Eighth Circuit Upholds Application Of Maryland’s Narrow Futility Exception To Demand Requirement

The United States Court of Appeals for the Eighth Circuit recently affirmed the application of Maryland's demand requirement to a derivative claim arising under the federal Racketeer Influenced and Corrupt Organizations Act ("RICO") as well as to Maryland state law claims. Gomes v. American Century Companies, Inc., 710 F.3d 811 (8th Cir. 2013). Plaintiff, an investor in a Maryland corporation, argued that applying Maryland's demand requirement to his racketeering claim would be inconsistent with RICO's broad remedial purpose, and also contended that even if his RICO claim were subject to the demand requirement, demand was excused as to his Maryland claims.

Upholding a decision of the United States District Court, the Eighth Circuit held that application of Maryland's demand requirement would not frustrate the policies of RICO...