Judge Laura Taylor Swain accepted AIG's argument that shareholders led by the Louisiana Municipal Police Employees' Retirement System failed to first ask the company's board to take action or to show why such a demand would have been futile.
The complaint accused AIG officials of ignoring the potential for catastrophic losses stemming from exposure to credit default swaps through the New York-based company's financial services unit.
These losses led to roughly $180 billion of bailouts that left the federal government with close to an 80% stake in AIG. The insurer has been selling assets to repay the government.
A lawyer for the lead plaintiff, the Louisiana Municipal Police Employees' Retirement System pension fund, did not immediately return a call seeking comment. AIG also did not immediately return a call for comment.