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The Honolulu Advertiser
Posted on: Friday, January 11, 2008

Suit against Unity House to be filed again

By Jim Dooley
Advertiser Staff Writer

A twice-dismissed federal lawsuit alleging wrongdoing by past and present directors of the nonprofit labor organization Unity House Inc. will be filed a third time, with more than 2,000 individuals' names added as new plaintiffs in the action.

Federal Judge Magistrate Barry Kurren told lawyers assembled in his courtroom that the suit reminds him of the movie "Groundhog Day" in which the principal character must relive the same day over and over again.

"This case just keeps coming back and coming back," Kurren said.

Originally filed in 2005 on behalf of many members of the hotel-restaurant and Teamsters unions here, the lawsuit incorporated many charges brought against Unity House and its former president, Anthony "Tony" Rutledge, in a long-running criminal investigation that ended in 2006 with most of the charges against Rutledge being dropped by federal authorities.

The first version of the suit was dismissed in July 2006, but Kurren gave the plaintiffs permission to file an amended version. Last July, Kurren dismissed most of the allegations in that new complaint.

On Wednesday, he granted permission for filing a third version, which adds the names of more than 2,000 purported members or former members of Unity House as plaintiffs and the names of three directors of Unity House as defendants.

The directors were appointed to the board after a court-ordered takeover of Unity House by the Internal Revenue Service was lifted in 2006.

The suit seeks to reverse changes to the corporate makeup of Unity House enacted under Rutledge and calls for removal of the present board of directors.

Attorney Eric Seitz, who represents one group of Unity House board members, Wednesday said the scheduled trial date in the case of this coming July can't possibly be met, noting that the new lawsuit is nearly 200 pages long. And Seitz said there are many questions about whether the new plaintiffs were legitimate members of Unity House during the periods covered by the lawsuit.

Unity House has assets of more than $32 million.

It was founded by Tony Rutledge's father, Arthur, one-time patriarch of the Teamsters and Hotel Employees Restaurant Employees unions here, as a nonprofit entity delivering benefits and services to members of both unions.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.