Eugene OR Sept 15 2018  A federal judge has declined to dismiss a nearly $6 million lawsuit alleging that Eugene city officials used deceptive and illegal tactics to sever ties with a longtime security provider in retaliation for the conduct of an employee who had been highly critical of city leaders.

Lawyers for DePaul Industries, a Portland-based nonprofit group, allege city officials secretly maneuvered to keep the nonprofit from again bidding on a contract it long held to provide unarmed security guards to patrol the Eugene Public Library and 11 city-owned parking garages.

They allege the city’s actions were aimed at retaliating against DePaul for refusing to take action against one of its unarmed security guards, Mark Cosby, who had been seen at an anti-Obama protest during the former president’s visit nearly three years ago in the wake of the deadly Umpqua Community College shootings. Cosby had also publicly criticized Eugene city councilors for the city’s closure of downtown public restrooms.

Cosby separately sued the city. The case was settled earlier this year.

In his 18-page opinion issued late last month, U.S. District Judge Michael McShane said the evidence DePaul presented so far in the lawsuit was strong enough to allow the case to move forward.

“The overriding issue in this case is whether, as alleged, Defendants acted under a scheme of deception or fraud,” McShane wrote in an 18-page opinion. “The legal arguments in Defendants’ motion to dismiss assume implicitly that the Defendants were acting in good faith. At this stage, however, in accepting the allegations of material fact as true and construing them in the light most favorable to (DePaul), Plaintiffs have stated claims upon which relief can be granted (with one exception).”

The claims include violations of the state’s public contracting law, due process, First Amendment retaliation, breach of contract and fraud.

McShane did dismiss a negligence claim but said DePaul could file an amended claim within 30 days.

“We’re pleased with the opinion, and we look forward to proceeding with the case,” said Clifford Davidson, a lawyer representing DePaul.

The city didn’t respond to a request for comment, but in court papers it has denied DePaul’s allegations and any wrongdoing.

In spring 2016, the city sought bidders for a new contract to provide both armed and unarmed security guards at the Hult Center, the Eugene Public Library, the parking lots for both buildings and “other facilities as may be covered by a resulting contract.”

Security guards working for DePaul aren’t certified to carry weapons, so they didn’t put in a bid for the new contract.

The city awarded the contract to Advanced Security Inc. in August 2016 but later amended it to also include the remaining parking garages covered under the existing DePaul agreement. DePaul’s two contracts expired later that year.

DePaul provides temporary staffing, security and packaging jobs for people with disabilities. State law requires all state and local governments to purchase goods and services from so-called Qualified Rehabilitation Facilities, or QRFs, such as DePaul, if listed and meeting the government’s requirements to procure services.

To avoid running afoul of that law, as DePaul was the only QRF listed in Lane County as providing unarmed security guard services, the city created a pretext of wanting armed security guards to disqualify DePaul from the bidding process, their lawyers say.

The city denies this allegation, reiterating in court papers that there are no QRFs in Lane County that could provide the armed security services it was seeking so it had to open up the bidding.

Earlier in 2016, Cosby filed his federal lawsuit against the city.

The lawsuit alleged city officials demanded DePaul Industries take Cosby off the security contract after video and images appeared on television and social media of him holding an “OBAMA GO HOME” sign during the then-president’s visit to Roseburg following the mass shooting at Umpqua Community College.

Cosby also appeared before the the City Council two years ago and criticized the city’s decision to close the portable toilets downtown, prompting homeless people to urinate in the parking garages.

Cosby’s lawsuit was settled in April. The terms of the settlement were unavailable Wednesday.

Cosby’s attorney didn’t return a phone message seeking comment Wednesday. In an appearance before the City Council in July, Cosby lit into the city for its actions, mentioning both lawsuits.

“I don’t take use of the word tyrant lightly. I’m offended. … I think there’s been an egregious failure here,” Cosby said, referring to what he saw as the city’s inaction on homelessness.

DePaul’s attorneys allege that as city officials were moving to renew the DePaul contract in 2016, city lawyers had asked DePaul or its insurer to pay for the city’s defense against Cosby’s lawsuit and indemnify the city against his legal claims. DePaul and its insurer declined, saying it wasn’t responsible for how Cosby uses his personal time.

In retaliation, according to DePaul’s lawyers, city officials added the parking lot security duties under the existing DePaul contract to the contract it was readying to award to Advanced Security for the library, Hult Center and its parking garages.

The city denies the allegation.

The lawsuit started as an adversary proceeding in February 2017 as DePaul Industries filed for Chapter 11 bankruptcy protection. It has since reorganized, and the bankruptcy case has closed.

In addition to the city, the lawsuit names as defendants City Manager Jon Ruiz; Assistant City Attorney Ben Miller; LaVena Nohrenberg, the library’s customer experience manager; Clayton Miller, a city purchasing analyst; and nine other unnamed defendants to be identified later.

DePaul seeks nearly $6 million in compensatory and punitive damages.

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