A California appeals court overturned Tuesday a $1.6 billion judgment against Bank of America Corp. that had ordered the bank to pay back overdraft fees taken from the accounts of senior citizens.

The class-action case centered on the practice of Bank of America, formerly based in San Francisco but now a Charlotte, N.C. institution, collecting overdraft fees from direct-deposit accounts set up to receive Social Security benefits.

In 2004, a jury found the bank’s actions violated California banking laws, which prohibit banks from taking Social Security benefits to recover customer debts. That would have required the bank to pay $1,000 to each harmed plaintiff, with lawyers estimating 1.3 million customers were affected.

Overall, the case could have cost the bank $1.6 billion, including nearly $300 million in compensatory damages and restitution.

It was unclear whether the plaintiffs plan to pursue an appeal to the state Supreme Court.