U.S. District Court Judge H. Russel Holland says attorneys representing Colorado City and Hildale, Utah, did not make a strong showing of inconvenience.
The attorneys had argued that moving the case to Utah would cut down on travel time and expenses for the parties and witnesses.
Holland wrote in an order this week that traveling to Prescott will take more time, but the cost will be insignificant compared to the overall cost of litigating the case.
The U.S. Department of Justice sued the towns earlier this year, alleging that the towns have supported a campaign of intimidation against former members of the Fundamentalist Church of Jesus Christ of Latter Day Saints and denied them services.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)