United States v. Taylor's Oak Ridge Corp., Civ. No. 1387.

• Citation: 89 F. Supp. 28
• Decision Date: 23 February 1950
• Docket Number: Civ. No. 1387.
• Parties: UNITED STATES v. TAYLOR'S OAK RIDGE CORPORATION.
• Court: U.S. District Court — Eastern District of Tennessee

89 F. Supp. 28

UNITED STATES v. TAYLOR'S OAK RIDGE CORPORATION.

Civ. No. 1387.

United States District Court E. D. Tennessee, N. D.

February 23, 1950.

Otto T. Ault, United States Attorney, Chattanooga, Tenn., Ferdinand Powell, Jr., Assistant United States Attorney, Knoxville, Tenn., for plaintiff.

William Waller (of Armistead, Waller, Davis & Lansden), and Tom Stewart, Nashville, Tenn., for defendant.

ROBERT L. TAYLOR, District Judge.

Suit was commenced by plaintiff to enjoin defendant from continuing an allegedly unlawful possession of certain department store facilities located at Oak Ridge, Tennessee, and to recover a balance of compensation due for the use of certain chattels and damages for unlawful retention of possession of the realty. Defenses urged are prematurity of suit, lack of jurisdiction of the subject matter, improper choice of remedy, and denial of illegal or wrongful possession.

Defendant entered into possession of the realty pursuant to a written contract executed July 9, 1946, which, after extensions, expired by its terms January 31, 1950. It provided that within 15 days after expiration, the defendant should have removed its merchandise from Oak Ridge. Defendant has insisted that the contract was one of lease, hence subject to the State law of landlord and tenant, but the instrument describes itself as a concession agreement and the defendant as a concessionaire, and the control over the business of the concessionaire and rights of entry and inspection retained by the owner of the realty are so extensive as to negative any notion that a lease of the realty was intended or effected.

In the recent case of United States v. Hodge et al., Civil Action No. 1130, 89 F.Supp. 25, this Court held that the law relating to eviction of a lessee had no application, the occupancy in that case being under a license no different in principle from the concession agreement under which defendant has held, and still retains, occupancy. Defendant's insistence that an action under State law for eviction of a hold-over tenant was the proper procedure is, therefore, rejected.

Lack of jurisdiction of the subject matter has been urged on the ground that at the time the complaint was filed here, an injunction suit was pending in a State court. Before expiration of defendant's concession, Roane-Anderson Company, the contract-agent of plaintiff at Oak Ridge, notified defendant that its concession would not be further extended, but that bids for a lease would be invited from firms engaged in mercantile businesses. About 500 firms were invited to submit bids, and six of them responded. The proposal of Loveman's of Chattanooga, Tennessee, was recommended by Roane-Anderson Company as the most acceptable, and the recommendation was approved by the Atomic Energy Commission, the Government agency which has control of the properties at Oak Ridge. Considering that its proposal should have been accepted, defendant on January 25, 1950, filed suit in the Chancery Court of Anderson county, Tennessee, to enjoin Roane-Anderson Company from disturbing its possession of the facilities covered by the concession agreement. A temporary restraining order was granted by the State court and a time set for hearing on motion to dissolve the order.

While the suit was pending there, the Government filed its complaint here. The Government's suit was commenced February 6, 1950, after expiration of the term of the concession, but before expiration of the grace period of 15 days following termination of the concession. The suit here sought to enjoin defendant from continuing its occupancy. On February 10, 1950, this Court entered an order directing defendant to show cause on February 20, 1950, why plaintiff should not be granted a restraining order. At the hearing February 20 plaintiff, before presenting its proof, was allowed to amend its complaint by praying for an order restraining defendant from proceeding in the State Court suit. Over objections as to relevancy defendant was allowed to present extensive proof respecting the merits of its case. That proof in the main had for its purpose a showing that defendant submitted the best proposal in response to the invitation to bid and that its nonacceptance was due to arbitrariness and capriciousness on the part of Roane-Anderson Company.

Counsel for defendant in essence, if not in fact, conceded at the hearing that the Court has jurisdiction to proceed, the pendency of the suit in the State court notwithstanding. Otherwise the Court would be, and is, of the opinion that it has that jurisdiction. There is no conflict between sovereignties. The State of Tennessee is not a party litigant. Nor is it a party in interest. No police power of the State is drawn into question, and no statute of the State is infringed. No question of title is involved, hence the land laws of the State are neither invoked nor sought to be by-passed. That the State of Tennessee has not granted the land to the United States by an act of cession, if such is the case, is not a reservation to private individuals or corporations of a right to ignore or usurp the interest which the United States has acquired, in this case the fee-simple title and its attendant right of possession.

It cannot well be said that the suit here was premature, when defendant had already thrown down the challenge in the State court. Defendant's concession ended by its terms January 31, 1950. Its period of grace was to be used for removal of defendant's merchandise from Oak Ridge. Use of the period to defeat the necessity of removal was inconsistent with the idea of grace and in the Court's opinion was such a breach of conditions as freed the Government's hands to bring suit at once.

As to whether defendant's bid should have been accepted in preference to others is not a subject for judicial review, the decision therein being an exercise of administrative functions of the Atomic Energy Commission. While the Court has not been referred to any statute which excludes the matter from judicial review, this Court over a period of several years has...