A former San Francisco Community College trustee has no right to sue city police for arresting him on suspicion of counterfeiting after he passed what turned out to be a genuine $100 bill, a federal appeals court ruled Monday.

The Ninth U.S. Circuit Court of Appeals in San Francisco said the officers could not be held liable for their mistake, which led them to handcuff Rodel Rodis at a Walgreens drugstore in February 2003 and take him to a station before confirming the bill's authenticity through the Secret Service.

"Although the arrest was unfortunate, we cannot say that the officers' belief that (the bill) was fake was plainly incompetent," wrote Judge Dorothy Nelson, who was joined in the 3-0 opinion by Judges Consuelo Callahan and Cormac Carney. "The arrest, therefore, was not clearly established as unlawful."

The court cited the importance of granting limited legal immunity to public officials such as police officers, who may be held responsible for abusing their power but are also protected from lawsuits if they act reasonably.

Rodis, an attorney, served 18 years on the community college board before losing a re-election bid in November. He is also a former president of the San Francisco Public Utilities Commission, and now writes a column that appears in a dozen newspapers serving the Filipino American community.

He said Monday that he might ask the full Court of Appeals to reconsider the ruling.

"I'm extremely disappointed," said Rodis, 57, who had sought damages under federal civil rights laws. "This gives the police the unfettered license to arrest anyone for the flimsiest of reasons without using common sense."

Deputy City Attorney Scott Wiener said his office had fought the suit after concluding the officers did nothing wrong and acted in good faith.

"Officers have to make arrest decisions with very limited time and limited information," Wiener said. "Even if the person ends up being innocent, the officers are not automatically liable. The system would collapse if it were any other way."

Wiener said the Rodis case prompted changes in the law. Police now must have evidence that a person passing a counterfeit bill is doing so intentionally before making an arrest.

Rodis was arrested at a Walgreens on Ocean Avenue near his San Francisco home. The $100 bill he gave the clerk was from 1985 and lacked anti-counterfeiting marks that appear on newer money.

The cashier thought the bill was odd and summoned the store manager, who tested the bill with a special pen that indicated it was authentic. Still, the manager called police, who concluded the bill was a fake and arrested Rodis on suspicion of possessing counterfeit currency.

As the judges wrote, "No effort was made to investigate Rodis' state of mind."

After talking to the Secret Service, the police officers drove Rodis back to the drugstore. He spent about an hour in custody.

The appeals court had ruled in August 2007 that Rodis could take his lawsuit to trial. However, San Francisco appealed to the U.S. Supreme Court, which returned the case to the Ninth Circuit for further review in light of its ruling in another case involving immunity for police officers.