Smith v. Holiday Inns of America, Inc.

• Decision Date: 30 July 1963
• Docket Number: Civ. A. No. 3409.
• Parties: Vasco A. SMITH, Jr., Plaintiff, v. HOLIDAY INNS OF AMERICA, INC. and James Dew, Defendants.
• Court: U.S. District Court — Middle District of Tennessee

220 F. Supp. 1

Vasco A. SMITH, Jr., Plaintiff, v. HOLIDAY INNS OF AMERICA, INC. and James Dew, Defendants.

Civ. A. No. 3409.

United States District Court M. D. Tennessee, Nashville Division.

July 30, 1963.

Avon N. Williams, Jr., and Z. Alexander Looby, of Looby & Williams, Nashville, Tenn., A. W. Willis, Jr., Memphis, Tenn., and Jack Greenberg, Constance Baker Motley and Frank H. Heffron, New York City, for plaintiff.

William Waller, Jr., of Waller Lansden & Dortch, Nashville, Tenn., and John Dunlap, Memphis, Tenn., for defendants.

WILLIAM E. MILLER, Chief Judge.

This is a class action brought by the plaintiff on behalf of himself and all other Negroes who are similarly situated for declaratory and injunctive relief restraining the defendants from continuing their policy, practice and custom of refusing to accept Negroes as guests at the Holiday Inn-Capitol Hill motel located on James Robertson Parkway in Nashville, Tennessee.

The defendant, Holiday Inns of America, Inc., a Tennessee corporation with its principal place of business in Memphis, Tennessee, is the owner and operator of the motel. The defendant, James Dew, is the manager of the motel and is an employee of the corporation.

On December 4, 1962, plaintiff, through one Carroll Barber, reserved a room at the motel for December 5, 1962. At about 12:30 P.M. on December 5th, plaintiff, accompanied by Barber, entered the motel and informed the desk clerk that he had a reservation. The clerk informed plaintiff that no rooms were available. In answer to plaintiff's inquiry, the clerk stated that it was the management's policy not to serve Negroes. Thereupon, plaintiff and Barber left. A few minutes later a white man, Reverend Robert C. Palmer, entered the motel and, upon inquiry, was informed by the clerk that single rooms were available.¹

In the present action plaintiff seeks (a) a declaratory judgment that defendants are required by the Fifth and Fourteenth Amendments of the Constitution of the United States to offer accommodations at Holiday Inn-Capitol Hill to plaintiff and other Negroes on the same terms and conditions as they are offered to white persons, (b) a permanent injunction enjoining defendants from denying to plaintiff and other Negroes similarly situated the right to purchase and enjoy accommodations offered at Holiday Inn-Capitol Hill upon the same terms and conditions as are applicable to white persons, and (c) such other relief as may appear to the Court to be equitable. Jurisdiction is properly invoked under 28 U.S.C. § 1343 (3), and 42 U.S.C. §§ 1981, 1982 and 1983.

Holiday Inn-Capitol Hill, hereinafter referred to as the "motel," is located in the Capitol Hill Redevelopment Project, an urban redevelopment project administered by the Nashville Housing Authority and effectuated through the cooperation of other state, federal and local governmental agencies. Lands for the project were acquired by the Housing Authority by direct purchase and by condemnation under its power of eminent domain. Pursuant to the redevelopment plan, the Housing Authority cleared the land, constructed streets and thoroughfares, installed street lights, water mains and other utilities, and completed an elaborate plan of landscaping. Thereafter, in further pursuance of the redevelopment plan, certain parcels, including those upon which the motel now stands, were conveyed to private interests by warranty deeds, but for specific uses and under conditions specified in the conveyances which the Housing Authority determined to be consistent with the redevelopment plan and its purposes, and subject to certain recorded covenants running with the land.

Plaintiff's position is that the motel is the product of indispensable federal, state and local governmental action, as well as private action, and that the several forms of governmental participation and involvement bring the defendants' activities within the reach of the Fifth and Fourteenth Amendments to the Federal Constitution.

Defendants contend, on the other hand, that the corporate defendant purchased the land in an arm's length transaction and at its full market value; that it erected the building with its own funds and at no cost to the public; that it pays normal ad valorem and other taxes; that the state has no interest in the property and no voice in its management, operation and control; that there is no "state action" involved; and, hence, that their private conduct in the choice of customers is not affected or controlled by the Fifth or Fourteenth Amendments. More specifically, their theory is that all state involvement ended with the execution of the deeds transferring title to Holiday Inns of America, Inc. and the construction of the building in accordance with the specifications and conditions set out in the contract of sale.

If title to the property had in fact been transferred without condition, reservation or restriction, defendants' theory would present the narrow issue whether the city's prior ownership and development of the property constituted state action of sufficient scope and degree to subject successor owners and users to the mandates of the Fifth and Fourteenth Amendments. Such, however, is not the case here. For the Housing Authority, by virtue of the contract of sale, the deeds, and the recorded restrictive covenants running with the land, has retained substantial interests in and controls over present and future uses of the property in order to effectuate and preserve the public purposes for which it was acquired. Those interests and controls, specifically reserved in order to enable the Housing Authority to achieve the objectives of the redevelopment plan, are couched in such broad and imprecise terms that their true significance can be evaluated only from the history of the Project, its purposes, and the methods by which it was carried to fruition.

The Nashville Housing Authority is a public body corporate and politic created pursuant to the provisions of The Housing Authorities Law (Chapter 20, Public Acts of Tennessee, 1935, First Extraordinary Session, as amended; T. C.A. § 13-801 et seq. and § 13-901 et seq.), under which it is vested with full authority to accomplish the purposes and objectives of the law. Among other things, it is authorized (1) to acquire, by eminent domain or otherwise, property in slums and blighted areas which are detrimental to the safety, health, morals, or welfare of the community, (2) to clear the areas acquired and install, construct, or reconstruct streets, utilities, and site improvements essential to the preparation of sites for uses in accordance with a redevelopment plan approved by the governing body of the municipality in which the areas are situated, and (3) to sell or lease land so acquired and improved for uses in accordance with the redevelopment plan.

Prior to the Capitol Hill Redevelopment Project, the Tennessee State Capitol was adjoined on several sides by large slum areas which had an unwholesome effect upon the entire community and which provided an unsuitable and unsightly setting for the State Capitol. Because of these conditions, the Nashville Housing Authority, in conjunction with the Planning Commission of the City of Nashville, sponsored extensive studies by engineers, surveyors, and appraisers preparatory to the formulation of a redevelopment plan of slum clearance and urban redevelopment. The cost of this planning exceeded $140,000.00, reimbursement for which was eventually provided by the United States through the Housing and Home Finance Agency.

Pursuant to the provisions of Resolution 50-1237 adopted by the City Council on June 26, 1950, the City of Nashville, acting by and through its Mayor and City Clerk, executed a Corporation Agreement with the Housing Authority wherein the City agreed to provide and finance all local grants-in-aid for such a project to the extent and in the manner required by Title I of the Housing Act of 1949 (63 Stat. 413), and to pay one-third of the net cost thereof.

On April 7, 1952, the Board of Commissioners of the Nashville Housing Authority, by Resolution 61-52, found and determined that the Capitol Hill area was a blighted area as defined by Chapter 114 of the Public Acts of Tennessee of 1945, that the slum and blighted conditions existing therein were detrimental to the safety, health, morals and welfare of the community, that the area should be acquired and such conditions eliminated, and that a redevelopment plan should be carried out in the public interest. By this resolution, the Housing Authority approved and adopted the Redevelopment Plan for the Capitol Hill Redevelopment Project. On the same day, the Planning Commission for the City of Nashville approved the Redevelopment Plan.

The City Council, as the local governing body of the City of Nashville, after a public hearing held in accordance with law, adopted Resolution 52-471 finding that the slum and blighting conditions existing in the Capitol Hill area were detrimental to the safety, health, morals and welfare of the City and should be eliminated, and approving the Redevelopment Plan as submitted.

The Housing Authority in September 1952 entered into a Loan and Grant Contract with the United States, acting by and through the Housing and Home Finance Agency, in which the United States agreed to provide financial assistance, as provided for in Title I of the Housing Act of 1949, in the form of loans and grants and to pay the remaining two-thirds of the net cost of the Project.

Having obtained the necessary financial commitments and the requisite local approvals, the Housing Authority then proceeded to acquire, by direct purchase and by the exercise of its power of eminent domain, approximately 72 acres of land in the Project area. Upon acquisition of the land, the Housing Authority undertook, in conformity with federal regulations and the Redevelopment Plan, to relocate the 301 families and 196 individuals who...