U.S. District Court Magistrate Judge W. Leon Barfield wrote that the lawsuit filed by the Association for Fair Government and three local business owners against the city and director Geri Sams should be tried on its merits.
The lawsuit alleges the city's purchasing practices are unfair to some and that rules and requirements are ignored for others.
The city has denied the allegations and challenged the plaintiffs' right to bring suit.
The city's law department didn't answer the lawsuit, however, until two days after the court's deadline for doing so, a delay that prompted plaintiffs' attorney Robert Mullins to file a motion for default.
"... An answer to the complaint was not timely filed ... because of an inadvertent failure of Mayor (Deke) Copenhaver to forward a copy of the complaint to the Law Department," the judge quoted from the city's belated answer.
"The reason for the failure to timely file an answer on behalf of defendant Sams is less clear, as general counsel for the law department avers that she was aware that Ms. Sams had been served with the complaint," the judge noted.
General Counsel Chiquita Johnson wrote in an affidavit to the court that she was instructed on Feb. 19 to take over the city's defense to the lawsuit.
In denying the default action -- which could have cost the city the case, Judge Barfield wrote that federal courts have a lenient standard when it comes to accepting reasons for defendants who miss the deadline to answer lawsuits and avoid default.
He wrote that there was no evidence the city intentionally ignored the deadline or exhibited a pattern of disregard for court rules, and that the plaintiffs have not shown any prejudice they would suffer if not granted a default judgment.
"Lastly, a lawsuit of this magnitude and import should be decided on the merits, not a procedural machination," he wrote.
Judge Barfield chided the plaintiffs' attorney for not telling the city attorneys they were in danger of default, and for seeking permission to depose the mayor and former city attorney before trying to resolve the issue without court intervention.
With the issue of a default judgment settled, the case will proceed, court officials said.
Normal procedures in such cases usually include the exchange of questions and answers between the parties, motion hearings to set the scope of admissible evidence, requests from the defense for summary judgment or dismissal, settlement negotiations and trial.
The judge typically works with the attorneys on both sides to set deadlines for these steps. No specific timelines have been announced.
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