NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS JUN 27 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

IRAN THALASSEMIA SOCIETY, an NGO No. 23-35366 with over 23,000 thalassemia member patients; H.K., a five-year-old male Iranian D.C. No. 3:22-cv-01195-HZ child suffering from epidermolysis bullosa; A.M., a similarly afflicted seven year old female Iranian child; S.N., a similarly MEMORANDUM* afflicted ten year old male Iranian child; M.M., a similarly afflicted thirteen year old female Iranian child; FZ.H., a similarly afflicted eighteen year old female Iranian youth; F.E., a similarly afflicted twenty one year old female Iranian youth; NO CHILD SHOULD SUFFER, an Oregon domestic nonprofit corporation; EB HOME, an NGO with over 500 registered epidermolysis bullosa patients,

Plaintiffs-Appellants,

v.

OFFICE OF FOREIGN ASSETS

CONTROL; JANET YELLEN, Secretary of the Treasury; ANDREA GACKI, Director of the Office of Foreign Assets Control,

Defendants-Appellees.

Appeal from the United States District Court for the District of Oregon

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Marco A. Hernandez, Chief District Judge, Presiding

Argued and Submitted May 13, 2024 San Francisco, California

Before: CALLAHAN and NGUYEN, Circuit Judges, and KRONSTADT,** District Judge.

Plaintiffs are a group of Iranian citizens suffering from rare genetic

disorders, Iranian organizations representing such individuals, and No Child

Should Suffer, an Oregon non-profit corporation that is seeking to donate funds for

the treatment of those disorders. Plaintiffs seek medical treatment consisting of

iron-chelating drugs to complement blood transfusion therapy, and a specific type

of wound dressing. In this action, Plaintiffs seek an injunction and declaration that

the Office of Foreign Assets Control (“OFAC”) has violated the law by threatening

to impose sanctions on transactions involving humanitarian aid to Iran. The

district court granted, without leave to amend, Defendants-Appellees’ motion to

dismiss the Second Amended Complaint (“SAC”) for lack of standing.

We have jurisdiction under 28 U.S.C. § 1291. We review de novo a district

court’s order granting a motion to dismiss for lack of jurisdiction. Chen v. Allstate

Ins. Co., 819 F.3d 1136, 1141 (9th Cir. 2016). We review for abuse of discretion a

district court’s refusal to grant leave to amend when a motion to dismiss is granted.

** The Honorable John A. Kronstadt, United States District Judge for the Central District of California, sitting by designation.

2 Hoang v. Bank of America, N.A., 910 F.3d 1096, 1102 (9th Cir. 2018). We affirm.

1. Article III standing requires that the plaintiffs show (1) that they have

suffered an injury in fact (2) which is fairly traceable to the defendant’s challenged

conduct, and (3) that their injury is likely to be redressed by a favorable decision.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). Where, as here, the

plaintiffs’ theory of standing rests upon the independent choices of third parties not

before the court, “it becomes the burden of the plaintiff to adduce facts showing

that those choices have been or will be made in such a manner as to produce

causation and permit redressability of injury.” Id. at 562. “That’s so because the

third parties may well have engaged in their injury-inflicting actions even in the

absence of the government’s challenged conduct.” Mendia v. Garcia, 768 F.3d

1009, 1013 (9th Cir. 2014). There is no redressability where “any prospective

benefits depend on an independent actor who retains broad and legitimate

discretion” to decline to take the action which would redress the injury. Glanton

ex rel. ALCOA v. AdvancePCS Inc., 465 F.3d 1123, 1125 (9th Cir. 2006).

Plaintiffs have pleaded facts that, if established, would show that prior to

2018, the drugs and wound dressings used to treat the relevant medical conditions

flowed into Iran without limitation. However, with the beginning of the

“maximum pressure” sanctions regime in 2018, Plaintiffs have been unable to

arrange the purchase or delivery of the necessary medical supplies. Specifically,

3 Plaintiffs contend that the needed supplies became unavailable after OFAC issued

public statements that transactions for humanitarian goods, including the relevant

medicines and dressings, were subject to sanctions if they involved certain

Specially Designated Nationals (“SDNs”). The SAC alleges that because of

OFAC’s threats to impose sanctions, third party banks refused to facilitate

transactions between sellers and manufacturers of pharmaceutical products and

their Iranian counterparties. The SAC also alleges that, as a result of OFAC’s

threats, the pharmaceutical company that manufactures the necessary wound

dressings refused to do any business involving Iran. Thus, the SAC alleges that

Plaintiffs were harmed by OFAC’s statements because they have made it

extraordinarily difficult, if not impossible, to obtain the relevant drugs and

dressings within Iran.

Plaintiffs have not pleaded facts sufficient to establish causation. Plaintiffs’

theory of causation hinges upon third parties’ subjective fears of future government

action. As the Supreme Court clarified in Clapper v. Amnesty Int’l USA, 568 U.S.

398 (2013), third parties’ refusal to engage with plaintiffs based on their subjective

fears of future government action does not establish that any injuries to those

plaintiffs are fairly traceable to the challenged government actions. Clapper, 568

U.S. at 417–18, 417 n.7. Accordingly, there is no causation under the set of facts

4 alleged by Plaintiffs.1

Plaintiffs have not pleaded facts sufficient to establish redressability. As

noted, there is no redressability if, following a favorable decision, redress of the

injury “would still depend on the unfettered choices made by independent actors

not before the courts.” Novak v. United States, 795 F.3d 1012, 1020 (9th Cir.

2015) (citing ASARCO Inc. v. Kadish, 490 U.S. 605, 615 (1989)). The SAC

alleges that, following the 2018 “maximum pressure” sanctions, third party banks

withdrew from the Iranian market due both to “fears of sanctions” as well as

“minimal” fees. See Novak, 795 F.3d at 1020 (stating that there is no redressability

where plaintiffs have “alleged several reasons” that their injury may persist even if

relief were granted). The SAC also alleges that the manufacturer of the wound

dressings has declined to transact with Iranian counterparties even under any of

several exemptions to the U.S. sanctions regime. Given these allegations, any

judicially-ordered relief would leave the third party banks and pharmaceutical

company free to continue to decline to do business in, or with those in Iran. Thus,

there is no redressability.

1 Certain plaintiffs contend that a letter from the pharmaceutical company that manufactures the needed wound dressings demonstrates that the pharmaceutical company’s refusal to deal with Iranian counterparties is caused by OFAC’s threatened sanctions. However, this letter states that the company is not willing to sell its products to Iran because of “US Economic sanctions in force,” not OFAC’s public statements concerning the scope of humanitarian exemptions to Iranian sanctions. Therefore, the letter does not demonstrate causation.

5 Finally, No Child Should Suffer lacks standing because it has neither

articulated a concrete plan to donate funds nor been subject to a specific warning

or threat of enforcement. Thus, there is no case or controversy with respect to No

Child Should Suffer. Sacks v. OFAC, 466 F.3d 764, 772 (9th Cir. 2006); Wolfson

v. Brammer, 616 F.3d 1045, 1058 (9th Cir. 2010).

Because Plaintiffs cannot show causation or redressability, they have not

established Article III standing.

2. The district court did not abuse its discretion when it declined to grant

Plaintiffs leave to amend their Complaint a third time. Plaintiffs’ theory relies

upon an assumption that the injunctive and declaratory relief that they seek would

make it substantially more likely that counterparties would resume business with

those in Iran. In seeking leave to amend the SAC, Plaintiffs have not stated what

facts they may add to the SAC to correct deficiencies concerning causation and

redressability. Foman v. Davis, 371 U.S. 178, 182 (1962) (leave to amend may be

denied due to “futility of amendment”). Because these deficiencies would persist

notwithstanding any amendment, we conclude that amendment would be futile and

affirm.

AFFIRMED.

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