill

and particularly Boynton Park on its summit in past

years (R 120, 138, 142, 145, 382, 405). They desire

to use the park if again properly reestablished (R

128) and some possibly even to move to Cameron Hiill

(R 142-143). The original complaint charged:

“26. Plaintiffs are specially injured in that

they have been effectively denied a public hearing

on the issue of the proper use to which Cameron

Hill should be put, and/or opportunity to offer

proposals for the development of Cameron Hill

in free and open competition with any other in-

terested parties, an opportunity they earnestly seek,

not only as a matter of right, but also for the

betterment of Chattanooga.

“27. As taxpayers, Plaintiffs will also be ir-

reparably injured through the low return of taxes

to the community from the presently planned

housing project as compared to the much higher

tax yield the property should and would generate

if properly utilized.”

Cameron Hill is a leading site for the future

logical expansion of downtown Chattanooga. It is an

appropriate site for civic type buildings: park pur-

poses; appropriate commercial buildings; as well as

various types of housing, and particularly high rise

housing. The present development is probably the

least impressive of any that could be undertaken and

remain within the scope of the 1968 reuse plan.

Cameron Hill has tremendous potential for the Chatta-

nooga downtown area and, therefore, the entire com-

munity, if properly and realistically developed with ap-

propriate imagination (R 306, Ex. 23).

REASONS FOR GRANTING THE WRIT

Petitioners Did Have the Necessary

Standing to Sue

A. The Controlling Tennessee Decisions Were Er-

roneously Applied by the Lower Federal Courts.

Two Tennessee cases will fully illustrate to the

Court the basic Tennessee state law on the standing to

sue issue. They are Burns v. City of Nashville, 142

Tenn. 541, 221 S.W. 828 (1919); and Badgett v. Rogers,

222 Tenn. 374, 436 S.W. 2d 292 (1969).

Badgett cites Burns and exhaustively reviews the

prior cases and sets forth the general rule in Tennessee

as follows (page 294):

“As a general rule of long standing in Ten-

nessee, individual citizens and taxpayers may not

interfere with, restrain or direct official acts, when

such citizens fail to allege and prove damages or

injuries to themselves different in character or kind

from those sustained by the public at large.”’

On the same page it also stated the following:

‘However, the courts have recognized an ex-

ception to the general rule where it is asserted

that the assessment or levy of a tax is illegal

or that public funds are misused or unlawfully

diverted from stated purposes.”’

In Burns it was recognized that individual citizen-

taxpayers can bring suit against public officials for mis-

management and the letting of illegal contracts.

In view of the allegations and proof of misuse

of public property, illegality of the contract and deed

in question, and mismanagement, petitioners are well

within the exception to the Tennessee general rule, even

without alleging special injury to themselves.

The distinction made by the District Judge between

the misuse or unlawful diversion of public funds recog-

nized to be within the exception in Badgett, and the

misuse of public property here involved (A8-A9),

is a distinction without a difference. Merely because no

Tennessee case involving property as compared to funds

could be found (A8-A9), does not mean that there

is any distinction to be made between the type pub-

lic asset misused or unlawfully diverted, for the loss

to the public is equally great in either case.

Under the applicable statutes, regulations and reso-

lutions hereinafter discussed, it was entirely illegal

to dispose of Cameron Hill without free and open

competitive bidding.

While adhering to the foregoing authorities, the

Tennessee Supreme Court in a 1975 decision, Bennett

v. Stutts, 521 S.W. 2d 575 at page 577, recognized

the practicalities of persuading public offiiels, such

as the District Attorney General, to act to redress

public wrongs such as those alleged in the present

case. It stated

“Public spirited citizens should not be stifled

or stopped in their search for solution to public

wrongs and official misconduct such as are _in-

volved in this case.

x * *

(3) When citizens sue to rectify a _ public

wrong, under these circumstances, a copy of the

complaint shall be served upon the District Attor-

ney General. It shall be the duty of the trial

court forthwith to conduct an in limine hearing

designed to determine whether to permit plaintiffs

to proceed. If it be determined that the District

Attorney General's refusal to bring the action, or to

authorize the use of his name in its institution,

was improper or unjustified, or that plaintiff's case

is prima facie meritorious, the trial court shall per-

mit the action to proceed.”

In the subject case paragraph 3 of the prayers

for relief in the original complaint prayed that the

Attorney General of Hamilton County, Tennessee ‘‘be

notified of the filing of this complaint so that he may

intervene to enforce the rights of tiie general public un-

der these circumstances, should he determine to do so.”’

(23A). The record will reflect that no such interven-

tion occurred and that the trial court failed to hear

and consider whether the failure of the Attorney Gen-

era! to act in and of itself gave petitioners standing

under Tennessee law as summarized in the Bennett

decision.

The prior unreported 1962 decision of the Tennes-

see Supreme Court holding that the Moccasin Bend As-

sociation had no standing to resist the lowering of

Cameron Hill, and the destruction of Boynton Park on

its surface, was referred to by both the District Judge

(page Al2) and the U.S. Court of Appeals for the

Sixth Circuit (page A16) in support of their ruling.

As shown by the quote from that decision by the

U.S. Court of Appeals for the Sixth Circuit in its

opinion (page Al17), standing to sue was denied in

that case because the injury was general and not spe-

cial to the then plaintiffs. That is not the present

case.

Those of the petitioners who wished to bid and/or

be heard (21A) had no greater right to do so than any

other member of the public generally. They, however,

unlike the vast majority of the public, which had no

such direct interest in bidding, and/or being heard

in the decision making process, were specially injured

when denied the opportunity to bid under the altered

conditions and/or to otherwise be heard.

Petitioners accordingly respectfully contend that

the lower Federal Courts have failed to correctly apply

the controlling Tennessee decisions to this case and

have accordingly erroneously decided that petitioners

had no standing to sue.

B. Where Federal Rights Are Asserted in a State

Court Proceeding, Federal Decisions Control Standing

to Sue.

So far as Petitioners have been able to deter-

mine, this issue has not previously been passed upon

this court, or any other lower federal court.

Even if standing to sue did not exist under Ten-

nessee state law the recent decisions of this court have

revamped and broadened the law as to the standing

of a citizen to sue. The narrow general Tennessee rule

was formerly Federal law also. While there are earlier

and later cases, Petitioners believe the key decision

here to be U. S. v. Students Challenging Regulatory

Agency Procedures (SCRAP), (1973) 412 U.S. 669,

37 L. Ed. 2d 254, 93 S. Ct. 2405, which amplified

and clarified Sierra Club v. Morton, (1972) 405 U.S.

727, 31 L. Ed. 2d 636, 92 S. Ct. 1361.

In SCRAP this court stated (412 U.S. 686-688):

“Relying upon our prior decisions in Data

Processing Service v Camp, 397 US 150, 25 L Ed

2d 184, 90 S Ct 827, and Barlow v Collins, 397

US 159, 25 L Ed 2d 192, 90 S Ct 832, we held

that § 702 of the APA conferred standing to ob-

tain judicial review of agency action only upon

those who could show ‘that the challenged action

had caused them “injury in fact,’’ and where the

alleged injury was to an interest ‘‘arguably within

the zone of interests to be protected or regulated’’

by the statutes that the agencies were claimed

to have violated.” 405 US, at 733, 31 L Ed 2d

636.”’

“In interpreting ‘injury in fact’ we made it

clear that standing was not confined to those who

could show ‘economic harm,’ although both Data

Processing and Barlow had involved that kind of

injury. Nor, we said, could the fact that many

persons shared the same injury be insufficient reason

to disqualify from seeking review of an agency's

action any person who had in fact suffered in-

jury. Rather, we explained: ‘Aesthetic and en-

vironmental well-being, like economic well-being, are

important ingredients of the quality of life in our

society, and the fact that particular environmental

interests are shared by the many rather than the

few does not make them less deserving of legal

protection through the judicial process.’ Id., at 734,

31 L Ed 2d 636. Consequently, neither the fact that

the appellees here claimed only a harm to their

use and enjoyment of the natural resources of the

Washington area, nor the fact that all those who

use those [412 US 687] resources suffered the same

harm, deprives them of standing.

In Sierra Club, though, we went on to stress

the importance of demonstrating that the party

seeking review be himself among the injured, for

it is this requirement that gives a litigant a direct

stake in the controversy and prevents the judicial

process from becoming nu more than a vehicle for

the vindication of the value interests of concerned

bystanders. No such specific injury was alleged in

Sierra Club.”’

x * *

“Unlike the specific and geographically limited

federal action of which the petitioner complained

in Sierra Club, the challenged agency action in

this case is applicable to substantially all of the

Nation’s railroads, and thus allegedly has an ad-

verse environmental impact on all the natural re-

sources of the country. Rather than a _ limited

group of percons who used a picturesque valley in

California, all persons who utilize the scenic re-

sources of the country, and indeed all who breathe

its air, could claim harm similar to that alleged

by the environmental groups here. But we have

already made it clear that standing is not to be

denied simply because many people suffer the same

injury.”

* * *

“To deny standing to persons who are in fact in-

jured simply because many others are also injured,

would mean that the most injurious and widespread

Government actions could be questioned by nobody.

We cannot accept that conclusion.”

When federal questions arise in causes pending in

the state courts, the latter are competent to decide

them. Missouri Pac. R. Co. v. Fitzgerald, (Neb. 1896)

16 S. Ct. 389, 160 U.S. 556, 40 L. Ed. 536. The state

and federal courts have concurrent jurisdiction of suits

of a civil nature arising under the Constitution and

laws of the United States save in exceptional instances

where the jurisdiction has been restricted by Congress

to the federal courts. Grubb v. Public Utilities Com-

mission of Ohio, (Ohio 1930) 50 S. Ct. 374, 281 U.S.

470, 74 L. Ed. 972. See also Missouri v. Taylor, (Mo.

1924) 45 S. Ct. 47, 226 U.S. 200, 69 L. Ed. 247.

Apart from the requested amendment charging

NEPA violation (39A), the original complaint charged

violations of provisions of the Federal Housing Act and

also of HUD guidelines which gave rights to Petitioners

and which Petitioners were entitled to enforce (18A, 19A,

21A). All state laws and Chattanooga Housing Au-

thority resolutions involved in this case are permeated

with the overriding federal enabling legislation and have

a quasi federal tinge. Federal funds which filtered to

the local level are also heavily involved.

It is clear that the plaintiffs could bring an action

against HUD and the other defendants in State Court

pursuant to the Federal Housing Act, 42 U.S.C.A.

§§ 1441, et seq., because Congress has not expressly

limited jurisdiction under this act to federal courts and

therefore concurrent jurisdiction exists. Mid-Continent

Pipe Line Co. v. Hargrave, 129 F. 2d 655 (C.A. Okl.

1942); Holiday Magic, Inc. v. Warren, 357 F. Supp.

20 (D.C. Wis. 1973).

For examples of cases where citizens’ rights under

the Federal Housing Act have been dealt with in the

state courts see also, Alaska State Housing Authority

v. Contento, (Alaska Sup. Ct. 1967) 432 P. 2d 117;

Town of Brookline v. Brookline Development Authority,

(Mass. Sup. Jud. Ct., 1962) 183 N.E. 2d 484; City of

Buffalo v. Mollenberg-Betz Machine Co., 279 N.Y.S.

2d 842. See also Green Street Association v. Daley,

(C.A. 7, 1967) 373 F. 2d 1.

Just as there is no restriction in the Federal

Housing Act preventing a citizen from enforcing his

federal rights thereunder in a state court, similarly there

is no such restriction in NEPA (42 U.S.C. § 4321, et

seq.).

When a state court determines federal questiohs,

its decisions on federal law must conform to the deci-

sions of the United States Supreme Court. Chesapeake

& O. R. Co. v. Martin, 283 U.S. 209; 20 Am. Jur. 2d,

Courts, § 226 and cases therein cited. Any other rule

would be an intolerable interference with the federal

right.

It is accordingly respectfully submitted that the

“injury in fact’’ concepts set forth in Sierra Club and

SCRAP control standing to sue to assert federal rights

even if these rights were asserted in a state court pro-

ceeding.

C. Petitioners Sustained Sufficient “Injury in Fact”

to Meet Federal Standing to Sue Requirements.

Those of petitioners who desired to bid in 1973 suf-

fered ‘“‘economic harm’’ when denied that opportunity to

make a profit. The statutes directing that ‘“‘maximum

opportunity” be given for development by private enter-

prise, as well as the law of public contracts generally,

were violated when no competitive bidding occurred, re-

sulting in injury to an interest of petitioners ‘‘argu-

ably within the zone of interest to be protected or

regulated by the statutes that the agencies were claimed

to have violated.’"’ The additional taxes the individ-

ual petitioners will have to pay will also result in

economic injury. :

Further petitioners have shown harm to their use

and enjoyment of the natural resources of the Chatta-

nooga area by the gross mishandling of the Cameron

Hill tract, and particularly the reestablishment of the

public park thereon. They have shown a much greater

degree of injury, in fact, than the students in SCRAP

who were found to have standing to sue.

In a footnote the U.S. Court of Appeals for the

Sixth Circuit in its opinion stated (page A17):

“Even if federal standing decisions were appli-

cable, appellants would be met by the decisions of

this court in Gibson & Perin Co. v. City of Cin-

cinnati, 480 F.2d 936 (6th Cir. 1973), cert. denied,

414 U.S. 1068 (1973); and South Hill Neighborhood

Association v. Romney, 421 F.2d 454 (6th Cir.

1969), cert. denied, 397 U.S. 1025 (1970).”’

The foregoing decisions cannot stand in the face of

Sierra Club and SCRAP, if the foregoing decisions are

otherwise deemed to be proper authority denying peti-

tioners the necessary standing to sue under the facts

in this case.

D. The NEPA Issue Which Petitioners Sought to

Raise by Timely Amendment After Removal of the

Cause to the Federal District Court Should Have

Been Considered a Part of Their Complaint When

Determining Their Standing to Sue.

The U. S. Court of Appeals for the 6th Circuit held

that if the state court lacks jurisdiction of the subject

matter or of the parties, the Federal Court acquires

none when the cause is removed to that court (page

Al7). The District Judge further held that an at-

tempted amendment to the pleadings subsequent to re-

moval cannot serve to confer Federal Court jurisdiction

if none, in fact, existed as of the time of removal

(A3).

Assuming that the allegations of the original com-

plaint in the state Chancery Court were insufficient to

give petitioners standing to sue, which they dispute,

it is clear that the amendment which they sought ap-

proximately a month after suit was filed, raising the

question of whether NEPA required an EIS before the

project could be approved, and a valid deed granted,

would unquestionably have been an issue petitioners had

standing to raise under the Sierra Club and SCRAP

decisions.

The state court had jurisdiction of this issue.

Actually, the complaint as filed was broad enough to

raise this issue since denial of the right to participate

in the decision-making process was specifically alleged,

although no reference to NEPA per se was originally

made.

Under these circumstances, where the actions of the

respondents in removing the cause prevented petitioners

from seeking a timely amendment in the state court

proceedings, is it proper for the District Judge to

dismiss the cause or at the least should he have re-

manded the cause to the state court, which had the

power to allow the amendment, even if the District

Judge felt that he did not because of the technicalities

of removal jurisdiction? Petitioners respectfully submit

that as a matter of proper procedure, under the peculiar

circumstances of this case, they should not have been

required to refile their law suit, with the NEPA issue

included in the new complaint, but instead at the least

were entitled to a remand to the state court for allow-

ance of the amendment.

By considering only the status of the pleadings as

of the time of removal without reference to the plead-

ings as they would have been after timely amendment,

and deciding the standing to sue issue on the more nar-

row, rather than the broader viewpoint, petitioners were

denied, through no fault of their own, a proper view of

their overall position when their standing to sue was

being evaluated.

This was particuiarly ironic since the NEPA issue

was fully tried before the District Judge by all parties,

even though the amendment had not been allowed.

There was a clear requirement that an EIS under

NEPA be prepared for the project in question prior

to its authorization but none whatsoever was prepared

nor has it been prepared to date. With the acreage,

location and the dollar amount of the FHA loan com-

mitment here involved, existing cases quickly demon-

strate that an EIS under-NEPA was a prerequisite.

Silva v. Romney (Lynn), 342 F. Supp. 783 (D.C.

Mass., April 13, 1972); 473 F. 2d 287 (C.A. 1, Feb.

2, 1973); and 482 F. 2d 1282 (C.A. 1, July 5, 1973)

establishes as a matter of law that an EIS under NEPA

is a prerequisite to valid HUD action approving a sale

to a private developer of land for construction of more

than 100 housing units, where a $4,000,000.00 HUD

mortgage guarantee was involved—almost exactly the

present case. Silva also held that the private contractor

was in a “federal partnership” with HUD, and that

both were properly subject to a preliminary injunction

by the District Court pending proper compliance with

NEPA.

See also Goose Hollow Foothills League v. Romney,

334 F. Supp. 877 (1971) and 58 Jowa Law Review,

805-890 where as extensive article appears entitled

“HUD And The Human Environment; A Preliminary

Analysis Of The Impact Of The National Environ-

mental Policy Act of 1969 Upon The Department of

Housing And Urban Development,” and particularly

pages 845 ff. |

The major federal action in question involved here

occurred after NEPA became effective, hence NEPA

had to be complied with. Environmental Defense Fund

v. Tennessee Valley Auth., 468 F. 2d 1164 (C.A. 6,

1972); Calvert Cliffs’ Coordinating Comm. v. Atomic

Energy Commission, 449 F. 2d 1109 (D.C. Cir. 1971);

see also § 11 of the 1971 CEQ Guideline (17 ALR Fed.

33 at 49-50).

As the lead federal agency, HUD was responsible

for complying with NEPA. Prior to making its thres-

hold determination of significance under NEPA, HUD

must give notice to the public of the proposed major

federal action involved and an opportunity to submit

relevant facts which might bear upon the agency's

threshold determination. Hanly v. Kleindienst, 471 F.

2d 823 (2d Cir. 1972); Hanly v. Mitchell, 460 F. 2d

640 (2d Cir. 1972). This obviously was never done in

the subject case in violation of plaintiffs’ rights (R 226).

HUD acknowledged that major federal action was

involved in the present case but felt that there was no

significant environmental impact (R 258-259). It ac-

knowledged that an EIS would have been required when

Cameron Hill was lowered if NEPA had then been in

existence (R 252). It also acknowledged that the HUD

office handling the project had prepared only one EIS

under NEPA, and this involved a renewal housing

project at Greenville, Tennessee almost identical in

dollars and acreage with the subject project (R 267-

268).

It accordingly appears that there was substantial

merit to the NEPA issue which petitioners sought to

raise and which they had standing to raise under Sierra

Club and SCRAP. The matter should have been han-

died procedurally so that the amendment could have

been allowed before the standing to sue issue was deter-

mined.

The Failure to Resubmit the Cameron Hill Project for

Public Bidding in 1973 Violated the Federal Housing

Act and the Tennessee Housing Authority Act As Well

As the General Law on Public Contracts With the

Result That the Deed of Cameron Hill to Cameron-

Oxford Associates Was Void

Although the District Judge found that Petitioners

had no standing to sue, hence he had no jurisdiction,

he nonetheless went into the merits of petitioners’

contentions as to illegal acts on the part of the respon-

dents. While finding conduct that was ‘‘most inap-

propriate” (All); “unusual, if not questionable’ (AQ),

and an illegal failure to make public disclosure of the

identity of the principal members of the developer

(Al10), which latter illegality the District Judge found

Plaintiffs had no standing to litigate (A10), the Dis-

trict Judge otherwise heid that he “is unable to find

any specific instance of illegal conduct on the part of

the Chattanooga Housing Authority or any other defen-

dant with regard to” the disposition of Cameron Hill

(AQ).

The U. S. Court of Appeals for the Sixth Circuit

did not deal with the merits of these findings though

raised in petitioners’ appeal to that Court.

When Congress and the Tennessee Legislature each

adopted statutory provisions requiring those responsible

for the redevelopment of public land in urban renewal

areas “to afford maximum opportunity . . . to the re-

habilitation or redevelopment . . by private enter-

prise’ it must be presumed that the well established

general law in the field of public contracts was the

standard by which the true meaning of those words was

to be established. The following excerpts from the

article on ‘“‘Public Works and Contracts” at 64 Am.

Jur. 2d is highly material on the applicable general law.

From Section 58

“Indeed, it is the duty of the public authorities

to reject all bids which do not comply substan-

tially with the terms of the proposal, for any other

rule would destroy free competition. A_ contract

entered into on terms more favorable to the con-

tractor than indicated by the advertised plans or

specifications, or incorporating material changes in

and additions to those plans and_ specifications,

is void.”’

From Section 66

“After bids have been made upon the basis

of plans and specifications prepared by public au-

thorities and given out to all interested bidders,

no material or substantial change in any of the

terms of such plans and specifications will be al-

lowed without a new advertisement giving all

bidders opportunity to bid under the new plans

and specifications.

Thus, public authorities cannot enter into a

contract with the lowest bidder containing sub-

stantial provisions beneficial to him, not included

in or contemplated in the terms and specifications

upon which bids were invited; the contract which

they execute must be the contract offered to the

lowest responsible bidder by advertisement, and

any contract entered into containing substantial

provisions beneficial to the bidder which were not

included in the specifications is void. Any other

course would prevent real competition, lead to

favoritism and fraud, and defeat the purpose of

the law in requiring contracts to be let upon bids

made upon advertised specifications. A contract

let upon the basis of anything else but the adver-

tised plans and specifications would be one let

without the competitive bidding which is necessary

to give it validity.”

From Section 80

“The law does not permit private negotiations

with an individual bidder, nor any change of plans

and specifications submitted for the competition,

nor variances for the purpose of obtaining a change

in the bid of one or more bidders. The whole

matter is to be conducted with as much fairness,

certainty, publicity, and absolute impartiality as

any proceeding requiring the exercise of quasi-

judicial authority. Thus, if after advertising for

and receiving sealed proposals for the doing of

public work for a municipality, none of the bids

is found satisfactory, the public body has no au-

thority to favor one of the bidders by negotiations

with him privately, changing the scope of the work

to be done or the terms of payment therefor in

consideration of the reduction of his offer. All

persons desiring to bid upon the work and willing

to comply with the terms prescribed must have

equal opportunities to do so; and if the work is

not awarded upon the first competition for any

legitimate reason, it must be submitted to a sec-

ond, with full opportunity as before for all persons

desiring to participate to do so.”

The resolution of CHA adopted May 12, 1967,

required the disposition of all Renewal Project pronerty

“under open competitive conditions.” At the Board

meeting of CHA held July 1i, 1969 (Ex. 11) the reso-

lution authorizing the public offering of Cameron Hill

specifically provided for ‘‘sale under open competitive

conditions as set out in the public notice. . ... HUD's

own guidelines by which CHA was bound required dis-

posal of project land “in a fair and equitable manner”

with procedures designed to assure “that they are open,

in one way or another to public scrutiny.’"’ See HUD's

Urban Renewal Handbook, Chapter 1, Section 1 (RHM

7214.1, set forth in paragraph 24I of the Complaint,

19A-20A). Said HUD guidelines further require (as

there shown) that “each disposal of land . . . shall be

at a price that is not less than the fair value of the

-_-~

land for uses in accordance with the Urban Renewal

Plan.”

The foregoing CHA resolutions and HUD guide-

lines complied with the statutory requirements. They

were never cancelled or withdrawn. They were ignored

when CHA conveyed to Cameron without prior public

bidding in late 1973.

It was an abuse of discretion and arbitrary and

capricious for CHA and HUD to allow the substantial

changes in bid conditions to occur as here, without

again submitting the matter for further public com-

petition. As trustees for the public of this valuable

land they abused fundamental trust law principles pro-

hibiting favoritism and requiring reasonable effort to

obtain the best price and best proposal. Any citizen

such as petitioners who desired an equal opportunity

to compete for the purchase and development of

Cameron Hill has been effectively denied such oppor-

tunity under the circumstances of this case. Maximum

opportunity to compete has not been given, as required

by both state and federal law. Any such citizen has

been specially injured in that he has been denied a

fundamental right granted by ‘Tennessee and federal

law.

It was the obligation of Cameron to ascertain at

its peril that CHA was acting within its authority when

Cameron accepted the deed to Cameron Hill from CHA.

56 Am. Jur. 2d, ‘Municipal Corporations’’, §§ 504 and

554. When dealing with the public housing authority

“plaintiffs were bound to know the limitation of its

power."’ Brown v. Mt. Vernon Housing Auth., (1952)

279 App. Div. 795, 109 N.Y.S. 2d 392. See also

Pittman Const. Co. v. Housing Authority of Opelousas,

(W.D. La. 1958) 167 F. Supp. 517.

ee ee

So :

——

Petitioners respectfully insist that the foregoing

statutes, regulation, and resolution requiring that max-

imum opportunity be given to compete must be read

in the light of the foregoing general law. It would be

ridiculous to assume that Congress had any lesser

standard in mind when it insisted on maximum op-

portunity as the overriding standard. It certainly did

not revoke the general long-standing salutary rules

governing bidding on public contracts, requiring equality

of opportunity to all and preference to none. None of

the defendants can point to any authority relieving

HUD and CHA from complying with these basic bid-

diag principles essential to the public welfare. Thus

the District Judge was in error when he described the

procedure followed merely as ‘most inappropriate”’

but legal (All), instead of holding the award of the

project and the deed to be illegal and void.

CONCLUSION

For the foregoing reasons it is respectfully sub-

mitted that a Writ of Certiorari should accordingly

issue to review the action of the U. S. Court of Ap-

peals for the 6th Circuit approving the decision of the

U. S. District Court for the Eastern District of Ten-

nessee, Southern Division.

Respectfully submitted,

RicHarp P. JAHN

TANNER & JAHN

1223 Volunteer Building

Chattanooga, Tennessee 37402

Attorneys for Petitioners

March 3, 1976

TO me rs ARS. eo

APPENDIX

IN THE UNITED STATES DISTRICT COURT FOR

THE EASTERN DISTRICT OF TENNESSEE,

SOUTHERN DIVISION

CIV-1-74-41

DONALD L. WAMP; MARK K. WILSON, JR.;

CARL L. GIBSON; SHERMAN L. PAUL; and

MOCCASIN BEND ASSOCIATION, a

Tennessee non-profit corporation,

Plaintiffs

-VS.-

CHATTANOOGA HOUSING AUTHORITY, a _ Ten-

nessee corporation; CITY OF CHATTANOOGA, TEN-

NESSEE, a mu:- ipal corporation; CAMERON-OXFORD

ASSOCIATES, an Indiana limited partnership; AD-

VANCE MORTGAGE CORPORATION, a_ Delaware

corporation; MILLIGAN-REYNOLDS GUARANTY

TITLE AGENCY, INC., a Tennessee _ corporation;

THE UNITED STATES OF AMERICA, ex rel the

UNITED STATES DEPARTMENT OF HOUSING

AND URBAN DEVELOPMENT and also ex rel the

FEDERAL HOUSING ADMINISTRATION,

Defendants

OPINION

(Filed September 19, 1974)

This is an action in which the plaintiffs seek to

enjoin the construction of an apartment complex upon

Cameron Hill, a local landmark within an urban re-

newal project in Chattanooga, Tennessee. The plaintiffs

seek further to obtain a cancellation of the deeds and

contracts between the developer and the government

agencies in interest and to compel a re-evaluation, re-

solicitation, and redisposition of the Cameron Hill tract.

The lawsuit was filed in the state court and removed

to this court. It is presently before this Court upon

the following motions: (1) motions on behalf of the de-

fendants, Chattanooga Housing Authority and the City

of Chattanooga, to dismiss the complaint for lack of

standing on the part of the plaintiffs to maintain the

lawsuit (Court File #8 and #11); (2) motion on behalf

of the plaintiffs for a preliminary injunction (Court

File #17); (3) motion on behalf of the piaintiffs to

amend their complaint so as to allege a cause of ac-

tion for violation of the National Environmental Policy

Act of 1969, 42 U.S.C. § 4332(2)(c) (Court File #18);

and (4) motion on behalf of the defendant, Chattanooga

Housing Authority, for summary judgment (Court File

#29). An evidentiary hearing extending over portions

of three days was held on the plaintiffs’ motion for a

temporary injunction and the case is now before the

Court upon the record thus established.

A threshold question in this lawsuit is with reici-

ence to the removal jurisdiction of this Court, for, as

noted, this lawsuit was filed in the state court and

removed to this court. The defendants, the United

States Department of Housing and Urban Development

(HUD) and the Federal Housing Authority (FHA),

petitioned for removal, averring federal agency removal

jurisdiction under 28 U.S.C. § 1346(a)(2) and § 1441(a).

The other defendants petitioned for removal averring

federal question removal jurisdiction under 28 U.S.C.

§ 1331 and § 1441. The parties have raised no issue

regarding removal jurisdiction but the defendants have

“ ae ll OAS et 6

each asserted a lack of standing upon the part of the

plaintiffs to maintain the lawsuit. That assertion of

necessity raises the issue of removal jurisdiction, for

a finding of a lack of standing would prevent the

existence of a “case or controversy,” a prerequisite

to federal court jurisdiction under Article III of the

Federal Constitution. (Association of Data Processing

Service Organizations, Inc. v. Camp, 397 U.S. 150, 25

L. Ed. 2d 184, 90 S. Ct. 827 (1970); Sierra Club v.

Morton, 405 U.S. 727, 31 L. Ed. 2d 636, 92 S. Ct.

1361 (1972). In the absence of jurisdiction, no right

of removal could exist.

In considering the issue of standing, further prin-

ciples of removal law must be borne in mind. The first

such principle is that the right of removal must have

existed as of the time removal was attempted and the

pleadings must be viewed accordingly. American Fire

& Casualty Co. v. Finn, 341 U.S. 6, 95 L. Ed. 702,

71 S. Ct. 534 (1951); McLeod v. Cities Service Gas

Co., 233 F. 2d 242 (10th Cir., 1956). Developments

in the lawsuit or attempted amendments to the plead-

ings subsequent to removal cannot serve to confer fed-

eral court jurisdiction if none in fact existed as of the

time of removal. Accordingly, the jurisdictional issue

must be resolved before the Court can consider the

plaintiffs’ post-removal motion to amend their complaint

or the plaintiffs’ motion for a temporary injunction.

A second principle of removal law that must be

borne in mind is that iurisdiction in the state court

is also a prerequisite to removal of a lawsuit to the

federal court, as federal court removal jurisdiction is to

this extent derivative. In the absence of state court

jurisdiction, a dismissal rather than a remand of the

lawsuit is required. Lambert Run Coal Co. v. Balti-

a a

more & O. R. Co., 258 U.S. 377, 66 L. Ed. 671,

42 S. Ct. 349 (1922); Venner v. Michigan Central

R. Co., 271 U.S. 127, 70 L. Ed. 868, 46 S. Ct. 444

(1926); Freeman v. Bee Machine Co., 319 U.S. 448,

87 L. Ed. 1509, .... S. Ct. .... (1943). See also

Moore’s FEDERAL PRACTICE, Vol. 1A, § 0.164[2]

note 41 and § 0.157[3]}.

It is appropriate, therefore, to look initially to the

issue of jurisdiction in the state court prior to removal.

It is also appropriate to note that the lack of standing

of a party to maintain a lawsuit has been held to be

jurisdictional in the Chancery Courts of Tennessee. In

Patton v. Chattanooga, 108 Tenn. 197, wherein the

issue was with regard to the standing of a taxpayer

to maintain an action in chancery court against a mu-

nicipality, the rule was stated thusly at page 227:

“Thus examined, the Tennessee cases show that the

court had jurisdiction to pass on questions, ad-

mittedly of a judicial nature, only when such ju-

risdiction is invoked ‘by those having a _ special

or peculiar interest in the question and there are

none to the contrary’.’’ (Emphasis supplied)

With regard to the interest of the plaintiffs in

this lawsuit, the original complaint avers that each of

the four individual plaintiffs “is a taxpayer to the

City of Chattanooga, Tennessee and/or Hamilton

County, Tennessee’. The plaintiff, Moccasin Bend

Association, is averred to be a non-profit corporation

having as one of its primary concerns ‘‘the proper

development of Cameron Hill and Moccasin Bend, prom-

inent local historical landmarks’. The complaint then

proceeds to aver that some 15 years ago the Chatta-

nooga Housing Authority acquired certain property in

or adjacent to the downtown commercial area of Chatta-

at A LATICES I 8 . ——

Rs eh OE A re re Re GV oP ematesuen te

° -

ee ee ST

nooga in the course of an urban renewal project known

as the ‘Golden Gateway Urban Renewal Project’.

Included within the property acquired was Cameron

Hill, which in turn included a previously existing mu-

nicipal park known as ‘“‘Boynton Park’. It is further

averred that in December of 1973 the defendant,

Chattanooga Housing Authority, effected a sale of the

Cameron Hill tract to the defendant, Cameron-Oxford

Associates, a limited partnership, upon the commitment

of the latter to erect an apartment complex on the

tract. Various irregularities are alleged on the part of

the Chattanooga Housing Authority in planning for the

use of the Cameron Hill tract and in effecting a sale

of that tract, including (a) failure to permit adequate

public participation in planning for the use of the

tract, (b) failure to achieve the most beneficial use of

the tract, (c) failure to re-establish an adequate re-

placement for Boynton Park, (d) failure to follow open

competitive bidding in effecting a sale of the tract,

(e) failure to obtain an adequate price for the tract,

(f) failure to require disclosure of the true identity

of the purchaser-developer, (g) improperly permitting

delays on the part of the purchaser-developer in sub-

mitting a firm proposal and in initiating improvements,

and (h) failure to give adequate public notice of the

various activities hereinabove referred to. The co-

defendants are alleged to have participated in one man-

ner or another in the foregoing improper activities of

the Chattanooga Housing Authority.

The defendants, both by motion and in their an-

swers, deny standing upon the part of the plaintiffs

to maintain this lawsuit.

In connection with the evidentiary hearing upon the

plaintiffs’ motion for a temporary injunction, the fol-

lowing facts having reference to the issue of standing

were made to appear. The plaintiff, Donald Wamp,

owns property within Chattanooga and is accordingly

a taxpayer of that city. He is an architect by pro-

fession. His only interest in the subject matter of the

lawsuit is derived from his status as a municipal

taxpayer and a resident architect. The plaintiffs,

Mark K. Wilson, Jr. and Carl Gibson, were not identi-

fied in the evidentiary hearing, their interest in the law-

suit having been described in the complaint as tax-

payers of ‘“‘Chattanooga and/or Hamilton County, Ten-

nessee’’. The plaintiff, Sherman L. Paul, is a non-

resident of Chattanooga, but is « resident of Hamilton

County, residing on Signal Mountain, Tennessee. He

is a former county tax assessor and is President of

the Moccasin Bend Association. His interest in the

lawsuit is derived from his status as a taxpayer of

Hamilton County and his position as President of

the Moccasin Bend Association. The plaintiff, the

Moccasin Bend Association, is a non-profit corporation

having as one of its purposes the preservation and

enhancement of historic and scenic landmarks in the

Chattanooga Area, including Cameron Hill. The re-

establishment of Boynton Park on Cameron Hill in a

manner deemed adequate is an area of particular in-

terest to the association and its members.

Suffice it to say in summary, the interest of each

individual plaintiff is that of a civic minded taxpayer

of the city or county wherein Cameron Hill is located.

The interest of the corporate plaintiff is that of an

association concerned with the preservation of local

scenic and historic landmarks. Neither plaintiff asserts

any ownership in Cameron Hill or any economic or

financial interest in its disposition other than as tax-

payers or, in the case of Moccasin Bend Association,

as a Civic improvement organization. Nor do they claim

any special injury to themselves, different from that

which might be asserted by any civic minded taxpayer

or by any association concerned with the preserva-

tion and enhancement of local areas having scenic and

historic attributes.

The rule in Tennessee is well established that

citizens and taxpayers are without standing to maintain

a lawsuit to restrain or direct governmental action

unless they first allege and establish that they will

suffer some special injury not common to citizens and

taxpayers generally. Patton v. City of Chattanooga,

108 Tenn. 197, 65 S.W. 414 (1901). The reasons for

the rule, as given in the Patton case, were variously

stated to be that ‘Courts do not sit to declare ab-

stract propositions of law’’ and that, ‘“‘in matters com-

mon to all citizens, the law confers upon the duly

elected representatives of the people the sole right to

appeal to the courts for redress’’ and that “if the

cities could not exercise public powers, even errone-

ously or unwisely, when lawfully done by their consti-

tuted legislative authority, without the concurrence of

every citizen or taxpayer, it would be impossible to

have municipal governments. . ."" In the rather recent

case of Badgett v. Rogers, 222 Tenn. 374, 436 S.W.2d

292 (1968), the Tennessee Supreme Court stated the rule

to be as follows:

“As a general rule of long standing in Tennessee,

individual citizens and taxpayers may not interfere

with, restrain or direct official acts, when such

citizens fail to allege and prove damages or in-

juries to themselves different in character or kind

from those sustained by the public at large.”

The plaintiffs contend, however, that the allegations

and facts in the present case bring them within an

exception to the general rule, that exception being

that a taxpayer may sue without averring or estab-

lishing any special injury where an illegal use of public

funds is involved. The exception relied upon by the

plaintiffs is stated as follows in Badgett v. Rogers,

supra, 456 S.W.2d 292 at 294:

‘However the courts have recognized an exception

to the general rule where it is asserted that the

assessment or levy of a tax is illegal or that

public funds are misused or unlawfully diverted

from stated purposes.”

Having thus stated the exception, it should be noted

that the Court in the Badgett case nevertheless dis-

allowed an action wherein a taxpayer sought to attack

the legality of an expense allotment to a mayor, the

expense allotment being in addition to his salary. The

disallowance was predicated upon the conclusion that

the taxpayer had made insufficient allegations of fact

regarding the illegality of the expense allotment.

Under the allegations of the complaint, as well

as under the facts as hereinabove found by the Court,

it would appear that the plaintiffs were without stand-

ing to maintain this lawsuit in the Chancery Court of

the State of Tennessee wherein it was originally filed.

There is no contention made or evidence submitted

that the plaintiffs, by reason of the matters complained

of, have sustained any special injury or any injury

other than that common to all civic minded taxpayers.

In fact, the plaintiff, Moccasin Bend Association, does

not even assert the status of a taxpayer. With regard

to the contention of the individual piaintiff-taxpayers

that they come within the exception announced in

Badgett v. Rogers, supra, affording standing to a

taxpayer to litigate an alleged misuse of public funds,

there are two difficulties. The first is that the excep-

tion stated in the Badgett case refers only to the mis-

use of public funds, not to the misuse of public prop-

erty. The present case involves the alleged misman-

agement of property in an urban renewal project. Each

case cited in the Badgett case in support of the ex-

ception therein stated pertains to the levying of an

unlawful tax or the unlawful expenditure of public

funds. The plaintiffs have cited no Tennessee case and

the Court has been unable to find one wherein the

courts of Tennessee have allowed a taxpayer claiming no

special injury to maintain a suit for mismanagement

of public property.

In the second place, while the complaint avers

many irregularities upon the part of the Chattanooga

Housing Authority in the disposition of the Cameron

Hill tract and the evidence reflects that a number of

unusual, if not questionable, practices were followed by

that agency in the negotiation and awarding of a con-

tract disposing of the Cameron Hill tract, the Court,

with but one possible exception, is unable to find any

specific instance of illegal conduct on the part of the

Chattanooga Housing Authority or any other defendant

with regard to that disposition. Rather, each action

appears to have been within the legislative or adminis-

trative authority or discretion of the various agencies

and defendants involved.

The only statutory provisions cited to the Court

and contended to have been violated under the allega-

tions of the complaint as filed in the state court were

the provisions of section 1455(a)(ii) of Title 42 U.S.C.

and T.C.A. § 13-821, wherein the agencies responsible

Al0

for urban renewal projects were required to ‘afford

maximum opportunity’’ to private enterprise to effect re-

development, and the provisions of section 1455(e)(1)

of Title 42 U.S.C. wherein the local agency in charge of

an urban renewal project is required, as a condition

precedent to the awarding of a contract, to make public

disclosure of “‘the name of the redeveloper . . . its of-

ficers and principal members, shareholders and inves-

tors, and other interested parties’’. There is no evi-

dence of a violation of section 1455(a)(ii) or T.C.A.

§ 13-821. The Chattanooga Housing Authority does

appear to have entered into a contract with a developer,

Cameron-Oxford Associates, a limited partnership listing

a trustee as the limited partner having a 95% part-

nership interest, but without making or requiring any

public disclosure of equitable owners or beneficiaries of

the trust. Whether this omission would constitute a

sufficiently substantial failure on the part of the Chat-

tanooga Housing Authority to constitute a statutory

violation or whether such a violation would render any

contract thereafter entered into void or voidable at the

instance of the Chattanooga Housing Authority, the

H.U.D., the F.H.A., or the United States attorney act-

ing under his general authority, the Court does not here

decide. Suffice it to say that such illegality, if in fact

it be an illegality, affords no standing under Tennessee

law to a taxpayer suffering no special injury therefrom

to litigate the issue.

With regard to agency guidelines, a Chattanooga

Housing Authority guideline alleged to have been vio-

lated was one providing that urban renewal tracts

should be disposed of “under open competitive condi-

tions”. The evidence is undisputed that Chattanooga

Housing Authority did solicit bids under ‘open com-

petitive conditions’, but, receiving only one bid, there-

All

upon proceeded to engage in extensive, prolonged and

private negotiations with the bidder, its successors and

assigns, for the disposition of the Cameron Hill tract.

Such action on the part of a public agency dealing with

public property was, in the Court’s opinion, most inap-

propriate. It does not appear to have been in viola-

tion of any law.

Another agency guideline alleged to have been vio-

lated was the requirement that urban renewal tracts be

disposed of for ‘fair value’’ and “in a fair and equitable

manner’. H.U.D. having approved the sale here un-

der attack, both the generality of the guidelines and

the nature of the evidence provide no basis for the sub-

stitution of judicial discretion in lieu of agency discre-

tion as to whether the disposition was effected in a ‘‘fair

and equitable manner” or as to what may have been a

‘fair value’ for the property under the limitations and

conditions of the sale.

It is the further insistence of the plaintiffs that the

defendants, and in particular the Chattanooga Housing

Authority, acted illegally in failing to re-establish a park

of adequate size and appropriate location on Cameron

Hill to replace the former Boynton Park. The plain-

tiffs’ contention in this regard appears to be that the

title of Chattanooga Housing Authority to the Cameron

Hill tract was impressed with a trust to this effect.

The evidence fails to reflect, however, that the Chat-

tanooga Housing Authority held title to the Cameron

Hill tract subject to any such equitable encumbrance or

duty. Rather, it appears that the Chattanooga Housing

Authority acquired clear title to the entire Cameron

Hill tract some 15 years ago, including the former mu-

nicipal park located thereon. Cameron Hill has re-

mained undeveloped and unused since its acquisition by

the Chattanooga Housing Authority. In fact, some 10

Al2

or 12 years ago the entire top portion of the hill was

removed to acquire fill material for a highway project.

At that time litigation was initiated by citizens and tax-

payers against the Chattanooga Housing Authority in

an effort to prevent the dispoilation of the hill and to

preserve the Boynton Park area. The litigation resulted

in an adjudication by the Tennessee Supreme Court that

“the bill fails to show any proposed illegal action of the

Housing Authority’’ and “these complainants are en-

titled to no rights in Boynton Park other than those

common to all citizens of Chattanooga’. See Mrs. Sim

Perry Long, et al. v. Chattanooga Housing Authority,

et al. (unpublished opinion entered November 9, 1962).

The Court is of the opinion that no genuine issue

of fact exists but that the plaintiffs were without stand-

ing to maintain this lawsuit in the Chancery Court of

Hamilton County, Tennessee, wherein it was originally

filed and wherein it was pending at the time of removal

to this court. The plaintiffs being without standing to

maintain the lawsuit, the Tennessee Chancery Court was

without jurisdiction to entertain the lawsuit. The state

court being without jurisdiction, this Court is, by

derivation, likewise without jurisdiction. The lawsuit

must accordingly be dismissed.

In view of the conclusion herein reached, it becomes

unnecessary and inappropriate to consider the further

contentions and motions in the case, including the con-

tentions of the parties with regard to the plaintiffs’

standing or lack of standing under the federai law, and

including the plaintiffs’ motions to amend their com-

plaint and for a temporary injunction.

An order will enter dismissing this lawsuit for lack

of jurisdiction.

/s/ Frank W. Wilson

United States District Judge

Al3

IN THE UNITED STATES DISTRICT COURT FOR

THE EASTERN DISTRICT OF TENNESSEE,

SOUTHERN DIVISION

CIV-1-74-41

DONALD L. WAMP; MARK K. WILSON, JR.; CARL

L. GIBSON; SHERMAN L. PAUL; and MOCCASIN

BEND ASSOCIATION, a Tennessee non-profit

corporation,

Plaintiffs

-VS.-

CHATTANOOGA HOUSING AUTHORITY, a Tennes-

see corporation; CITY OF CHATTANOOGA, TEN.-

NESSEE, a municipal corporation; CAMERON-OXFORD

ASSOCIATES, an Indiana limited partnership; AD-

VANCE MORTGAGE CORPORATION, a_ Delaware

corporation; MILLIGAN-REYNOLDS GUARANTY TI-

TLE AGENCY, INC., a Tennessee corporation; THE

UNITED STATES OF AMERICA, ex rel the UNITED

STATES DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT and also ex rel the FEDERAL

HOUSING ADMINISTRATION,

Defendants

JUDGMENT OF DISMISSAL

(Filed September 19, 1974)

This is an action in which the plaintiffs seek in-

junctive relief with reference to a tract of land within

an urban renewal project. The case is presently before

the Court upon various motions, including motions by

Al4

the defendants for summary judgment. For the rea-

sons set forth in an opinion filed herein, it is the judg-

ment of the Court that the case should be dismissed

for lack of jurisdiction.

It is accordingly ORDERED that the defendants’

motion for summary judgment be sustained and that

the lawsuit be and the same is hereby dismissed for

lack of jurisdiction.

APPROVED FOR ENTRY.

/s/ Frank W. Wilson

United States District Judge

Al5

No. 75-1192

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

DonaLp L. Wamp, ET AL.,

Plaintiffs-Appellants,

Vv.

CHATTANOOGA Housinc AUTHORITY, ET AL.,

Defendants-Appellees.

AppEAL from the United States District Court for

the Eastern District of Tennessee.

Decided and Filed December 5, 1975.

Before: Puiturs, Chief Judge, and Prcx and

Mutter, Circuit Judges.

Per Curiam. This action was filed to enjoin the

construction of an apartment complex on Cameron Hill,

a local landmark in Chattanooga, Tennessee, where

municipally owned Boynton Park formerly was located.

The suit was initiated in the State Chancery Court and

was removed by the defendant to the United States

District Court.

In an opinion published at 384 F.Supp. 251 (E.D.

Tenn. 1974), Chief District Judge Frank W. Wilson

held that the plaintiffs did not have standing under

Tennessee law to maintain the suit in Tennessee Chan-

Al6

cery Court and that the District Court therefore had

no removal jurisdiction. Accordingly, the action was

dismissed. Plaintiffs appeal. Reference is made to

the reported decision of the District Court for a recita-

tion of the pertinent facts.

Appellants contend that the District Court incor-

rectly construed the relevant Tennessee decisions and,

therefore, they have standing to sue under Tennessee

state iaw. We hold that the District Court correctly

construed and applied the controlling decisions of the

Supreme Court of Tennessee. Sachs v. County Elec-

tion Commission, 525 S.W.2d 672, 673 (Tenn. 1975);

Bennett v. Stutts, 521 S.W.2d 575, 576 (Tenn. 1975);

Badgett v. Rogers, 436 S.W.2d 292, 294 (Tenn. 1968);

Patton v. City of Chattanooga, 108 Tenn. 197, 65 S.W.

414 (1901).

The Supreme Court of Tennessee ruled to the same

effect in its decision in another case involving the

Cameron Hill area in Chattanooga. In an action filed

in Chancery Court, a group of interested citizens and

taxpayers sought to enjoin the Chattanooga Housing

Authority and the City of Chattanooga from altering

or changing the natural contours or topography of

Boynton Park and abolishing it as a public park. In

an unpublished decision announced November 9, 1962,

the Supreme Court of Tennessee said:

Second, these complainants are entitled to no

rights in Boynton Park other than those common

to all citizens of Chattanooga.

Tennessee decisions holding as above stated

are legion. It is said that the leading case is

Patton v. Chattanooga, 108 Tenn. 197.

It is further asserted by appellants that, even if

the District Court was correct in its interpretation of

Al7

Tennessee law, they have standing as a matter of fed-

eral law. We agree with the District Court that if

appellants had no standing to maintain the action in

the State court, the District Court had no removal

jurisdiction. '

In Lambert Co. v. Baltimore & Ohio R.R. Co.,

258 U.S. 377, 382 (1922), the Supreme Court, speak-

ing through Mr. Justice Brandeis, said:

The jurisdiction of the federal court on re-

moval is, in a limited sense, a derivative jurisdic-

tion. If the state court lacks jurisdiction of the

subject-matter or of the parties, the federal court

acquires none, although it might in a like suit

originally brought there have had jurisdiction.

Lambert was followed and applied in this court in

Bancohio v. Fox, 516 F.2d 29 (6th Cir. 1975), in which

numerous other decisions are cited to the same effect.

See also Friedr. Zoellner Corp. v. Tex. Metals Co.,

396 F.2d 300, 301 (2d Cir. 1968).

The decision of the District Court is affirmed.

Costs on this appeal are taxed against appellants.

1. Even if federal standing decisions were applicable, appel-

lants would be met by the decisions of this court in Gibson & Perin

Co. v. City of Cincinnati, 480 F.2d 936 (6th Cir. 1973), cert. denied,

414 U.S. 1068 (1973); and South Hill Neighborhood Association v.

Romney, 421 F.2d 454 (6th Cir. 1969), cert. denied, 397 U.S. 1025

(1970).

Al8

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 75-1192

DONALD L. WAMP, ET AL.,

Plaintiffs-Appellants,

Vv.

CHATTANOOGA HOUSING AUTHORITY, ET AL.,

Defendants-Appellees.

Before: PHILLIPS, Chief Judge, and PECK and

MILLER, Circuit Judges.

JUDGMENT

(Filed December 5, 1975)

APPEAL from the United States District Court

for the Eastern District of Tennessee.

THIS CAUSE came on to be heard on the record

from the United States District Court for the Eastern

District of Tennessee and was argued by counsel.

ON CONSIDERATION WHEREOF, It is now

here ordered and adjudged by this Court that the judg-

ment of the said District Court in this cause be and

the same is hereby affirmed.

It is further ordered that Defendants-Appellees re-

cover from Plaintiffs-Appellants the costs on appeal,

Al9

as itemized below, and that execution therefor issue

out of said District Court if necessary.

Entered by Order of the Court.

/s/ John P. Hehman

Clerk

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.