Manhattan state Supreme Court Justice Thomas Farber turned down a bid from owner James Lomma, mechanic Tibor Varganyi and Lomma's companies to get the case dismissed. Farber didn't immediately issue a written ruling outlining his reasoning.
With that, the case - the most serious legal fallout from the May 2008 collapse on Manhattan's Upper East Side - is headed for a trial this spring or summer.
Prosecutors say Lomma and Varganyi arranged for a cheap welding job to repair a critical component of a 200-foot-tall crane, hiring a little-known company over the Internet to do the work and failing to follow rules intended to ensure the repair was sound - even after the firm they hired warned that it wasn't confident about the weld.
The weld failed after a month of use, sending pieces of the massive rig crashing into an apartment building, investigators found. Crane operator Donald C. Leo, 30, and fellow worker Ramadan Kurtaj, 27, were killed; a third construction worker, Simeon Alexis, was seriously hurt.
The defendants have pleaded not guilty in what the companies' lawyer has called an accident, not a crime.
The slain men's families have sued Lomma and others over the collapse. The relatives are watching the criminal case closely, and Leo's mother, Maria, made it clear in a December letter to the court that she wasn't happy with what she'd seen.
"Will they ever be forced to face the consequences of their actions?" she wrote, noting that Lomma and Varganyi have been excused from having to attend some court appearances. Lomma is free on $100,000 bail, Varganyi without bail.
"We implore you to exercise all your judicial powers to hold these men accountable," Maria Leo wrote.
With the mother, her surviving son, Shawn, and lawyers for their family and Kurtaj's in the audience, Farber told them he recognized their grief but noted that his role was to remain impartial.
"I know this must be hard," he said, but "at this point in the proceeding, it is not helpful for me to receive correspondence directly from anyone.
"I'm sorry if that sounds insensitive," he added, noting that if there is a conviction, the families would have the opportunity to express themselves at a sentencing.
Leaving court, Maria Leo, 51, said she felt the case had taken "a step in the right direction" and thanked the judge for acknowledging the families' presence.
Varganyi's lawyer, Matthew Brief, declined to comment after court Tuesday, as did prosecutors. Lawyers for Lomma and his companies, New York Crane & Equipment Corp. and J.F. Lomma Inc., left court without speaking to a reporter and didn't immediately return calls afterward.
The companies' lawyer, Paul Shechtman, had said in a court filing that the men took the welding job to a company that held itself out as qualified to do the work, three different companies later tested it and city inspectors approved it.
"On these facts, it is inconceivable that Mr. Lomma and therefore the corporate defendants could be found so blameworthy as to warrant criminal punishment," Shechtman wrote in a filing last May.
If convicted, Lomma, 65, and Varganyi, 64, face up to 15 years in prison. They're due back in court May 17, when a trial date is likely to be set.