A unanimous three-judge panel ruled that the liability shield protected the bank from claims brought by Mohammad Farshad Abdollah Nia under 42 U.S.C. § 1981, the Equal Credit Opportunity Act, the California Unruh Civil Rights Act, and the California Unfair Competition Law.
Nia, an Iranian citizen living in the United States, had maintained the account since 2015. The bank closed it in 2019 under its Consumer Residency Monitoring policy, which requires accountholders who are citizens of comprehensively sanctioned countries to periodically submit documents proving they are not present or resident in those countries. The closure followed the bank's erroneous classification of Nia's Form I-797C immigration document as temporary rather than permanent proof of residency.
Circuit Judge Lawrence VanDyke, writing for the panel, rejected Nia's argument that the shield applies only to actions specifically mandated by sanctions regulations. "Nia's argument has no root in the text of the statute," VanDyke wrote. "Neither term suggests compulsion. And the liability shield extends to actions taken pursuant to and in reliance on 'instruction[s]' or 'direction[s],' neither of which imply compulsion either."
The panel held that the bank's policy "falls comfortably within the liability shield's ambit" because it was "clearly built around the demands of the ITSR." VanDyke wrote that "applying a sanctions compliance program based on citizenship may not be compelled by the ITSR, but it is certainly permitted under OFAC's guidelines."
The court also rejected Nia's bad-faith arguments, finding no genuine issue of material fact. VanDyke dismissed Nia's reliance on seven Consumer Financial Protection Bureau complaints as evidence of bad faith, noting that the bank "has served 67,000 Iranian citizen accountholders since 2016."
Nia had voluntarily dismissed his remaining ECOA notice claim and an associated UCL claim before appealing.