Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-24-2003

Gen Refractories Co v. Firemans Fund Ins
Precedential or Non-Precedential: Precedential

Docket No. 02-2211




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                                   PRECEDENTIAL

                                               Filed July 24, 2003

            UNITED STATES COURT OF APPEALS
                 FOR THE THIRD CIRCUIT


                            No. 02-2211


            GENERAL REFRACTORIES COMPANY;
                     GREFCO, INC.
                                  v.
         FIREMAN’S FUND INSURANCE COMPANY;
           GILBERG & KIERNAN; ANDREW BUTZ
                General Refractories Company,
                                 Appellant

        Appeal from the United States District Court
          for the Eastern District of Pennsylvania
                 (D.C. Civil No. 01-cv-05810)
         District Judge: Honorable John R. Padova

                     Argued March 10, 2003
          Before: RENDELL, AMBRO and MAGILL,*
                      Circuit Judges.

                      (Filed: July 24, 2003)




* The Honorable Frank J. Magill, Senior Circuit Judge of the United
States Court of Appeals for the Eighth Circuit, sitting by designation.
                             2


                      Michael Conley, Esq. [ARGUED]
                      Anderson, Kill & Olick
                      1600 Market Street, 32nd Floor
                      Philadelphia, PA 19103
                      Barry L. Katz, Esq.
                      225 City Avenue, Suite 14
                      Bala Cynwyd, PA 19004
                        Counsel for Appellant
                      Ronald P. Schiller, Esq.
                      Daniel J. Layden, Esq.
                      Piper Rudnick
                      18th & Arch Streets
                      3400 Two Logan Square
                      Philadelphia, PA 19103
                        Counsel for Appellee
                        Fireman’s Fund Insurance
                        Company
                      James W. Christie, Esq.
                       [ARGUED]
                      Rex F. Brien, Esq.
                      Christie, Pabarue, Mortensen
                       & Young
                      1880 John F. Kennedy Boulevard
                      10th Floor
                      Philadelphia, PA 19103
                        Counsel for Appellees
                        Gilberg & Kiernan and
                        Andrew Butz


                OPINION OF THE COURT

RENDELL, Circuit Judge.
  General Refractories Company (GRC) appeals the
dismissal with prejudice of its claims of abuse of process
and civil conspiracy against the law firm of Gilberg &
Kiernan and one of its attorneys, Andrew Butz, Esq. We
agree with the District Court that the Complaint failed to
state a claim, under Pennsylvania law, for abuse of process,
but conclude that it abused its discretion in denying GRC
                              3


leave to amend the Complaint as to that claim. We further
disagree with the District Court that the judicial privilege
necessarily would insulate the attorney appellees from
liability for abuse of process. Finally, we agree with the
District Court that the “intracorporate conspiracy doctrine”
immunized the attorney appellees from liability for civil
conspiracy. We therefore will affirm in part and reverse in
part, and remand to the District Court for further
proceedings.

                       I. Background
  GRC once manufactured heat-resistant material, used in
the construction of high temperature facilities, that
contained asbestos. Since that time, it has been the target
of a number of asbestos-related personal injury suits.
Fireman’s Fund Insurance Company (“Fireman’s Fund” or
FFIC) is an insurance company that issued an excess
insurance policy to GRC for a three-year period covering
October 1971 to October 1974, with a one-month extension
for November 1974.
   The operative facts of this case stem from litigation
initiated in April, 1998 by GRC against Fireman’s Fund, in
the Court of Common Pleas of Pennsylvania, Philadelphia
County (hereinafter referred to as the “State Court
Litigation” or, by the District Court, as the “Insurance
Coverage Action”), wherein GRC alleged that Fireman’s
Fund refused to comply with the three-year excess blanket
liability insurance policy. Fireman’s Fund asserted that the
policy had a total coverage limit of $5,000,000, while GRC
asserted that the policy had three annual coverage limits of
$5,000,000 per year. GRC claimed breach of contract,
breach of fiduciary duty, and bad faith, and sought a
declaratory judgment and monetary relief. Appellees —
Gilberg & Kiernan and one of its lawyers, Andrew Butz
(hereinafter referred to as “attorney appellees”) — initially
represented Fireman’s Fund in the notably contentious
State Court Litigation. See generally General Refractories
Co. v. Fireman’s Fund Insur. Co., 

159,
164 (Pa. Com. Pl. Phila. Co. 2000), aff ’d in (pertinent) part,

(Pa. Super. Ct.) (table).
                              4


  The case before us arises from allegedly tortious acts,
committed by Fireman’s Fund and the attorney appellees,
that were the subject of a motion for sanctions filed by GRC
against Fireman’s Fund in the State Court Litigation. In the
motion, GRC alleged that Fireman’s Fund, Gilberg &
Kiernan, and Butz committed an array of discovery and
other litigation abuses. After receiving testimony and
argument for four days, the court agreed with GRC that
Fireman’s Fund and the attorney appellees’ “conduct . . .
was intentional, inexcusable, and warrant[ed] severe
sanctions.” General Refractories Co., 

at
164. The Court’s view regarding the defendant’s actions is
summarized in the following finding:
    The sad history of defendant’s discovery responses in
    this case reveals a clear pattern of delay, stonewalling,
    deception, obfuscation and pretense. Defendant
    intentionally withheld critical documents, ignored court
    orders, permitted false testimony at depositions and
    misrepresented facts to opposing counsel and the
    court. The defendant, through its employees, its house
    counsel and its engaged litigation counsel participated
    in an intentional campaign to hide critical facts and
    documents. At every stage of discovery, reasonable and
    relevant requests have been met by incomplete
    responses, unreasonable objections, unfounded claims
    of privilege and intentionally incomplete “privilege” logs.
    Whenever plaintiff sought court intervention additional
    documents were “found,” “voluntarily produced” and
    the privilege log expanded. . . . Amidst hundreds of
    such insignificant, nonsensical or unintelligible pages,
    are material and significant submissions that
    demonstrate that the defendant engaged in an
    intentional effort to obstruct legitimate discovery by
    using the claim of privilege. Defendant has attempted
    to hide discoverable documents, in an attorney’s file,
    and have [sic] used an overly broad, clearly untenable,
    theory of “privilege” to conceal the knowledge, activity
    and intent which form the very basis of this bad faith
    lawsuit.     The    purportedly     privileged    material
    demonstrates a strategy antagonistic to their insured
    including discussion of bad faith, delaying payment,
    and admissions of fiduciary obligations.
                              5

By order dated April 20, 2000, the Court
imposed a number of sanctions, including the revocation of
Gilberg & Kiernan and Butz’s pro hac vice admission, a fine
of $126,897.91 payable to the City of Philadelphia, the
payment of GRC’s costs and attorney’s fees in bringing the
motion for sanctions, a 120-day extension of discovery, a
blanket waiver of Fireman Fund’s right to assert privilege as
to a large number of documents, and a directive that
Fireman’s Fund supplement and correct its prior responses
to GRC’s discovery requests. 

The Court noted
that it imposed only the “minimum sanction that
accomplishes the goal of correcting discovery abuses,
restor[ing] the case to proper discovery course,
appropriately punishes recalcitrant behavior and deters
future obstreperous conduct by the defendant.” 

On appeal, the Superior Court of Pennsylvania largely
upheld all of the sanctions imposed, except for the blanket
waiver of privilege. General Refractories Co. v. Fireman’s
Fund Insur. Co., 

(Pa. Super. Ct.) (table).
  While the appeal was pending, GRC brought a separate
suit in the Common Pleas Court against Fireman’s Fund,
Gilberg & Kiernan, and Andrew Butz (together referred to
as “the defendants”), complaining of the actions of
Fireman’s Fund and the attorney appellees during the State
Court Litigation and seeking recovery of damages. The
defendants removed the case to the District Court for the
Eastern District of Pennsylvania.
   The Complaint’s allegations largely replicate the Common
Pleas Court’s findings in the sanctions proceeding.
Nevertheless, because we are asked to analyze the
sufficiency of the Complaint, we find it necessary to
highlight the exact wording of many of these allegations,
specifically that the defendants engaged in the following
conduct: “[a] clear pattern of delay, stonewalling, deception,
obfuscation and pretense;” “[i]ntentionally withholding
critical documents;” “[i]gnoring court orders;” “[t]estifying
falsely at depositions, with litigation counsel fully aware of
the false testimony;” “[m]isrepresenting facts to the Court
and opposing counsel;” “[p]articipating, through FFIC
employees, its house counsel and litigation counsel, in an
intentional campaign to hide critical facts and documents;”
                              6


“[p]roviding incomplete responses, unreasonable objections,
unfounded claims of privilege and intentionally incomplete
privilege logs in response to reasonable and relevant
[requests];” “[u]sing an overly broad, clearly untenable
theory of privilege to conceal the knowledge, activity and
intent which formed the basis of the Insurance Coverage
Action;” “[a]ctively hiding highly probative documents while
moving for summary judgment on the issues to which the
hidden documents related;” “[u]sing hidden documents
during a deposition of a representative of GRC;” “[l]itigation
counsel falsely suggesting he did not previously know of the
hidden documents when their existence was finally
disclosed;” “[c]ontinuing to locate hundreds of documents
that should have been produced or put on privilege logs,
each time claiming that they had just been ‘found;’ ”
“[e]ngaging in obdurate conduct, including actions
demonstrating an attempt to obstruct the discovery
process;” “[f]ailing to timely seek a stay of court orders
while an appeal was pending, while at the same time
refusing to comply with those orders;” “encouraging
witnesses to provide false and misleading testimony;” and
“encourag[ing] and convinc[ing] FFIC to change [its] position
[toward the insurance policy coverage] and to breach FFIC’s
contractual duties to GRC.” According to the Complaint, the
defendants engaged in this conduct for various reasons,
including “to further the interests of FFIC,” “to obtain an
unfair litigation advantage,” “to delay FFIC having to pay
any money to GRC,” to “drain GRC’s resources and delay
the litigation,” “to keep GRC from discovering their
agreements and actions,” and “to defeat the claims of GRC
at any cost.” The Complaint also alleges that Fireman’s
Fund, individually, “used the discovery and litigation
processes for purposes of harassment and delay.”
   Based on these averments, GRC sought recovery under
five distinct causes of action. In count I, GRC alleged that
Fireman’s Fund committed insurance bad faith under title
42, section 8371 of the Pennsylvania Consolidated Statutes.
In count II, it alleged that Fireman’s Fund breached a
fiduciary duty owed to GRC. In count III, it alleged that the
defendants violated the Pennsylvania common law’s
prohibition against abuse of process. In count IV, it alleged
that the attorney appellees tortiously interfered with GRC’s
                             7


contract with Fireman’s Fund. In count V, it alleged that
the defendants engaged in a civil conspiracy to violate the
Pennsylvania bad faith statute and to abuse process.
Altogether, GRC sought damages totaling $497,588 — the
total attorney’s fees and costs they allege they have
incurred due to the discovery abuses (but not the already-
reimbursed fees for costs related to bringing the motion for
sanctions).
   The defendants filed motions to dismiss all counts
against them for failure to state a claim under Federal Rule
of Civil Procedure 12(b)(6). The District Court granted
Gilberg & Kiernan and Butz’s motion in whole and
Fireman’s Fund’s motion in part. See General Refractories
Co. v. Fireman’s Fund Ins. Co., No. 01-CV-5810, 

(E.D. Pa. Feb. 28, 2002). The Court denied
Fireman’s Fund’s motion to dismiss count I, the bad faith
claim, and also denied its motion as to count II, the breach
of fiduciary duty claim, ruling that that claim would go
forward as a claim for breach of the duty of good faith and
fair dealing. 

The Court granted each Defendant’s
motion to dismiss count III, the abuse of process claim, and
count V, the civil conspiracy claim. 

*7. The Court
also granted the attorney appellees’ motion to dismiss
count IV, the tortious interference claim. 

GRC
moved for reconsideration, leave to amend the abuse of
process claim, or, in the alternative, an order under Federal
Rule of Civil Procedure 54(b) allowing it to bring an
immediate appeal as to the attorney appellees. The Court
denied reconsideration and refused to grant leave to
amend, but granted the Rule 54(b) motion.
   On appeal, GRC challenges the Court’s decision to
dismiss the abuse of process and civil conspiracy claims, as
well as its denial of leave to amend, but has chosen not to
appeal the dismissal of the tortious interference claim. In
dismissing the abuse of process claim, the District Court
held that the Complaint failed to state a cause of action for
abuse of process and further found that, in any event,
judicial privilege would have insulated the defendants from
liability for many of their actions, 

and that
granting leave to amend would be futile. In dismissing the
civil conspiracy claim, the Court concluded that the
                                     8


“intracorporate conspiracy doctrine” insulated the attorney
appellees from liability. 

GRC challenges all of
these rulings, while the attorney appellees not only contend
that the District Court’s rulings were proper, but
additionally argue that the abuse of process claim could
have been dismissed because it failed to contain any
allegations that they used “legal process” as required to
recover under the tort.1
  We conclude that, although the District Court correctly
determined that the Complaint does not contain the
necessary allegations to state a cause of action for abuse of
process, the District Court interpreted abuse of process in
Pennsylvania too narrowly and, therefore, should have
granted GRC leave to amend its Complaint. We also reject
the attorney appellees’ argument that GRC failed to allege
properly that they used a “legal process,” and we conclude
that the District Court too broadly interpreted the
application of the judicial privilege in Pennsylvania. Lastly,
we agree with the District Court that the intracorporate

1. The jurisdiction of the District Court arose under 28 U.S.C. § 1332.
We have jurisdiction under 18 U.S.C. § 1291. We review de novo a
dismissal with prejudice under Rule 12(b)(6). Malia v. General Elec. Co.,

, 830 (3d Cir. 1994). We accept as true all well-pleaded facts
and reasonable inferences in the complaint. See 

affirm the
dismissal “only if it is certain that no relief can be granted under any set
of facts which could be proved.” Steamfitters Local Union No. 420 Welfare
Fund v. Philip Morris, Inc., 

, 919 (3d Cir. 1999) (internal
quotations removed). We review the District Court’s refusal to grant GRC
leave to amend its complaint for abuse of discretion. Ramsgate Court
Townhome Ass’n v. West Chester Borough, 

, 161 (3d Cir.
2002).
  Because our jurisdiction is based on the diversity of citizenship of the
parties, we must apply state law. See Orson, Inc. v. Miramax Film Corp.,

, 1373 n.15 (3d Cir. 1996). Pennsylvania law governs this
action. We are bound by statements made by the highest state court,
here, the Supreme Court of Pennsylvania, and are to predict how that
court would decide the issues before us. 

not bound by the
jurisprudence of lower state courts, but often refer to them as persuasive
authority. See Hughes v. Long, 

, 128 (3d Cir. 2001). In
addition, we consider the opinions of other federal courts interpreting
state law, as well as opinions from other jurisdictions that have
discussed similar issues. 

doctrine insulated the attorney appellees from
liability for civil conspiracy.

                    II. Abuse of Process

                              A.
  The Supreme Court of Pennsylvania has said that “[t]he
gist of an action for abuse of process is the improper use of
process after it has been issued, that is, a perversion of it.”
McGee v. Feege, 

, 1023 (Pa. 1987) (citing
Mayer v. Walter, 

(1870)); see also Morphy v.
Shipley, 

, 674 (Pa. 1945) (“ ‘An abuse is . . . a
perversion of [legal process].’ ” (quoting 

)). A “perversion” of legal process occurs when a party
uses the process “primarily to accomplish a purpose for
which the process was not designed.” Dumont Television &
Radio Corp. v. Franklin Elec. Co. of Phila., 

,
587 (Pa. 1959). Generally speaking, to recover under a
theory of abuse of process, a plaintiff must show that the
defendant used legal process against the plaintiff in a way
that constituted a perversion of that process and caused
harm to the plaintiff. See Hart v. O’Malley, 

,
551 (Pa. Super. Ct. 1994); Rosen v. Am. Bank of Rolla, 

, 192 (Pa. Super. Ct. 1993).
  The District Court recognized these elements of the tort,
General Refractories, 

, at *4, but also
stated the following:
    The Complaint alleges that Defendants used abusive
    discovery tactics and improper motion practice in order
    to gain a litigation advantage in the Insurance Coverage
    Action. This allegation is not sufficient to support a
    claim for abuse of process because the Complaint does
    not allege that Defendants abused process for an
    unlawful purpose unconnected to the purpose for which
    the process was designed, i.e., a successful conclusion
    to the Insurance Coverage Action.

Thus, the Court found GRC’s
Complaint deficient because the “purpose” for any alleged
use of process was to “gain a litigation advantage” in — or
                                      10


was “[ ]connected to the successful conclusion of ” — the
State Court Litigation. As the attorney appellees put it, the
District Court concluded that, in order to state a claim, the
process must have been used “primarily for the purpose of
coercing a collateral advantage,” that is, unrelated to the
underlying litigation. GRC concedes that, if we agree that
the test under Pennsylvania law requires a primary purpose
of achieving a “collateral advantage,” the District Court
properly dismissed the abuse of process claim.
   We, however, do not agree. Neither the Supreme Court of
Pennsylvania, nor any other Pennsylvania state court, has
so narrowly construed the tort. And, we find no evidence
that the Supreme Court of Pennsylvania would do so if
presented with the opportunity. Instead, the Supreme
Court has interpreted the tort broadly, making clear that it
“will not countenance the use of the legal process as a
tactical weapon to coerce a desired result that is not the
legitimate object of the process.” 

.
See generally 1 Fowler Harper, Fleming James, & Oscar
Gray, The Law of Torts § 4.9 (2d ed. 1986) (referring to this
broader interpretation as the modern trend). As a result, a
court must look at the legal process used and decide
whether it was used primarily2 “to benefit someone in
achieving a purpose which is not the authorized goal of the
procedure in question,” Werner v. Plater-Zyberk, 

, 785 (Pa. Super. Ct. 2002) (emphasis added), not
whether it was used to achieve a purpose or advantage
unrelated or “collateral” to the entire underlying litigation
proceeding.
  While it is true that the term “collateral” is sometimes
used by Pennsylvania courts when discussing an abuse of
process, see, e.g., 

, the attorney
appellees have taken the term out of the context in which
courts usually employ it, and therefore stripped it of its
connotation. For instance, they rely on the following
language from In re Larson, 

(Pa. 1992):

2. “ ‘The significance of [the word ‘primarily’] is that there is no action for
abuse of process when the process is used for the purpose for which it
is intended, but there is an incidental motive or spite or an ulterior
purpose of benefit to the defendant.’ ” 

(quoting
Restatement (Second) of Torts, § 682, cmt. b).
                                    11


     Abuse of process differs from malicious prosecution in
     that the gist of the tort is not commencing an action or
     causing process to issue without justification, but
     misusing, or misapplying process justified in itself for
     an end other than that which it was designed to
     accomplish. The improper purpose usually takes the
     form of coercion to obtain a collateral advantage, not
     properly involved in the proceeding itself such as the
     surrender of property or the payment of money by the
     use of the process as a threat or a club. There is, in
     other words, a form of extortion, and it is what is done
     in the course of negotiation, rather than the assurance
     [sic] of the process itself, which constitutes the tort.

(citing Prosser and Keeton on Torts, § 131 at
897 (5th ed. 1984)).3 Accordingly, the attorney appellees
insist that extortion or a similar purpose unrelated to the
underlying litigation is necessary for an abuse of process
claim. But, again, this results in a distortion of the concept
and its meaning. The attorney appellees effectively have
interpreted the modifier “usually” out of the language. A
“collateral advantage” or some type of extortion outside of
the underlying litigation is not the only type of abuse of
process case; rather, it is the usual case — in other words,
“the classic example.” Al Hamilton Contracting Co. v.
Cowder, 

, 192 (Pa. Super. Ct. 1994).
   For the same reason, we find unpersuasive the attorney
appellees’ interpretation of section 682 of the Restatement
(Second) of Torts and the Pennsylvania cases favorably
citing to and adopting it. See, e.g., 

.
Section 682 defines abuse of process essentially as

3. We note that the excerpt is from a report filed by the Judicial Inquiry
and Review Board of the Supreme Court of Pennsylvania, and accepted
by the Supreme Court, with four justices recused and one justice
dissenting, in a matter involving alleged improprieties of a justice of that
court. Ordinarily, then, we would be inclined to view its persuasive value
as minimal. But, because the language is lifted nearly verbatim from a
definitive treatise, see W. Prosser & W. Keeton, The Law of Torts § 121
at 898 (5th ed. 1984), we believe that the Supreme Court of
Pennsylvania would find it persuasive. In any event, we do not think the
Court would interpret it the way that the attorney appellees insist we
should.
                                  12


Pennsylvania courts do; it states: “One who uses a legal
process, whether criminal or civil, against another primarily
to accomplish a purpose for which it is not designed, is
subject to liability to the other for harm caused by the
abuse of process.” Restatement (Second) of Torts § 682; see
also 

(referring to “collateral purpose”
as “use[ ] primarily for a purpose for which the process was
not designed”). The attorney appellees have pounced on
comment “b” to section 682, in arguing that an extortion-
like purpose must lie behind the use of process. That
provision provides that “[t]he usual case of abuse of process
is one of some form of extortion, using the process to put
pressure upon the other to compel him to pay a different
debt or to take some other action or refrain from it.”
Restatement (Second) of Torts § 682 cmt. b; see also 

(quoting this section of Restatement).
Again, the attorney appellees ignore “usual.” The
Restatement is concerned with individual legal processes
primarily used for purposes for which they were not
designed, see Restatement (Second) of Torts § 682, not
whether they are used for purposes unconnected or
unrelated to the underlying litigation. As the Restatement
states, “The gravamen of the misconduct is the misuse of
process, no matter how properly obtained, for any purpose
other than that which it was designed to accomplish.” 

cmt. b (emphasis added). The Restatement does not
speak in terms of the relationship of the purpose to the
litigation that the attorney appellees would have us read
into the tort.4
  The potential ramifications of the District Court and
attorney appellees’ interpretation of the tort buttress our

4. Moreover, it would seem that even if extortion-like purposes were
required for an abuse of process, the alleged actions of the attorney
appellees might qualify. “Extortion,” defined as “obtaining from by
coercive means, by threats or intimidation,” Webster’s II New Riverside
University Dictionary (1988), could encompass some of the purposes
alluded to in the allegations made by GRC, such as forcing GRC to
abandon its claim because of the attorney appellees’ apparent
willingness to “harass” and cause financial injury to GRC. But we do not
reach this issue because there is no support for the notion that the
extortion must be wholly unrelated to the underlying litigation.
                              13


conclusion. Were we to accept their view, we would render
the tort largely impotent, inapplicable to those cases where
a legal process is pursued in a perverted manner in order
to directly harm an adversary. We would be condoning
tortious tactics that harm and otherwise disadvantage an
adversary simply because those tactics are related to the
litigation and improve a party’s chances of succeeding in
the litigation. We refuse to do so and doubt that the
Supreme Court of Pennsylvania would. Accord Poduska v.
Ward, 

, 856 (1st Cir. 1990) (rejecting the
argument that Massachusetts limits abuse of process
claims to instances where the defendant intended to coerce
or extort the plaintiff); 2 Dan B. Dobbs, The Law of Torts
§ 438 (2001) (“[T]he advantage need not always be collateral
in the sense that it would be outside the court’s power to
grant.”); Harper, James, & Gray, The Law of Torts § 4.9
(stating that “the cause of action should be available in
circumstances [other than extortion-like threats] as well, so
long as intentional abuse of the legal system can be
proved”).
   In fact, in its most recent opinion discussing abuse of
process, McGee v. Feege, the Supreme Court of
Pennsylvania, although not dealing with the issue directly,
allowed an abuse of process claim based on purposes that
were related to the underlying litigation to go forward. 

. In that case, McGee had successfully
prosecuted a workmen’s compensation claim against her
employer. Her employer, however, engaged in a “blatant
misuse of legal process to avoid payment of a legal
obligation.” 

n.5. The “misuse” involved the filling
of over ten different petitions and motions related to the
workmen’s compensation claim, many in spite of Supreme
Court of Pennsylvania’s order granting McGee’s petition to
enforce judgment. 

While the central holding of
the case was that an abuse of process did not require a
seizure of property, see 

n.6, 1026, the Court
expressed no reservations with the other aspects of the
claim and forcefully endorsed the broad viability of the tort
of abuse of process, making clear, as 

, that it
“will not countenance the use of the legal process as a
tactical weapon to coerce a desired result that is not the
legitimate object of the process.” 

The Court’s
                             14


use of “coerce” is especially important, because it was
concerned with the coercion or causation of an illegitimate
result, and did not limit the coercion to that causing a
result collateral or unconnected to the underlying litigation
or to any other context.
   Having rejected the less expansive view of the tort urged
by the attorney appellees and employed by the District
Court that would require a purpose unconnected to the
litigation, we think the test that courts should use in
deciding what circumstances amount to an abuse of
process has been clearly enunciated by the Supreme Court
of Pennsylvania. Quite simply, a court should ask whether
there has been a “perversion” of the process, or, whether a
legal process has been used “as a tactical weapon to coerce
a desired result that is not the legitimate object of the
process.” 

  Responding to that inquiry, we believe that using a legal
process primarily to harass and cause direct injury to an
adversary similar to what occurred here could constitute a
perversion of that process. The following excerpt from the
Superior Court’s opinion in Shiner v. Moriarty is illustrative
of this concept:
    The Shiners did not merely allege that the Moriartys’
    and the attorney defendants’ intentions were impure.
    They alleged that the equity action, the petitions
    directed toward the confessed judgment, and the
    sundry motions to stay the execution on the leasehold
    during the pendency of these actions were undertaken
    and continued in an effort to harass and to cause them
    financial and emotional injury. These objectives are
    illegitimate in the context of any civil proceeding in
    Pennsylvania. . . . Pursuing litigation primarily to
    harass and cause injury to the adverse party is an
    objective not authorized by the equity action or the
    efforts to avoid the confessed judgment and constitutes
    a sufficient perversion of the process employed here to
    support a common law claim of abuse of process. . . .
    [T]he evidence presented was sufficient to permit a jury
    to determine that the Moriartys and the attorney
    defendants proceeded for a primary purpose of
                             15


    harassing the Shiners, and not to preserve the
    leasehold and avoid eviction.
Shiner v. Moriarty, 

, 1236 (Pa. Super. Ct.
1998) (citations omitted) (emphasis added); see also
Nienstadt v. Wetzel, 

, 882 (Ariz. Ct. App. 1982)
(cited in 

, and 

) (stating that the purpose of “expos[ing] the injured
party to excessive attorney’s fees and legal expenses” may
support an abuse of process claim); cf. Edwards v. Wyatt,
No. 01-1333, 

, at 13 (E.D. Pa. November
5, 2001) (finding no abuse of process where the alleged
harassment stemmed from allegations in the ad damnum
clause of a complaint). Other courts have made similar
conclusions, such as that use of the legal processes “to
weaken the resolve of the other party” could satisfy the
perversion element. Givens v. Mullikin ex rel. Estate of
McElwaney, 

, 402 (Tenn. 2002); 

. .
hold that abuse of process in the civil discovery context
may lie when (1) the party who employs the process of a
court specifically and primarily intends to increase the
burden and expense of litigation to the other side; and (2)
the use of that process cannot otherwise be said to be for
the ‘legitimate or reasonably justifiable purposes of
advancing [the party’s] interests in the ongoing litigation.’
(citation omitted) (emphasis in original)); Barquis v. Merchs.
Collection Ass’n, 

, 824 (Cal. 1972) (finding a
properly pled “ulterior purpose” where the complaint
contained allegations of an “intent to impair individuals’
rights to defend suits and, in effect, to coerce inequitable
settlements and default judgments by making it
inconvenient for defendants to defend suits on their
merits”). These examples of what purposes “pervert” the
discovery and other litigation processes seem consistent
with the interpretation of the tort in Pennsylvania and we
are confident that the Supreme Court of Pennsylvania
would embrace them.
  We pause to add a note of caution. We recognize that
causing financial and emotional injury to, as well as
weakening the resolve of, opposing parties in the context of
ongoing litigation are somewhat nebulous concepts, and
when utilizing most litigation procedures an attorney is
                             16


aware of the possibility that his actions could have one of
these results. We do not, here, mean to predict that the
Supreme Court of Pennsylvania would allow for liability
simply because an attorney acts with these possibilities in
mind. Rather, the point of liability is reached when “the
utilization of the procedure for the purpose for which it was
designed becomes so lacking in justification as to lose its
legitimate function as a reasonably justifiable litigation
procedure.” 

. Only at that point
could the legal process be considered to have been
perverted.
  Turning to the Complaint at issue, it appears that the
thrust of GRC’s allegations comes close to laying out a
perversion of process. GRC avers that the “Fireman’s Fund
used the discovery and litigation process for purposes of
harassment and delay,” that “the abuse of process was
without reasonable basis, placed FFIC, Gilberg & Kiernan’s
and Mr. Butz’s financial interests above GRC’s interests
and was for the unlawful and improper purpose of avoiding
and delaying GRC’s right to recover under the Fireman’s
Fund Umbrella Policy,” and that “Fireman’s Fund, Gilberg
& Kiernan, and Mr. Butz conspired to . . . drain GRC’s
resources and delay the litigation.”
   From these general averments, we view GRC as alleging
that the defendants used “discovery and litigation process”
for five different purposes: harassment, draining resources,
delaying payment to GRC under the insurance policy,
delaying litigation, and avoiding payment to GRC under the
insurance policy. As evident from our previous discussion,
the first four purposes — harassment, draining resources,
delaying payment, and delaying litigation — that GRC
alleges that the defendants used “discovery and litigation
process” to achieve, if severe enough, could constitute
perversions of the legal process.
  The purpose of avoiding payment to the adverse party, on
the other hand, does not suffice to state an abuse of
process claim. If it did, any party who defended a lawsuit,
but eventually lost, could be liable for abuse of process.
Such allegations amount to exactly what the District Court
interpreted them to mean: the attorney appellees used
these tactics in an effort to succeed in the litigation. They
                             17


do not satisfy the requirement of pleading that a particular
legal process “was used for a purpose other than for which
[it] was intended.” 

. Allowing a party
to use the process in order to succeed in the litigation is an
end contemplated by most legal processes, and, certainly,
that goal does not pervert “discovery and litigation process.”
See 

(“[T]he lawsuit’s objective of
a money recovery cannot be the basis for abuse of process,
or a defendant would have a triable counterclaim, whenever
he was sued, by alleging the suit was groundless, and the
plaintiff knew it.”); accord Mozzochi v. Beck, 

,
174 (Conn. 1987) (dismissing a complaint for abuse of
process where the plaintiffs pled only that the defendants
acted “for an unlawful ulterior purpose, to wit: to inflict
injury upon the plaintiff and to enrich themselves and their
said client although they knew that their said lawsuit was
without merit”).
   Nevertheless, the allegations are too vague as they are
presented in the Complaint. The Complaint does not
contain the necessary allegations that legal processes were
not employed to achieve their intended purposes. The
purposes for which the attorney appellees used the various
legal processes are not specifically alleged as a part of the
abuse of process claim against the attorney appellees, but
only against Fireman’s Fund. The allegations against the
attorney appellees are more conclusory and general in
nature. While the purposes of draining resources and
delaying litigation likely would satisfy the perversion
element, GRC does not incorporate such allegations into its
abuse of process claim, but only makes such averments
under Count V — the “civil conspiracy” claim. While a court
must construe a complaint liberally, see Bald Eagle Area
School Dist. v. Keystone Financial, Inc., 

, 327
n.7 (3d Cir. 1999), it may not rewrite a plaintiff ’s
allegations. Therefore, the District Court did not err in
dismissing the Complaint because it fell short of making
the necessary allegations.
  The District did err, however, in refusing to grant leave to
amend. The District Court denied leave to amend on the
ground that the “factual allegations which Plaintiff proposes
to add to the Complaint in support of its abuse of process
                             18


claim would not be sufficient to state a claim upon which
relief may be granted.” However, the Court reached this
conclusion while under the misimpression that the abuse
must have a purpose unconnected to the litigation.
  A party generally should be permitted to amend a
complaint where if it did so it could state a claim. Shane v.
Fauver, 

, 115-16 (3d Cir. 2000). Federal Rule
of Civil Procedure 15(a) makes clear that leave to amend
“shall be freely given when justice so requires.” As the
District Court noted, however, where the amendment would
be futile a district court does not abuse its discretion in
denying leave to amend. In re NAHC, Inc. Sec. Litig., 

, 1332 (3d Cir. 2002). Other “grounds that could
justify a denial of leave to amend [include] undue delay,
bad faith, dilatory motive, [and] prejudice.” 

.
  In the motion for reconsideration, GRC sought leave to
“specifically state that the Defendants used the discovery
and motion practice to achieve a purpose that is not the
anticipated goal of each of these procedures.” Based on
reading the opinion of the Court of Common Pleas, we
conclude that GRC possibly could have cured any
deficiencies in its Complaint regarding the abuse of process
claim if allowed to amend. For instance, the Court of
Common Pleas said the following regarding the attorney
appellees’ actions in the insurance litigation:
    Under the guise of negotiation and compromise those
    few [attorneys] who employ “slash and burn” litigation,
    delay legitimate discovery requests, pretend to be
    cooperative, dissuade recourse to discovery court,
    blame their client for failings and make repeated
    promises, all the while keeping one eye vigilantly on
    the clock, awaiting the moment when they can pounce
    upon unsuspecting prey to claim unjustified protection
    by the passage of a deadline. Unfortunately, in the
    matter before the court, Fireman’s Fund Insurance
    Company through the action of their pro hac vice
    counsel has adopted this dysfunctional approach. In
    stark contrast to the vast number of attorneys in our
    court, a few lawyers have seized upon enforced
                             19


    deadlines as an opportunity to take unfair advantage of
    the reasonableness and civility of opposing.
General Refractories, 

at 161-62. The
findings of the Court of Common Pleas, as shown by this
excerpt and the one 

, seemingly show a
concerted and vicious effort orchestrated by the attorney
appellees and Fireman’s Fund to use various legal
processes as a club against GRC in the State Court
Litigation. We believe that GRC, if granted leave to amend,
could properly allege that the attorney appellees used a
legal process as a tactical weapon for an improper end not
otherwise the legitimate object of that process.

                             B.
  The attorney appellees present an alternative reason as to
why the District Court should have dismissed the
Complaint. They contend that it did not contain allegations
sufficient to satisfy the “use of a legal process” element of
an abuse of process claim, and that GRC could not cure
this defect. Although it is not entirely clear, the District
Court appears to have determined that the Complaint
sufficiently alleged a use of legal process. See General
Refractories, 

, at *4. We agree with the
District Court.
   In Pennsylvania, “ ‘[t]he word process as used in the tort
of abuse of process has been interpreted broadly, and
encompasses the entire range of procedures incident to the
litigation process,’ ” 

(quoting

), “including discovery proceedings,
the noticing of depositions and the issuing of subpoenas.”
Pellegrino Food Prods. Co., Inc. v. City of Warren, 136 F.
Supp. 2d 391, 407 (W.D. Pa. 2000) (citing 

); see also McGee, 

(finding meritless
petitions for stay, to open or strike judgment, and other
motions sufficient to establish abuse of process); 

(finding that petitions for stays in state
and bankruptcy courts, reconsideration of the denial of the
stay, an injunction, and to strike a confessed judgment, as
well as challenges before a zoning board, constitute “use of
a legal process” for purposes of an abuse of process claim).
                                 20


   While we agree that some of the alleged uses of legal
process, such as failing to comply with court orders, failing
to seek a stay, and failing to provide copies of subpoenaed
documents, as well as contacting the asbestos litigation
counsel, do not constitute use of a legal process for
purposes of an abuse of process claim, we disagree that the
Complaint does not contain any of the necessary
allegations. In fact, most of the allegations clearly involve
the use of the legal process. As the Superior Court stated
in Hart, 

: “The term ‘use,’ in the context of an
abuse of process claim requires that a party actively seek
and employ a legal process . . . .” 

GRC alleges,
for instance, that the attorney appellees filed various
motions in an effort to obstruct discovery, knowingly made
bogus claims of privilege in response to discovery requests,
hid documents, and made misrepresentations to opposing
counsel and the court. Construing it liberally as we must,
the Complaint clearly contains allegations that the attorney
appellees actively sought and employed legal processes.5
  Accordingly, the District Court abused its discretion in
denying GRC leave to amend its allegations of an abuse of
process.

                     III. Judicial Privilege
   The attorney appellees also contend that, regardless of
how we resolve the issues regarding the contours of the
abuse of process claim, leave to amend would be futile
given that the judicial privilege would insulate them from
liability. The District Court agreed with the attorney
appellees and held that their “response to discovery and
court filings in the Insurance Coverage Action are
absolutely privileged and, as such, cannot support a claim
for abuse of process.” General Refractories, 

, at *4. The District Court, however, interpreted the
judicial privilege too broadly.

5. Because we will remand this case to the District Court to allow GRC
to amend its abuse of process claim, we find it unnecessary to parse
each allegation contained in the Complaint to determine which
constitutes a “legal process.” Should the occasion arise, the District
Court should engage in that analysis in the first instance.
                              21


  The judicial privilege — often referred to, in Pennsylvania,
as “judicial immunity” — extends to “communications
which are issued in the regular course of judicial
proceedings and which are pertinent and material to the
redress or relief sought.” Post v. Mendel, 

, 353
(Pa. 1986); see also Binder v. Triangle Publ’ns, Inc., 

, 56 (Pa. 1971). As our court stated in a case that
required us to assess “judicial privilege” in the context of a
tortious interference claim:
    [T]he “privilege exists because there is a realm of
    communication essential to the exploration of legal
    claims that would be hindered were there not the
    protection afforded by the privilege.” Without the
    protection of the privilege for communications
    necessary to such exploration, access to the courts
    would be impaired, witnesses would be intimidated and
    lawyers’ efforts in pursuit of their clients causes would
    be chilled.
Silver v. Mendel, 

, 603 (3d Cir. 1990) (quoting

, 355 (Pa. 1986)); see also 

(stating that privilege is intended to allow “[a]
judge . . . free[dom] to administer the law without fear of
consequences” and is extended “to parties to afford freedom
of access to the courts, to witnesses to encourage their
complete and unintimidated testimony in court, and to
counsel to enable him to best represent his client’s
interests.”). Therefore, the privilege (1) only applies to
communications, and (2) does not apply to communications
not either “pertinent and material to the redress or relief
sought,” 

, or “essential to the
exploration of legal claims in litigation.” 

; see, e.g., 

(stating that there was
no immunity for an attorney’s statements about an
adversary made in a disparaging letter to the Disciplinary
Board because the statements were not made in the
pleadings, during argument in the case, or during trial, but,
rather, “took the form of an extrajudicial communication
which was issued during the course of trial”).
   GRC mainly argues that the judicial privilege cannot
possibly apply to these circumstances because “[i]t is
illogical on the one hand to say that discovery abuses and
                             22


filing frivolous motions can support an abuse of process
claim because those actions are incident to the litigation
process, and on the other hand to say that those actions
are absolutely privileged because they are communications
issued in the litigation process.” GRC’s argument has a
good deal of logical appeal. The mere existence of the abuse
of process tort is evidence that judicial privilege applies to
a much narrower range of activity than the attorney
appellees urge. Where judicial process is being perverted,
immunity would impede, not further, the interests
protected by the judicial privilege. See 

-04 (finding that judicial privilege does not apply to the
Pennsylvania statutory tort for wrongful use of civil
proceedings — the Dragonetti Act — because “Pennsylvania
would not have the Dragonetti Act if Pennsylvania’s judicial
privilege protected the filing of an action without probable
cause and primarily for a purpose other than to secure
relief ”).
   What is more, the gist of GRC’s Complaint is that the
attorney appellees acted in a way that abused process. That
is, GRC does not base its cause of action merely on
statements, but, rather, chiefly on conduct. While some
communications may be privileged — allowing, for instance,
immunity from defamation actions — conduct is clearly
susceptible to being punishable as abuse. See Brown v. Del.
Valley Transplant Program, 

, 1375 (Pa.
Super. Ct. 1988) (stressing that the “key” to “the absolute
privilege accorded an attorney in the representation of a
client in judicial proceedings . . . is whether the pertinent
communication was undertaken in connection with
representation of a client in a judicial proceeding”
(emphasis added)). There are few allegations in the
Complaint     pertaining    to   the    substance   of    any
communication. Moreover, the conduct criticized by the
court in the State Court Litigation would seem a dubious
candidate for the privilege as it was most probably not
essential to the exploration of claims.
  We are therefore convinced that GRC, in its amended
complaint, as in its original Complaint, could include
averments that the attorney appellees abused process in a
manner not protected by the judicial privilege. While the
                                    23


privilege does encompass statements made in court filings
and during argument and trial, see 

(holding that statements by a party, a witness, counsel, or
a judge cannot be the basis of a defamation action whether
they occur in the pleadings or in open court), the privilege
does not extend to either conduct or to other
communications neither “pertinent and material to the
redress or relief sought” nor “essential to the exploration of
legal claims in litigation.”
   We will not, however, examine the allegations of the
Complaint as it stands to determine whether the judicial
privilege applies, given our determination of the underlying
issue. Rather, on remand, the District Court can examine
the allegations in the amended complaint regarding
attorney appellees’ statements and determine whether those
allegations involved privileged communication.6

                        IV. Civil Conspiracy
   GRC also takes issue with the District Court’s dismissal
of its allegations that the attorney appellees and Fireman’s
Fund conspired to abuse process and violate the insurance
bad faith statute. In Pennsylvania, “to state a cause of
action for civil conspiracy, the following elements are
required: (1) a combination of two or more persons acting
with a common purpose to do an unlawful act or to do a
lawful act by unlawful means or for an unlawful purpose;
(2) an overt act done in pursuance of the common purpose;
and (3) actual legal damage.” Strickland v. Univ. of
Scranton, 

, 987-988 (Pa. Super. Ct. 1997)
(citation and internal quotations marks omitted) (cited in

6. In addition, on remand, the District Court should take note that an
attorney is liable for abuse of process only “when the acts complained of
are his own personal acts or acts of others wholly instigated and carried
on by him. An attorney cannot be liable for doing nothing more than
carrying out the process to its authorized conclusion.” 

; see also Adelman v. Rosenbaum, 

, 18 (Pa. Super. Ct.
1937) (discussing privilege and stating: “The plaintiffs’ evidence, accepted
by the jury, disclosed malice, and malicious action is not sheltered by
any privilege. . . . An attorney is personally liable to a third party when
he is guilty of . . . a malicious or tortious act. . . .).
                              24


Allegheny General Hosp. v. Philip Morris, Inc., 

,
446 (3d Cir. 2000)). The District Court held that the
“intracorporate conspiracy doctrine” immunized the
attorney appellees from the conspiracy. Under that theory,
an entity cannot conspire with one who acts as its agent.
Heffernan v. Hunter, 

, 413 (3d Cir. 1999)
(citation omitted). The District Court, relying exclusively on
our opinion in Heffernan, concluded that the Complaint
contained no allegation that the attorney appellees acted
outside the scope of their representation. General
Refractories, 

, at *6. As a result, the court
dismissed this claim, which GRC did not seek leave to
amend. On appeal, GRC argues that the situation here is
outside the intracorporate conspiracy doctrine because the
attorney appellees acted for “personal reasons.” We agree
with the District Court that Heffernan forecloses GRC’s
argument and will affirm this aspect of the Court’s ruling.
   In Heffernan, we analyzed the application of the
intracorporate conspiracy doctrine in the context of
attorney-client conspiracies under 42 U.S.C. § 1985(1) &
(2). 

. We stated that a conspiracy between a
corporation and an officer — there, also an attorney — may
exist only “if the officer is acting in a personal, as opposed
to official, capacity.” 

That is, an exception exists
“when the employees have acted for their sole personal
benefit.” 

noted, “[h]owever, [that] the mere
fact that attorneys have ‘mixed motives,’ such as
‘enhancing’ their reputation by aggressive representation,
does not remove their conduct from the scope of the
agency.” 

(citation omitted). Ultimately, we
concluded that, “because defendants acted within the
attorney-client relationship, they cannot be considered
conspirators.” 

In reaching this conclusion, we
emphasized that the policy reasons for applying the
intracorporate conspiracy ban are “even more compelling”
in the attorney-client context than in the “corporate field,”
given that “[c]ounsels’ conduct within the scope of
representation is regulated and enforced by disciplinary
bodies established by the courts.” 

; see also
Johnson v. Hills & Dales Gen. Hosp., 

, 840-41
(6th Cir. 1994) (holding that the hospital did not conspire
with its employees in violation of 42 U.S.C. § 1985 where
                              25


those employees      acted    within    the    scope     of      their
employment).
   GRC fails to point to any part of its Complaint containing
allegations that the attorney appellees acted outside of their
scope of representation, or allegations from which this even
could be inferred. Instead of pointing to where it argued
that the attorney appellees acted for personal reasons, GRC
argues that either the mere nature of the conduct of the
attorney appellees — which it refers to as “outrageous” —
or the attorney appellees’ illegitimate purpose, took their
conduct beyond the scope of the attorney-client
relationship. In Heffernan, however, we rejected a similar
argument, stating that “[t]he challenged activity may violate
the canons of ethics, but so long as it is within the scope
of representation, it does not eliminate the exemption from
a conspiracy charge . . . 

. Moreover, the
fact that the attorney appellees may have acted in bad faith
or with the illegitimate purpose of abusing process in mind,
does not, in itself, bring their actions outside the scope of
the attorney-client relationship. Such a proposition is
clearly not supportable. If we agreed with GRC that an
illegitimate purpose takes an agent’s or an attorney’s
actions outside the scope of the agency or representation,
we would be forced to exempt all illicit intracorporate
agreements from immunity; this exception, although
perhaps an appealing concept so as to deprive such illicit
agreements of protection, has no basis in the law.
Accordingly, the District Court properly dismissed this
claim.

                       V. Conclusion
  For the reasons stated above, we will affirm in part and
reverse in part, and remand to the District Court so that it
may grant GRC leave to amend its Complaint as to the
abuse of process claim.

A True Copy:
        Teste:

                   Clerk of the United States Court of Appeals
                               for the Third Circuit