Court of Appeal’s decision – June 29, 2011

California Court of Appeal publishes decision upholding a lender’s right to refuse to lend money to a convicted felon. In Semler v. GECC, 196 Cal.App.4th 1380 (2011), the Court of Appeal affirmed the trial court’s complete dismissal of discrimination claims brought by a plaintiff under California’s Unruh Act against General Electric Capital Corporation based on GECC’s refusal to make a loan to a limited liability company whose managing member included a felon convicted of conspiring to falsify customs documents and selling munitions to Syria. The Court concluded that “being a felon is not a personal characteristic similar to those enumerated in the [Unruh] Act; the lending institution had legitimate business reasons justifying its decision–the repayment of the loan and making a return on its equity investment; and the potential consequences of allowing such a claim would improperly involve the courts in second-guessing a lending institution’s expertise in determining loan and investment criteria.” SH&L partner Scott Lieberman represented GECC in the trial court and appellate court proceedings. Read the Court of Appeal’s decision.