Tafflin v. Levitt

493 U.S. 455 (1990)

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Nature of the Case

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Facts

Old Court Savings & Loan, Inc. (Old Court), a Maryland savings and loan association, and the Maryland Savings-Share Insurance Corp. (MSSIC), a state-chartered nonprofit corporation created to insure accounts in Maryland savings and loan associations that were not federally insured both collapsed. Ps are nonresidents of Maryland who hold unpaid certificates of deposit issued by Old Court. Levitt (Ds) are the former officers and directors of Old Court, the former officers and directors of MSSIC, the law firm of Old Court and MSSIC, the accounting firm of Old Court, and the State of Maryland Deposit Insurance Fund Corp., the state-created successor to MSSIC. Ps sued Ds in federal court alleging various state law causes of action as well as claims under the Securities Exchange Act of 1934 (Exchange Act), and RICO. The District Court granted Ds' motions to dismiss, concluding that Ps had failed to state a claim under the Exchange Act and that, because state courts have concurrent jurisdiction over civil RICO claims, federal abstention was appropriate for the other causes of action because they had been raised in pending litigation in state court. The Court of Appeals affirmed. It held in part that 'a RICO action could be instituted in a state court and that Maryland's 'comprehensive scheme for the rehabilitation and liquidation of insolvent state-chartered savings and loan associations,' provided a proper basis for the district court to abstain. Ps appealed.