# Petition — Wamp v. Chattanooga Housing Authority

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1976
- **Citation:** 425 U.S. 992

## Text

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

IV

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

2

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

3

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?

5

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

6

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

7

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).

8

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-

9

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-

10

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-

11

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).

12

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

13

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

14

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

15

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-

16

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-

17

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

18

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

19

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
I

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

z0

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

21

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

22

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.

23

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

24

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-

25

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

26

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.

27

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

28

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

29

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-

30

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

31

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.

II

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,

32

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

33

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,

34

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

a

-_-~

35

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 :

——

ll

36

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

Al

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-

A2

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

A3

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

A4

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

A5

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-

a

A6

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,

A7

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.”

ee

A8

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

Ag

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

ee

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

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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).

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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,

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1808%3A1. Public record. Not legal advice.