SANTA MONICA, Calif. — The Hotel Shangri-La, an Art Deco palace on a bluff next to the Pacific Ocean, looks the way Los Angeles is supposed to look but mostly doesn’t: its exterior is bright white, with rounded corners, glass tiles and upper-story railings. Its look is matched by its lore, a Hollywood haunt where Bill Clinton and Tom Cruise have been spotted among the guests and where a favorite story has it that Sean Penn courted Madonna.

It remains one of this beach city’s tonier hotels, a palmy refuge for those who want to peek at the waves without the bother of Malibu.

But things have been far from idyllic here in the last week, as about a dozen Jewish plaintiffs, mostly young professionals, squared off in court against the hotel and its owner, Tehmina Adaya, over a charge that has not often surfaced in Santa Monica lately: anti-Semitism.

Ms. Adaya was on the spot last week defending herself against a claim that she had violated California’s Unruh Civil Rights Act, a law that bars hotels and other businesses from discriminating in their dealings on the basis of sex, race, religion or a number of other traits or conditions.