Ronald Ruth v. Cherokee Funding LLC, 342 Ga. App. 404

Plaintiffs Ronald Ruth and Kimberly Oglesby received small-dollar "funding agreements" from Cherokee Funding entities during personal-injury litigation; principal amounts were under $3,000.
Agreements were labeled "non-recourse" and stated funder would be paid only from lawsuit proceeds; if no recovery, funder "shall receive nothing" and has "no associated obligation to pay."
Plaintiffs alleged the transactions were loans in violation of the Payday Lending Act (PLA) and the Georgia Industrial Loan Act (GILA).
Defendants moved to dismiss arguing the agreements are investments (non-recourse contingent arrangements), not loans, and thus outside PLA and GILA.
Trial court dismissed GILA claims but allowed PLA claims to proceed; interlocutory appeal followed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the funding agreements are "loans" subject to the PLA	Agreements are loans/advances repayable and therefore regulated by PLA	Agreements are non-recourse investment contracts contingent on recovery, not PLA loans	Reversed: agreements are investment contracts, not loans; PLA does not apply
Whether the funding agreements fall within GILA's definition of "loan"	Agreements are advances "requiring repayment" under GILA	Agreements lack an unconditional repayment obligation and are investments, so GILA inapplicable	Affirmed: GILA does not apply because agreements are not loans requiring repayment

Securities & Exchange Comm. v. Edwards, 540 U.S. 389 (Sup. Ct.) (adopting Howey test for investment contract)
W. J. Howey Co. v. SEC, 328 U.S. 293 (Sup. Ct.) (test for investment contract: money in common enterprise with profits from others' efforts)
Western Sky Fin. v. State of Ga., 300 Ga. 340 (Ga.) (limits on legislative factual recitals and statutory construction)
Deal v. Coleman, 294 Ga. 170 (Ga.) (statutory interpretation principles; plain meaning/context)
Hicks v. State, 315 Ga. App. 779 (Ga. Ct. App.) (Georgia adoption of Howey test)