sionaire, 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. Allan V. Hodge et al., Civil Action No. 1130, 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 non-acceptance 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 a preference to others is not a subject for judicial review, the decision therein being an exercise of administrative function 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 had many occasions to consider whether it should undertake a review of purely administrative procedures of Government agencies. Where there has been no violation of a vested right, this Court has consistently refused to intervene in such administrative affairs. See United States ex rel. T. V. A. v. Moody, 86 F. Supp. 694. This is in accord with the principle of separation of powers between the legislative and judicial branches

of the Government, expressed with considerable frequency in connection with the exercise of the power of eminent domain. United States v. Carmack, 329 U. S. 230; United States ex rel T. V. A. v. Welch, 327 U. S. 546. In some relations the principle has been carried to the extreme limit by statute, as in the administration of Veterans' affairs. 38 U. S. C. A., sec. 705.

Defendant had no vested right to have its bid accepted in preference to others. It offered testimony which tended to show that Roane-Anderson Company had orally promised that defendant would receive preferential treatment as to extension of its concession because of expenditures which defendant undertook to make in adding fixtures and otherwise improving the facilities to be used under the concession agreement. There is marked inconsistency between any promise of that kind and the specific language of the written concession agreement which provided for amortization of those expenditures at the expense of the Government's agent, Roane-Anderson Company. Had there been a promise to give defendant such preferential treatment as to obligate Roane-Anderson Company to recommend acceptance of defendant's bid regardless of comparative merit, there would have been no bona fide reason for inviting bids from other firms, to say nothing of the objection to such an arrangement on grounds of public policy.

A more substantial argument has been advanced in that Roane-Anderson Company allegedly acted arbitrarily and capriciously in rejecting defendant's bid. While this Court has declined to intervene in the administrative decisions of Government agencies, it has not foreclosed itself from doing so, in the event it should appear that an agency has acted arbitrarily and capriciously to the detriment of a party dealing with it. See this Court's opinion in United States ex rel. Dugger v. T. V. A., Civil Action No. 346. In the present case there is no preponderance of evidence that Roane-Anderson Company acted otherwise than fairly and in good faith in accepting a proposal other than that of defendant. Hence no reason exists for a departure from precedents of the Court.

Plaintiff's remedy at law was inadequate. Following acceptance of Loveman's proposal, Roane-Anderson Company and the successful bidder agreed upon the terms of a contract for lease of the facilities under consideration, a provision of which called for delivery of possession to Loveman's on March 1, 1950. By telegram of January 10, 1950, and follow-up letter of January 12, 1950, RoaneAnderson Company notified defendant that Loveman's bid had been accepted and called upon defendant to vacate the premises by February 15, 1950. Instead of vacating, defendant by its original bill in the State court on January 25, 1950, sought and obtained an injunction restraining Roane-Anderson Company from undertaking to oust defendant and from proceeding further to enter into a concession agreement with anyone other than defendant. Had plaintiff followed legal procedure as in cases of eviction, the time lapse would have made impossible the delivery of possession to the successful bidder on March 1, 1950, or within a time even approximating that date. In this situation, plaintiff had no adequate remedy at law but was put to the necessity of summary proceedings.

Propriety of an injunction is clear, despite pendency of the suit in the State court. The rule of comity which has been made into statute (28 U. S. C. A., sec. 2283) is not applicable where the United States is complainant, for the reason that the sovereign is not included within its terms. Dollar Savings Bank v. United States, 86 U. S. 227, 239; United States v. Herron, 87 U. S. 251, 263; Stanley v. Schwalby,' 147 U. S. 508; United States v. Sherwood, 312 U. S. 584, 586, 587. Plaintiff does not seek an injunction aimed directly at the State court, but one which will operate upon defendant, its officers and agents. This relief preserves only a semblance of comity, for it is immaterial whether the injunction stays proceedings in the State court by operating upon an officer of the court or upon a party, the result by either route being to stay the State court proceedings. Oklahoma Packing Co. v. Gas Co., 309 U. S. 4, 9. Nevertheless, the proceedings in the State court should be stayed, though the stay is accomplished indirectly. While the suit in the State court is not expressly a suit against the United States it is, in its results, a suit against the sovereign without its consent. The buildings at Oak Ridge which are included in the subject matter of the suit are owned by the sovereign, the United States of America. A suit adversely affecting the disposition of property owned by the United States, or in which the United States owns an interest, is a suit against the United States. United States v. Alabama, 313 U. S. 274, 282. In that situation the suit in the State court ought not to proceed. United States v. Cain, 72 F. Supp. 897.

Defendant's holding of the property is wrongful, unjustified and illegal. Plaintiff, accordingly, is entitled to an order restraining defendant from continuing its possession of the facilities in suit, or of any part thereof, beyond February 28, 1950, and to an additional order restraining defendant from proceeding with the suit

in the State court. Plaintiff is also entitled to payment from defendant of the sum of $146.97 as compensation for the use of personal property included in the concession up to and including December 31, 1949, and for such additional compensation for said use as has accrued thereafter. The Court in the absence of complete and positive proof makes no present findings of damages and, therefore, awards none in this proceeding, but the right of plaintiff to further assert its claim for damages will be reserved.

Let the necessary writs and orders be prepared.

DEAR MR. BORDEN: We are attaching a copy of a letter which we are forwarding to Senator James E. Murray concerning the department store at Oak Ridge. This information was requested by Senator Murray's office subsequent to the general information on this matter which we forwarded to his office on January 26, 1950.

DEAR SENATOR MURRAY: Mr. W. G. Ragsdale of your staff asked Mr. Edward J. Bloch of this office to furnish the following information concerning the volume of business heretofore done by the department store in Oak Ridge:

Under the above arrangements water and electricity were furnished without cost to the concessionaire. The new lease arrangement will be on the basis of the lessee paying for utilities in addition to basic rent.

The higher volume of business done by Miller's, Inc., is due in part to a higher population in Oak Ridge than there is at present. Miller's was operating the Oak Ridge store during a period when merchandise was difficult to obtain and complete stocking of the Oak Ridge store with similar merchandise as handled in the Miller's Knoxville store was difficult. There were also small stores in the construction camps selling general merchandise during the period in which Miller's was operating. However, during the past two years, the population of Oak Ridge has only dropped about 3,000 (36,000 to 33,000) while Taylor's business volume has declined about one-third.

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In 1946, an attempt was made by the Manhattan Engineer District and the Roane-Anderson Company (management agent) to negotiate a higher return to the Government than was currently being paid by the concessionaire, Miller's, Inc. During the period of negotiation, Miller's, Inc., decided to withdraw from Oak Ridge. We understand that one of the considerations which led Miller's, Inc., to withdraw from Oak Ridge was the fact that postwar truck production had been resumed and they were able to obtain delivery trucks for daily deliveries of merchandise to Oak Ridge from their Knoxville store. There were probably many additional reasons why Miller's took this action of which we are not aware. It is our understanding that at all times relations between Miller's and the negotiating agents of Roane-Anderson Company and the Manhattan Engineer District were of the best.

Any additional information concerning this matter will be furnished at your request.

Sincerely yours,

WALTER J. WILLIAMS,

Director of Production.

UNITED STATES ATOMIC ENERGY COMMISSION,
Washington 25, D. C., January 26, 1950.

In reply refer to:

PCO:CCO

Mr. WILLIAM L. BORDEN,

Executive Director, Joint Committee on Atomic Energy,

Congress of the United States.

DEAR MR. BORDEN: This refers to your letter of January 19, 1950, in which you requested information concerning the recent award of the department-store lease at Oak Ridge to Loveman's of Chattanooga, Tennessee. You requested a fairly detailed report on this particular matter and, in addition, information on the policies and procedures under which leases are awarded to commercial firms at Oak Ridge.

We are enclosing a copy of the policy paper on long-term leases at Oak Ridge, a copy of the memorandum from the Deputy General Manager to the Director of Production reporting approval of this policy by the Commission subject to certain conditions, and a copy of the advertising procedure for commercial leases in effect at Oak Ridge.

The award of a five-year lease with an option to renew for five additional years was made to Loveman's of Chattanooga, Tennessee, on January 10, 1950, to be effective March 1, 1950.

The department store in Oak Ridge has been operated for approximately the last three and one-half years by Taylor's, a wholly owned subsidiary of the Darling Stores Corporation of 370 Seventh Avenue, New York, under a concession agreement. Taylor's original agreement provided for a one-year term with options to renew for two additional years. These options were exercised by Taylor's. Prior to the expiration of the third year on August 31, 1949, Taylor's requested that the rental (6% of gross sales) which they had been paying be reduced. This request was refused as not being in the best interest of the Government and our Oak Ridge Office decided to advertise for proposals on the basis of a long term lease. It was then agreed with Taylor's that their concession agreement would be extended for a period of five months to January 31, 1950. (Taylor's refused an offer of a six months' extension.)

During this interim there was extensive advertising and solicitation by direct letters, telephone calls, and personal interviews to obtain qualified operators. It was made clear to all prospective lessees that a full-scale department-store operation was desired. Six proposals, copies of which are attached to this letter were received. As an aid in analyzing these proposals, representatives of RoaneAnderson Company inspected at least one store operated by each applicant. The Roane-Anderson Company and our Oak Ridge Office considered that the needs of the community for a complete department-store operation as well as estimated financial return to the Government should control the selection of an operator under a long-term lease with no cancellation privileges by the Government.

Mercentile Stores Co., Inc., of New York, and Proffitt's Department Store of Maryville, Tennessee, are well-qualified department-store operators but offered no guaranteed minimum and the percentages of gross offered were too low. Similarly, Taylor's proposal No. 3 contemplated a well-rounded department-store operation but the percentage of gross offered was considerably less than that offered by Loveman's.

Sam Schainberg Dry Goods Company of Memphis, Tennessee, is highly competent in its field. Although offering a fair guaranteed minimum and a good percentage of gross, it was ruled out for the reason that the company is a specialtytype operator (about 15 shops in Tennessee and other Southern States) with no previous experience with respect to a full-scale department-store operation as desired in Oak Ridge. In their Memphis store all departments except two are leased to subtenants. They specialize in the low-price field.

John J. Wender, of LaFollette, Tennessee, offered the highest percentage of gross. He is a well qualified merchant, having several operations in Oak Ridge and neighboring communities but with no experience in full-scale departmentstore operation. He also specializes in the low-price field. In view of his high percentage of gross, his was the only proposal which was considered by the Roane-Anderson Company and our Oak Ridge Office as offering an estimated rental return comparable to Loveman's. He presently subleases Taylor's basement and his business has been steadily declining. It was believed that he might reach but could not reasonably be expected to exceed Taylor's 1949 gross of $844,000. This would produce an estimated rental return comparable to Loveman's estimated rental return. However, the Oak Ridge management felt that the attainment of $844,000 in volume of sales by Wender's should be considered very unlikely.

Taylor's offered three alternative rental agreements depending on the type of service selected. Taylor's present store in Oak Ridge differs considerably from that of Loveman's department store in Chattanooga. Taylor's operates only a small number of departments directly and subleases to other concessionaires about fourteen of the operations within the store. They offer no central charge accounts and no delivery service.

Experience has indicated the volume of business that can be expected of Taylor's present operation. During the past year the volume was $844,000. The management at Oak Ridge considers it reasonable to expect that no higher volume of business would be done by Taylor's unless they were to make considerable change in facilities, merchandise and scope of operations. Therefore, in addition to being inadequate from the standpoint of quality of merchandise and service offered, Taylor's alternative proposals numbered 1 and 2 were not considered as good financially as Loveman's or Wender's proposals. Taylor's alternative proposal number 3 (which is the only one of its alternative proposals comparable to Loveman's on the basis of type of service) indicated that changes would be made in the facilities, type of merchandise, and scope of operations which would result in Taylor's operating a complete department store. of the improvements Tavlor's anticipated making if alternative proposal number 3 were acceptable would be the replacement of many of the sublessees with national operators whose merchandising ability is superior and mark-up lower than that of the existing sublessees.

One

Loveman's, as demonstrated in its Chattanooga store, is experienced in handling quality merchandise and operating the majority of its departments directly with a completely integrated service afforded thereby. Loveman's proposal of 4% of gross on the first $1,000,000, 32% on the second $1,000,000, and 3% on anything in excess is compared to Taylor's alternative proposal number 3 of 22% of gross. Depending on the volume of gross sales, the return to the Government would be:

*Guaranteed minimums contained in proposals. Taylor's guaranteed minimum after three years is $36,000.

**Highest estimated returns based on volume of potential business estimated by representatives of Roane-Anderson Company and the Office of Oak Ridge Operations. On this basis, Taylor's proposal is $32,250 ($36,000 minimum after third year) as compared to Loveman's $48,750. (A survey made by the University of Tennessee has indicated a potential department store business of $2,000,000 in Oak Ridge.)