2002 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-15-2002

US Express Lines Ltd v. Higgins

Precedential or Non-Precedential:

Docket 0-4205

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Recommended Citation

"US Express Lines Ltd v. Higgins" (2002). 2002 Decisions. Paper 128.

http://digitalcommons.law.villanova.edu/thirdcircuit_2002/128
Filed February 15, 2002 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-4205 

U.S. EXPRESS LINES, LTD.; BRENT NOYES, M.D.; LEO 

HAMILTON; LENORE MYERS; FRANCIS MYERS, H/W; 

MICHAEL PACOR; LLOYD FEIGENBAUM; LYNDA 

FEIGENBAUM, H/W; KENNETH DETATO; BRAD MOSES; 

MARY POSSI; ERIC N. RUBINO; THOMAS CRAWFORD; 

SUSAN M. SIMPSON; JOHN BURKE; GREGORY REPPA; 

LEO RASIS, M.D.; JEFFREY W. ALLEN; PATRICIA C. 

ALLEN; WARREN CONSTANTINE, JR., 

 Appellants 

v. 

ANN-MICHELE HIGGINS, ESQ.; RAWLE & HENDERSON; 

UNITED SHIPPING SERVICES THREE, INC.; UNITED 

SHIPPING SERVICES ONE, INC.; HACI ISMAIL 

KAPTANOGLU SHIP MANAGEMENT & TRADING CO., 

LTD.; HARRY G. MAHONEY, ESQ.; THOMAS C. 

SULLIVAN; DEASEY, MAHONEY & BENDER, LTD.; 

SUNRISE MARITIME INC; ZODIAC MARITIME AGENCIES, 

LTD.; A. ROBERT DEGEN, ESQ.; FOX, ROTHSCHILD, 

O'BRIEN & FRANKEL; TRADE SHIPPING MANAGEMENT, 

S.A.; LAURENCE SHTASEL, ESQ.; JEFFREY S. MOLLER, 

ESQ.; BLANK ROME COMISKY & MCCAULEY, 

 Appellees 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

(D.C. No. 99-cv-00992) 

District Judge: Honorable John R. Padova 

Argued November 26, 2001 

Before: ROTH, FUENTES and WEIS, Circuit Judges 
Filed February 15, 2002 

 Thomas S. Myers, Jr., Esquire 

 (ARGUED) 

 1800 East Lancaster Avenue 

 Paoli, Pennsylvania 19301 

 Vincent P. DiFabio, Esquire 

 Platt, DiGiorgio & DiFabio 

 1800 East Lancaster Avenue 

 Paoli, Pennsylvania 19301 

 Attorneys for Appellants 

 Robert B. White, Jr., Esquire 

 (ARGUED) 

 Law Offices of Robert B. White, Jr., 

 P.C. 

 1515 Market Street, Suite 1800 

 Philadelphia, Pennsylvania 19102 

 Jeffrey P. Lewis, Esquire 

 McKissock & Hoffman, P.C. 

 P.O. Box 3086 

 West Chester, Pennsylvania 19381 

 William H. Lamb, Esquire 

 Lamb, Windle & McErlane, PC 

 24 E. Market Street 

 West Chester, Pennsylvania 19381 

 Albert P. Massey, Jr., Esquire 

 Lentz, Cantor & Massey, Ltd. 

 Chester County Commons 

 20 Mystic Lane 

 Malvern, Pennsylvania 19355 

 Attorneys for Appellees 

 2 
OPINION OF THE COURT 

WEIS, Circuit Judge. 

In this appeal, we decide that the defendant lawyers' 

decision to invoke federal case law, rather than a 

procedural rule, in persuading a district judge to issue a 

maritime attachment does not give rise to a cause of action 

for malicious abuse of civil process under state law. The 

lawyers did not act in bad faith because they disclosed the 

existence of the alternative courses to the Court. We also 

conclude that the conflict between the procedural rule and 

the opinion of a United States Court of Appeals raises a 

federal question sufficient to support removal of the 

malicious abuse of process claim from the state court to the 

federal forum. We will affirm the District Court's judgment 

in favor of the defendants. 

Plaintiff U.S. Express Lines, Ltd. ("Express Lines") is a 

Pennsylvania corporation that chartered vessels from 

various shipowners to carry cargo for its customers. The 

company maintained its principal place of business in 

Paoli, Pennsylvania, within the Eastern District of

Pennsylvania. 

Express Lines had arranged financing through a line of 

credit from Founders Bank, secured by certificates of 

deposit purchased by the individual plaintiffs. When the 

company encountered cash flow problems in 1997, it began 

negotiating for further financial support from other 

institutions. In January 1998, it advised its creditors, 

including the defendant vessel owners, of the encouraging 

progress of its efforts. 

Nevertheless, on February 11, 1998, one of the vessel 

owners, through its counsel, defendant Ann-Michele 

Higgins of defendant law firm Rawle & Henderson, applied 

to the United States District Court for the Eastern District 

of Pennsylvania for the attachment of "all assets, goods, 

and chattels, belonging to" Express Lines. In seeking the 

attachments, the defendant attorneys cited as governing 

law an opinion of the Court of Appeals for the Eleventh 

 3 
Circuit, rather than the Supplemental Rules for Admiralty 

Claims. On February 17, 1998, the District Court ordered 

that the certificates of deposit at Founders Bank be 

attached. 

Other creditor vessel owners took similar action through 

their attorneys, defendants A. Robert Degen and the law 

firm of Fox, Rothschild, O'Brien, & Frankel, Ltd., Laurence 

Shtasel and Jeffrey S. Moller, both of defendant Blank 

Rome Comisky & McCauley, and Harry G. Mahoney and 

Thomas C. Sullivan, of the defendant law firm Deasey, 

Mahoney, & Bender, Ltd. As a result of these legal actions, 

Express Lines defaulted on its loan agreements and was 

forced to suspend and eventually cease its commercial 

operations. 

The District Court vacated the attachments on November 

5, 1998, concluding that its decision to depart from the 

restrictions imposed by Rule B of the Supplemental Rules 

for Certain Admiralty and Maritime Claims of the Federal 

Rules of Civil Procedure ("Supplemental Rule B") was in 

error. The Court then directed the parties to arbitration in 

accordance with the terms of the charter party, ordered 

that the assets that Founders Bank had deposited in an 

interpleader action remain in the Court's custody, and 

retained jurisdiction pending arbitration. 

On January 28, 1999, Express Lines and the individual 

owners of the certificates of deposit at Founders Bank filed 

suit in the Court of Common Pleas of Chester County, 

Pennsylvania, against the vessel owners and their various 

counsel. The complaint sought compensatory and punitive 

damages for abuse of process, conspiracy, wrongful use of 

civil proceedings, and other torts. 

Plaintiffs contend that defendants secured the writs of 

attachment in direct violation of Rule B, which precludes 

the seizure of maritime assets if the debtor is found within 

the district in which the litigation is commenced. They 

assert that defendants were well aware that Express Lines 

kept its principal office in the Eastern District of 

Pennsylvania and thus, they acted in bad faith in seeking 

attachments in that district. 

 4 
The defendant vessel owners were never served with 

process, and the claims against them were ultimately 

dismissed.1 The lawyer defendants removed the case to the 

District Court, and the plaintiffs moved to remand. The 

District Court refused, concluding that, based as it was on 

the issuance of maritime attachments, "[t]he federal 

element [of the litigation] cuts to the heart of each of 

Plaintiffs' claims" and, therefore, federal question 

jurisdiction existed. 

The District Court dismissed the case under Federal Rule 

of Civil Procedure 12(b)(6), holding that the defendant 

lawyers' actions were privileged because they had not 

misled the Court as to the underlying facts or relevant law 

in obtaining the attachment. The Court added that there 

had been no abuse of process in the defendants' use of 

maritime attachments to collect debts whose legitimacy 

plaintiffs did not contest. Because the writs had been 

issued with court authorization, the defendants had not 

acted in a grossly negligent manner or without probable 

cause. Accordingly, the Court held that the plaintiffs had 

failed to establish their state law claims. 

In this appeal, plaintiffs contend that the defendant 

attorneys misled the Court in securing the attachments, 

and that the efforts to obtain them were made in bad faith 

because the charter party required that disputes be

arbitrated. The plaintiffs also assert that the District Court 

erred in declining to remand the case to the state court. 

The defendants deny that they engaged in any deception 

and argue that the state law claims fail as a matter of law. 

Alternatively, they contend that because the challenged 

activity occurred in a federal court, no state cause of action 

may be applied to their conduct. Finally, defendants assert 

that because of an omission in the plaintiffs' notice of 

appeal, this Court lacks appellate jurisdiction. 

We exercise plenary review of the District Court's 

dismissal for failure to state a claim under Rule 12(b)(6). 

_________________________________________________________________ 

1. The plaintiffs have not contested the dismissal of the defendant 

shipowners and have treated this case as directed solely against the 

lawyers. We will do likewise. 

 5 
Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 

1261 (3d Cir. 1994). When considering a Rule 12(b)(6) 

motion, courts accept as true the allegations in the 

complaint and its attachments, as well as reasonable 

inferences construed in the light most favorable to the 

plaintiffs. Id. Although a district court may not consider 

matters extraneous to the pleadings, "a document integral 

to or explicitly relied upon in the complaint may be 

considered without converting the motion to dismiss into 

one for summary judgment." In re Burlington Coat Factory 

Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (internal 

quotations omitted); see also Pension Benefit Guar. Corp. v. 

White Consol. Indus., 998 F.2d 1192 (3d Cir. 1993) (matters 

of public record). 

We review de novo a district court's denial of remand. 

Angus v. Shiley Inc., 989 F.2d 142, 143 n.1 (3d Cir. 1993); 

see also Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 

(5th Cir. 1999). 

I. 

We first address jurisdictional issues. The plaintiffs' 

complaint alleges violations of state law. Because the 

parties are not diverse, our jurisdiction, as well as that of 

the District Court, must rest upon the existence of a federal 

question. 28 U.S.C. SS 1331, 1441(b). 

At the outset, we address an error in the defendants' 

brief that cites Lusardi v. Xerox Corp., 975 F.2d 964 (3d 

Cir. 1992), as dispositive of our appellate jurisdiction. 

Lusardi holds that, with certain exceptions not pertinent 

here, an appeal taken from a specified judgment or part of 

a specified judgment does not confer upon the court of 

appeals jurisdiction to review other judgments or portions 

not specified or inferred from the notice of appeal. 975 F.2d 

at 971-72. 

Defendants contend that because plaintiffs did not 

designate the order denying remand in their notice of 

appeal, we do not have authority to review that issue. This 

argument is oblivious to the duty of federal courts to 

examine their subject matter jurisdiction at all stages of the 

litigation sua sponte if the parties fail to raise the issue. 

 6 
That obligation extends to removal cases, as well as to 

those originally filed in the district courts. Meritcare Inc. v. 

St. Paul Mercury Ins. Co., 166 F.3d 214, 217 (3d Cir. 1999); 

Trent Realty Assocs. v. First Fed. Sav. & Loan Ass'n of 

Phila., 657 F.2d 29, 30 (3d Cir. 1981). Clearly, Lusardi is 

inapposite to the removal jurisdiction issue in this case. 

Any civil action brought in state court may be removed 

by the defendant to the federal district court in the district 

where such action is pending, if the district court would 

have original jurisdiction over the matter. 28 U.S.C. 

S 1441(a); Franchise Tax Bd. of Cal. v. Constr. Laborers 

Vacation Trust for S. Cal., 463 U.S. 1, 7-8 (1983). Where the 

parties are not diverse, removal is appropriate only if the 

case falls within the district court's original"federal 

question" jurisdiction: "all civil actions arising under the 

Constitution, laws, or treaties of the United States." 28 

U.S.C. SS 1331, 1441(b); Franchise Tax Bd., 463 U.S. at 8. 

In determining whether a case arises under federal law, 

courts are instructed to look to the plaintiff 's"well-pleaded 

complaint." Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 

804, 808 (1986). It is not enough that a federal question is 

or may be raised as a defense. Id.; Trent Realty, 657 F.2d 

at 33. "[T]he controversy must be disclosed upon the face of 

the complaint, unaided by the answer or by the petition for 

removal." Westmoreland Hosp. Ass'n v. Blue Cross of W. 

Pa., 605 F.2d 119, 122 (3d Cir. 1979) (quoting Gully v. First 

Nat'l Bank in Meridian, 299 U.S. 109, 113 (1936)). 

Attachments to the complaint are considered part of it. 

The state suit need not invoke a federal law in order to 

"arise under" it for removal purposes. It is sufficient that 

the merits of the litigation turn on a substantial federal 

issue that is "an element, and an essential one, of the 

plaintiff 's cause of action." Gully, 299 U.S. at 112. The 

controversy must be "genuine and present . . . not merely 

. . . conjectural." Id. at 113. In short, the federal law "must 

be in the forefront of the case and not collateral, peripheral, 

or remote." Merrell Dow, 478 U.S. at 813 n.11; see also 

United Jersey Banks v. Parell, 783 F.2d 360, 367 (3d Cir. 

1986) (no federal question existed because right to relief 

under state law did not require resolution of a substantial 

question of federal law). It need not, however, be a situation 

 7 
in which federal law completely preempts state law. See 

Goepel v. Nat'l Postal Mail Handlers Union, 36 F.3d 306 (3d 

Cir. 1994) (discussing "complete preemption" doctrine). 

The case before us does not involve the "artful pleading" 

doctrine, which requires a court to peer through what are 

ostensibly wholly state claims to discern the federal 

question lurking in the verbiage. See, e.g., United Jersey 

Banks, 783 F.2d at 367. The complaint filed in the state 

court is quite detailed and is augmented by numerous 

documents, such as the motions for attachment, the 

charter party, and the order attaching Express Lines' 

assets. The complaint and the documents affixed to it 

charge the defendants with malicious abuse of process in 

causing the District Court to override Rule B's restrictions 

in erroneous reliance on a Court of Appeals opinion. 

The plaintiffs argue that the mere fact that the property 

attachments were granted pursuant to maritime law is an 

inadequate basis for removal. They point out that under the 

saving to suitors clause, 28 U.S.C. S 1333(1), federal and 

state courts have concurrent jurisdiction in maritime 

matters. See Supplemental Rule B(1); Romero v. Int'l 

Terminal Operating Co., 358 U.S. 354 (1959); In re Dutile, 

935 F.2d 61, 62-63 (5th Cir. 1991); Furness Withy 

(Chartering), Inc., Panama v. World Energy Sys. Assocs., 

Inc., 854 F.2d 410, 411 n.1 (11th Cir. 1985). 

The saving to suitors clause "preserves alternatives of 

suing on the `law side' of the federal court or in state court, 

with admiralty and maritime law applied to the claim." 

George K. Walker, Supplemental, Pendent & Ancillary

Jurisdiction in Admiralty and Maritime Cases: The ALI 

Federal Judicial Code Revision Project and Admiralty 

Practice, 32 J. Mar. L. & Com. 567, 568 (2001); see also id. 

at 568 n.8 (listing cases); Lewis v. Lewis & Clark Marine, 

Inc., 531 U.S. 438, 444-45 (2001) (explaining that saving to 

suitors clause preserves concurrent jurisdiction of state 

courts over some admiralty and maritime claims); 14A 

Charles A. Wright et al., Fed. Prac. & Proc. S 3672, at 301- 

05 (3d ed. 1998). The plaintiffs' argument would carry 

weight if their state cause of action were a maritime one. 

But it is not; it is a claim for malicious use of process, a 

state tort not confined to admiralty. 

 8 
The Supreme Court, construing federal question 

jurisdiction in the removal context, has held that admiralty 

cases do not fall within the scope of 28 U.S.C.S 1441, 

which designates as appropriate for removal only those 

cases "arising under the Constitution, treaties or laws of 

the United States." Romero, 358 U.S. at 368-69. Thus, an 

admiralty case filed in state court may only be removed if 

there exists some independent basis for federal jurisdiction, 

such as diversity of citizenship. Id. at 380-381. We need not 

here discuss the logic or reasoning of Romero , which has 

spawned more than its share of commentary.2 It is enough 

for us to recognize its existence, because we conclude that 

it is not applicable. 

As we have noted, the removed case is not an admiralty 

action but one involving state tort law. Moreover, the 

federal question at the heart of this litigation is the 

applicability and construction of Supplemental Rule B. 

Although the Rule sets out procedures to be followed in 

maritime attachments, it is in fact part of the Federal Rules 

of Civil Procedure, adopted under the authority of the Rules 

Enabling Act, 28 U.S.C. S 2072. 

The Rules of Practice in Admiralty and Maritime Cases, 

which took effect in 1920, were rescinded as of July 1, 

1966. At that time, admiralty rules were merged into the 

Rules of Civil Procedure. This consolidation was similar to 

that which abolished the distinction between law and 

equity. 

_________________________________________________________________ 

2. See, e.g., Kenneth G. Engerrand, Removal and Remand of Admiralty 

Suits, 21 Tul. Mar. L.J. 383, 385 (1997) (discussing removal of admiralty 

cases and stating that "[d]espite the fact that the `congressional 

language 

. . . is perfectly understandable in ordinary English,' the determination 

whether admiralty cases can be removed has been affected by historical 

accident rather than traditional principles of statutory interpretation;" 

id. 

at 386-90 (explaining Romero's effect on federal question jurisdiction in 

admiralty claims); George Rutherglen, The Federal Rules for Admiralty 

and Maritime Cases: A Verdict of Quiescent Years, 27 J. Mar. L. & Com. 

581, 590-92 (1996) (discussing complexities in saving to suitors clause 

actions resulting from Romero); David J. Sharpe, The Future of Maritime 

Law in the Federal Courts: A Faculty Colloquium, 31 J. Mar. L. & Com. 

217, 232-34 (2000) (recognizing the confusion as to removal in 

admiralty). 

 9 
Since 1966, admiralty procedure has therefore been 

governed by the Federal Rules of Civil Procedure. All rules 

governing these procedures are recommended by the 

Advisory Committee on Civil Rules and adopted in 

accordance with the conventions of the Rules Enabling Act. 

Although Rule B delineates procedures that are particularly 

applicable to the unique features of maritime attachments, 

it is nonetheless an integral part of the Federal Rules of 

Civil Procedure. 

It is noteworthy that Romero was decided in 1959, prior 

to the consolidation of the admiralty and civil rules. Thus, 

any effect that Romero might have had on the construction 

of rules of admiralty procedure was abrogated by that 

consolidation. Support for this position is found in the 

language of the Rules Enabling Act itself, which provides 

that "[a]ll laws in conflict with such rules shall be of no 

further force or effect after such rules have taken effect." 28 

U.S.C. S 2072(b); see Henderson v. United States, 517 U.S. 

654 (1996) (holding that Fed. R. Civ. P. 4 superseded 

service provision in the Suits in Admiralty Act). 

At the heart of each of the plaintiffs' state law claims is 

the assertion that the defendants acted in bad faith by 

urging the District Court to disregard a federal rule of 

procedure, which would have barred the attachments, and 

to rely instead on case law, which permitted the seizures. 

The plaintiffs have thus alleged a substantial question of 

federal law involving an apparent clash between a 

procedural rule and a contrary holding by a United States 

Court of Appeals.3 Moreover, this conflict arises in the area 

of maritime attachments, a subject of particular concern to 

the federal courts, and one where national uniformity is of 

some importance. See Yamaha Motor Corp., U.S.A. v. 

Calhoun, 516 U.S. 199, 209-11 (1996) (discussing various 

contexts in which "vindication of maritime policies

_________________________________________________________________ 

3. That the federal question was an essential, and ultimately dispositive, 

element is demonstrated by the fact that were we to decide that 

Leonhardt, discussed infra, was the correct statement of the law, the 

plaintiffs' case could be dismissed on that basis alone. Moreover, 

Express Lines sustained its injury at the time the attachments were 

served and the assets seized. The District Court's decision vacating the 

attachments came too late to save the company. 

 10 
demanded uniform adherence to a federal rule of decision, 

with no leeway for variation or supplementation by state 

law."). Although not determinative, it is worth noting that 

this case also implicates the Federal Arbitration Act, 9 

U.S.C. S 1 et seq. 

Fundamentally, the plaintiffs argue that the Eleventh 

Circuit opinion is incorrect, and it is that allegedly 

erroneous interpretation of federal law upon which their 

state claim depends. Where a plaintiff 's complaint requires 

the juxtaposition of a court of appeals decision and an 

apparently conflicting procedural rule, the federal courts 

may properly claim jurisdiction. This is particularly so 

where, as here, the decision in controversy has not been 

overruled or reversed. The Eleventh Circuit opinion is a 

carefully reasoned exposition, concluding that Rule B does 

not limit admiralty's historic jurisdiction. The Court did not 

overlook Rule B, but analyzed it and found that its

restrictions did not apply. 

We are persuaded that in the unique circumstances here, 

the federal issue set forth in the complaint is an essential 

element of the plaintiffs' cause of action. Accordingly, the 

case was properly removed and the District Court did not 

err in denying the motion to remand. 

II. 

Having resolved the jurisdictional issue, we now consider 

the federal and pendent state claims on the merits. We 

invoke our discretion in choosing to first consider the 

federal defenses to the state suit. 

The fact that a federal question permits removal does not 

go so far as to support the defendants' contention that 

preemption applies. They argue that because the events 

complained of occurred in a federal court, the state claims 

are superseded and the plaintiffs are limited to the relief 

afforded by Federal Rule of Civil Procedure 11, 28 U.S.C. 

S 1927, and the inherent powers of a court as explicated in 

Chambers v. Nasco, Inc., 501 U.S. 32 (1991). 

Not surprisingly, the plaintiffs disagree. They rely on 

Pennsylvania's Dragonetti Act, 42 Pa. C.S.A.S 8351 et seq., 

 11 
and common law, both of which provide a cause of action 

for the wrongful use of civil proceedings. The Act 

establishes liability when "[a] person who takes part in the 

procurement, initiation or continuation of civil proceedings 

against another" acts "in a grossly negligent manner" or 

without probable cause and primarily for an improper 

purpose. Id. S 8351(a). A plaintiff may recover under the Act 

for harm resulting from interference with the advantageous 

use of land, chattels or other things, and other expenses 

which include reasonable attorneys' fees, harm to 

reputation, specific pecuniary loss resulting from the 

proceedings, emotional distress, and punitive damages. Id. 

S 8353. 

The recovery under Dragonetti can be more expansive

than the sanctions available under Rule 11, which are 

generally limited to counsel fees or fines, or counsel fees 

alone under 28 U.S.C. S 1927. Even assessments made

under the inherent power of the courts have not been held 

to cover such matters as consequential damages, loss to 

reputation, or emotional distress.4 

The breadth of the remedy provided by the state statute 

is a strong indication of its substantive nature. Under the 

Rules Enabling Act, 28 U.S.C. S 2072(b), procedural rules 

may not supplant substantive rights but the line between 

_________________________________________________________________ 

4. The damages that might be awarded for wrongful attachment have not 

been fully explored. Neither party has raised or briefed the preemption 

aspect in this context. A brief examination of the case law indicates that 

damages in this area, if awarded at all, generally consist of attorneys' 

fees, costs, and expenses "directly" attributable to the attachment. See 

Furness Withy (Chartering), Inc., Panama v. World Energy Sys. Assocs., 

Inc., 772 F.2d 802 (11th Cir. 1985) (no bad faith, therefore no damages 

awarded); Ocean Ship Supply, Ltd. v. MV Leah, 729 F.2d 971 (4th Cir. 

1984) (same); Frontera Fruit Co., Inc. v. Dowling, 91 F.2d 293 (5th Cir. 

1937) (same). See also Coastal Barge Corp. v. M/V Maritime Prosperity, 

901 F. Supp. 325 (M.D. Fla. 1994) (damages assessed included 

attorneys' fees and expenses, direct and derivative damages); State Bank 

& Trust Co. of Golden Meadow v. Boat "D.J. Griffin," 755 F. Supp. 1389 

(E.D. La. 1991) (attorney's fees and lost profits assessed). We have not 

encountered an award of such items as consequential damages, loss of 

reputation, or punitive damages that are available under the Dragonetti 

Act. 

 12 
procedure and substance is notoriously difficult to draw. In 

Burlington Northern Railway Co. v. Woods, 480 U.S. 1 

(1987), the Supreme Court held that "Rules which 

incidentally affect litigants' substantive rights do not 

violate" the Rules Enabling Act if they are "reasonably 

necessary to maintain the integrity of that system of rules." 

480 U.S. at 5 (emphasis added). 

Following that rationale, the Court later emphasized that 

Rule 11 was intended to deter frivolous suits in the district 

courts. Business Guides, Inc. v. Chromatic Communications 

Enters., Inc., 498 U.S. 533, 552-53 (1991). In pursuing that 

goal, courts can impose sanctions by way of attorneys' fees 

without reallocating the burdens of litigation, as prohibited 

by the American Rule set forth in Alyeska Pipeline Service 

Co. v. Wilderness Society, 421 U.S. 240 (1975). Id.

Business Guides also rejected the argument that "Rule 11 

creates a federal common law of malicious prosecution." 

498 U.S. at 553. Continuing, the Court stated, "[t]he main 

objective of the Rule is not to reward parties who are 

victimized by litigation," but to deter baseless filings. Id. 

Although it conceded that sanctioning a party might benefit 

its adversary, the Court was "confident that district courts 

will resist the temptation to use sanctions as substitutes 

for tort damages," id., and noted that in the event that a 

district court misapplied the Rule in a particular case, the 

error could be corrected on appeal. Id. at 554. Business 

Guides found no need for such a correction because there, 

the district court had properly declined to include

consequential damages in awarding attorneys' fees and outof-pocket expenses. Id. 

In Tarkowski v. County of Lake, 775 F.2d 173, 175 (7th 

Cir. 1985), the court held that the state tort law of 

malicious abuse of process applies to federal litigation as 

well. Our experience in this field has been limited, but two 

of our opinions that we will discuss support that holding. 

The Bankruptcy Code provides more extensive sanctions 

than those afforded by the Rules of Civil Procedure or 27 

U.S.C. S 1927. Section 303(i)(2) of the Code permits the 

assessment of damages -- including those of a punitive 

nature -- caused by a person who files a petition for 

 13 
involuntary bankruptcy in bad faith. 11 U.S.C. S 303(i)(2). 

Despite the broad scope of remedies available in the Code 

and the general exclusivity of the federal courts in 

bankruptcy, we have held that a state claim for malicious 

abuse of process was not preempted. Paradise Hotel Corp. 

v. Bank of Nova Scotia, 842 F.2d 47, 51-52 (3d Cir. 1988). 

In that case, we discovered that because of a gap in the 

text the Code failed to provide a remedy against a creditor 

that had improperly filed an involuntary petition for 

bankruptcy against a debtor. We concluded that Congress 

did not intend preemption to extend to the point of barring 

a debtor from the use of a state remedy.5 Id.; see also Silver 

v. Mendel, 894 F.2d 598 (3d Cir. 1990) (malicious filing of 

involuntary petition for bankruptcy not protected by 

judicial privilege). 

Our review of extant case law persuades us that the

Federal Rules of Civil Procedure do not preempt claims for 

abuse of process and similar torts providing relief for 

misconduct in federal litigation. Therefore, victims of such 

misconduct may, in appropriate circumstances, bring suit 

to recover damages under state causes of action. 

In a number of cases, district courts within this circuit 

have reached conflicting results on the preemption issue.6 

_________________________________________________________________ 

5. We recognize that the Court of Appeals for the Ninth Circuit has held 

that the Bankruptcy Code completely preempts state actions for 

malicious use of process, Gonzales v. Parks, 830 F.2d 1033 (9th Cir. 

1987), and is thus in tension with Paradise Hotel. 

6. Compare Mruz v. Caring, Inc., 39 F. Supp.2d 495 (D.N.J. 1999) 

(district court whose federal question jurisdiction has been invoked 

applies federal rather than state law on abuse of process), and Thomason 

v. Lehrer, 183 F.R.D. 161 (D.N.J. 1998) (federal court is exclusive forum 

to seek redress for litigation abuses committed in a federal suit), with 

Fumo v. Gallas, 2001 WL 115460 (E.D. Pa. Feb. 6, 2001) (federal law 

does not preempt state law claims), T.B. Proprietary Corp. v. Sposato 

Builders, Inc., 1996 WL 674016 (E.D. Pa. Nov. 20, 1996) (stating that 

neither Rule 11 nor 28 U.S.C. S 1927 preempts state law cause of action 

for abuse of process), Cannon v. Sheller, 825 F. Supp. 722 (E.D. Pa. 

1993) (Dragonetti Act not preempted by ERISA where action does not 

relate directly or indirectly to ERISA plan), and Plavin v. Bristol 

Borough, 

1988 WL 100814 (E.D. Pa. Sept. 27,1988) (recognizing that there is no 

federal tort of malicious prosecution, and state law reaches litigation 

abuses). 

 14 
We recognize that some of these courts have relied on 

legitimate public policy concerns in concluding that the 

federal rules foreclose state claims in the nature of abuse of 

process arising out of federal litigation. We also 

acknowledge that inevitably conflicts will arise between the 

federal rules and state substantive claims. 

Although federal preemption would forestall such 

controversies, the precepts of federalism and the 

congressional decision to restrict the sanctions available 

within the federal system militate against such a resolution 

of the problem. As in so many other overlapping areas of 

federal and state law, we must rely on the traditional 

comity between the two systems to deal adequately and 

innovatively with such common problems. 

III. 

Under Pennsylvania law, lawyers may be sued in their 

individual capacities for wrongful use of civil proceedings. 

E.g., Dietrich Indus., Inc. v. Abrams, 455 A.2d 119 (Pa. 

Super. 1982). That tort as applied in Pennsylvania 

conforms with section 674 of the Second Restatement of 

Torts. Rosenfield v. Pennsylvania Auto. Ins. Plan, 636 A.2d 

1138, 1141 (Pa. Super. 1994). The Dragonetti Act's 

definition of the tort is in agreement with that of the 

Restatement, Rosen v. American Bank of Rolla, 627 A.2d 

190, 192 (Pa. Super. 1993), and an attorney who knowingly 

prosecutes a groundless action to accomplish a malicious 

purpose may be held accountable under the Act. Elec. Lab. 

Supply Co. v. Cullen, 712 A.2d 304 (Pa. Super. 1998). 

Some distinction has been drawn between malicious use 

of process and abuse of process. Malicious use has to do 

with the wrongful initiation of civil process, as contrasted 

with abuse, which is concerned with perversion of process 

after litigation has begun. Dumont Television & Radio Corp. 

v. Franklin Elec. Co. of Phila., 154 A.2d 585, 587 (Pa. 1959). 

Whatever may have been the importance of that 

distinction before the Dragonetti Act was adopted, it 

appears that both torts are subsumed within the general 

scope of the Act, which includes persons who take part in 

the procurement, initiation or continuation of civil 

 15 
proceedings for wrongful purposes. 42 Pa. C.S.A.S 8351(a). 

Liability attaches to those who act in a grossly negligent 

manner or without probable cause and primarily for a 

purpose other than adjudication of a claim. Id . In addition, 

the proceeding must have been terminated in favor of the 

person who invokes the Act. Id. S 8351(a)(2). 

It may be seen that a party seeking redress under 

Dragonetti bears a heavy burden. Here, it is somewhat 

questionable whether the allegedly offending procedure was 

terminated in favor of the plaintiff. Although the 

attachments have been dissolved, the District Court, as 

noted earlier, retained jurisdiction pending arbitration. 

Thus, no final judgment has been entered in favor of the 

plaintiffs. Section 674(b) of the Restatement, however, 

makes an exception from the finality rule in ex parte 

proceedings. In view of the somewhat unusual status of the 

earlier litigation and in the interests of judicial economy, we 

will assume arguendo that we may, under state law, 

proceed to the merits because the ex parte attachment 

proceedings had been terminated in favor of the plaintiffs. 

The plaintiffs' first contention is that seeking maritime 

attachments, despite the arbitration clause in the charter 

party, demonstrated bad faith. This argument is utterly 

lacking in merit. The Federal Arbitration Act provides that 

in admiralty actions, "the party claiming to be aggrieved 

may begin his proceeding . . . by libel and seizure of the 

vessel or other property of the other party according to the 

usual course of admiralty proceedings, and the court shall 

then have jurisdiction to direct the parties to proceed with 

the arbitration . . . ." 9 U.S.C. S 8. 

Indeed, so fundamental is the right to attach that the 

parties cannot consent in advance to forego that remedy. In 

The Anaconda v. American Sugar Refining Co., 322 U.S. 42, 

43 (1944), the charter party provided for arbitration but 

specifically precluded application of section 8. Nevertheless, 

the aggrieved party began legal process by foreign 

attachment. The Supreme Court held that although the 

parties had agreed to arbitrate, the attachment remedy 

could be enforced. Id. at 45-46. See also Marine Transit 

Corp. v. Dreyfus, 284 U.S. 263, 275 (1932) ("By the express 

terms of S 8, the libel and seizure are authorized as an 

 16 
initial step in a proceeding to enforce the agreement for 

arbitration . . . ."). Clearly, the defendants in this case did 

not act in bad faith by carrying out procedures authorized 

by the Federal Arbitration Act. 

The plaintiffs next argue that the defendants, knowing 

that Federal Rule B did apply, nevertheless secured

the writs of attachment by improperly prevailing upon 

the District Court to follow the opinion in 

Schiffahartsgesellschaft Leonhardt & Co. v. A. Bottachi S.A. 

De Navegacion, 773 F.2d 1528 (11th Cir. 1985) (en banc). 

The District Court later released the attachments, believing 

that Rule B, rather than Leonhardt, provided the controlling 

law. The plaintiffs seize on this reversal by the District 

Court of its earlier ruling as evidence of the defendants' bad 

faith in misleading the court. 

We cannot accept the plaintiffs' argument. The Leonhardt 

opinion was written by a distinguished judge of the

Eleventh Circuit for an en banc court. The Court was fully 

aware of Rule B, but after reviewing the history of admiralty 

law determined that federal courts are empowered to apply 

maritime procedures as they existed at the time of the 

Constitution's adoption. Leonhardt, 773 F.2d at 1533. In 

the Court's view, Rule B was not intended to be the

exclusive source of maritime attachments available to the 

court, nor was it intended to limit or impair the traditional 

power of the court in exercising admiralty jurisdiction. Id. 

The defendants' motions for issuance of a writ of 

attachment stated, "This court has the power apart from 

Rule B to issue a maritime attachment" and cited 

Leonhardt. The defendants, therefore, did not misinform the 

District Court as to the interplay between Rule B and the 

Court of Appeals opinion. In announcing the decision to 

vacate the attachments, the District Judge acknowledged, 

"The Court may have been wrong but there was no 

deception on the Court." 

There is a paucity of case law on this particular point, 

and it reaches the point of absurdity to contend that 

competent attorneys were guilty of bad faith in urging the 

District Court to follow this respectable authority. The fact 

that the District Court later reversed its reliance on the 

 17 
Eleventh Circuit case and concluded that Rule B governed 

does not establish that the lawyers exercised bad judgment, 

let alone bad faith. Indeed, in a number of cases, Rule B 

has been attacked as being unconstitutional. See , e.g., 

Polar Shipping Ltd. v. Oriental Shipping Corp., 680 F.2d 627, 

642-45 (9th Cir. 1982) (Byrne, J., dissenting). 

We conclude that the plaintiffs have failed to establish 

bad faith as required under the Dragonetti Act and 

Pennsylvania common law. Accordingly, we affirm the

District Court's dismissal of the state law claims.

Having explored the background at length and concluded 

that the plaintiffs have not shown bad faith on the part of 

the defendants, we find it unnecessary to resolve the 

conflict between Leonhardt and Rule B. On the facts, the 

plaintiffs cannot recover under either version of the law. 

Consequently, we will affirm the District Court's dismissal 

of the entire case. 

The judgment of the District Court will be affirmed. 

 18 
FUENTES, Circuit Judge, dissenting: 

I respectfully dissent because, in my view, this case 

presents no federal element sufficient to confer 28 U.S.C. 

S 1441(b) "arising under" jurisdiction. Since this case was 

improperly removed to federal court, the District Court had 

no underlying jurisdiction to adjudicate the merits of 

Express Lines's action, and we are without appellate 

jurisdiction to address the merits of the appeal. I would 

agree with the Ninth Circuit, which held, under similar 

circumstances, that a previously dismissed federal action 

does not cause a subsequently filed state action for 

malicious prosecution to "arise under" federal law. See Berg 

v. Leason, 32 F.3d 422 (9th Cir. 1994). 

The majority concludes that the conflict between a federal 

procedural rule and an opinion of the Eleventh Circuit 

"raises a federal question sufficient to support removal of 

the malicious abuse of process claim from the state court 

to the federal forum." See Maj. Op. at 3. Express Lines's 

underlying state court action, however, was filed only after 

the federal action had been dismissed, and thus only after 

it was no longer necessary to resolve any conflict between 

Leonhardt and Rule B. As the majority notes, Leonhardt has 

not been overturned by the Eleventh Circuit. At best, it 

remains the jurisprudence of another circuit, and it is 

undisputed that it is simply not the law of this Circuit. To 

my knowledge, the only time Leonhardt has been invoked 

by any court in this Circuit was by the District Court in the 

underlying attachment action here. The District Court, as 

previously noted, ultimately rejected Leonhardt , and its own 

earlier reliance on it, and this decision has not been 

appealed by either party. Therefore, any purported conflict 

between Leonhardt and the Federal Rules does not present 

a sufficient federal question upon which to predicate 

jurisdiction. 

It is well settled that "[o]nly state-court actions that 

originally could have been filed in federal court may be 

removed to federal court by the defendant." Caterpillar Inc. 

v. Williams, 482 U.S. 386, 392 (1987) (citing 28 U.S.C. 

S 1441(a)). Additionally, we have held that the removal 

statute should be strictly construed against removal and 

that if there is any doubt as to the propriety of a removal, 

 19 
a case should not be removed to federal court. See, e.g., 

Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 

1990); Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 

(3d Cir. 1985). 

In considering a motion to remand where federal question 

jurisdiction is at issue, three recognized requirements must 

be satisfied: (1) the federal question must arise from a wellpleaded complaint, see, e.g., Rivet v. Regions Bank of 

Louisiana, 522 U.S. 470, 475 (1998); Westmoreland 

Hospital Ass'n v. Blue Cross of Western Pennsylvania , 605 

F.2d 119, 122 (3d Cir. 1979); (2) federal law must be an 

essential element of the plaintiff 's cause of action, see, e.g., 

Rivet, 522 U.S. at 475; and (3) the federal question must be 

substantial. See, e.g., City of Chicago v. International 

College of Surgeons, 522 U.S. 156, 164 (1997). I do not 

believe that any of these removal requirements were

satisfied in this case. 

1. The Well-Pleaded Complaint Rule 

As the Supreme Court has held on several occasions,

"[t]he presence or absence of federal-question jurisdiction is 

governed by the `well-pleaded complaint rule,' which 

provides that federal [question] jurisdiction exists only 

where a federal question is presented on the face of the 

plaintiff 's properly pleaded complaint." Caterpillar Inc., 482 

U.S. at 392. See also American National Red Cross v. S.G. 

and A.E., 505 U.S. 247, 258 (1992); Oklahoma Tax Com'n 

v. Graham, 489 U.S. 838, 840-41 (1989). Thus, the 

asserted federal question must arise from a well-pleaded 

complaint, and not from the answer, the petition for 

removal, or an actual or theorized defense. Under the wellpleaded complaint rule, if a complaint is premised upon 

state law, federal question jurisdiction may be established 

only if "some substantial, disputed question of federal law 

is a necessary element of one of the well-pleaded state 

claims," or that, due to complete preemption, the plaintiff 's 

claim is "really one of federal law." See Goepel v. National 

Postal Mail Handlers Union, a Division of Luna, 36 F.3d 

306, 310 (3d Cir. 1994) (internal quotations and citations 

omitted). Also, a state case may arise under federal law 

" `where the vindication of a right under state law

necessarily turn[s] on some construction of federal law.' " 

 20 
See Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 

U.S. 804, 808 (1986) (quoting Franchise Tax Board v. 

Construction Laborers Vacation Trust, 463 U.S. 1, 9 (1983)). 

"[T]he vast majority of the cases brought under the general 

federal question jurisdiction of the federal courts are those 

in which federal law creates the cause of action." Id. 

Here, however, none of Express Lines's causes of action 

were created by federal law, and nothing in the allegations 

Express Lines presented in its complaint calls for a 

resolution of any tension between the Eleventh Circuit's 

decision in Leonhardt and the Federal Rules. As previously 

noted, no genuine conflict exists in this Circuit between 

Leonhardt and the Federal Rules. To prevail in its case, 

Express Lines needs to show only that based upon what 

Defendants knew and believed, which are factual queries, 

they proffered Leonhardt without probable cause and for a 

purpose other than obtaining the proper adjudication of 

their claim. See 42 Pa. C.S.A. S 8351 (stating that "[a] 

person who takes part in the procurement, initiation or 

continuation of civil proceedings against another is subject 

to liability to the other for wrongful use of civil proceedings, 

. . . [if h]e acts in a grossly negligent manner or without 

probable cause and primarily for a purpose other than that 

of securing the proper discovery, joinder of parties or 

adjudication of the claim in which the proceedings are 

based . . ."); Silver v. Mendel, 894 F.2d 598, 603-04 (3d Cir. 

1990) (finding that, under the Dragonetti Act, the 

"imposition of liability for the wrongful use of civil 

proceedings [in Pennsylvania] occurs only when litigation is 

instituted both without probable cause and primarily for a 

purpose other than that of securing the proper adjudication 

of the claim in which the proceedings are based"). In other 

words, Express Lines needs to show only that Defendants 

acted either negligently or without probable cause, and 

without a proper purpose in proffering Leonhardt .1

Since no genuine conflict exists between Leonhardt and 

the Federal Rules in this Circuit, any legal assertions as to 

_________________________________________________________________ 

1. Since I do not believe we have the requisite jurisdiction to address 

this 

case on its merits, I will refrain from commenting on the strength of 

Express Lines's claims or evidence. 

 21 
the validity of Leonhardt, if made at all, would only properly 

be made by Defendants in their Answer or in their defense. 

Neither invocation, according to the Supreme Court, is 

adequate to confer federal question jurisdiction. 

2. The "Essential" Element Requirement 

In accordance with Supreme Court jurisprudence, federal 

law must be an essential element of a plaintiff 's cause of 

action in order to confer federal subject matter jurisdiction. 

The meaning of the "essential element" requirement is best 

stated in Hunter v. United Van Lines, 746 F.2d 635 (9th Cir. 

1984): 

 [A court must] determine whether the federal element 

 in the claim was "basic" as opposed to "collateral," and 

 "necessary" as opposed to "merely possible." . . . . 

 Similarly, courts have looked to whether the federal 

 element in the claim was "pivotal," . . . or"substantial," 

 . . . as opposed to merely "incidental[ ]," . . . or whether 

 it was "direct and essential" as opposed to 

 "attenuated," . . . or "paramount" as opposed to 

 "collateral," . . . . Thus, the resolution of the federal 

 question must play a significant role in the

 proceedings. 

Id. at 646 (internal citations omitted). Here, far from 

showing that a federal issue played a "significant role in the 

proceedings," the majority determined that it was 

"unnecessary" to resolve the issue asserted by Defendants 

as the basis for removal. See Maj. Op. at 18. That this case 

may be decided without resolving any alleged tension 

between Leonhardt and Rule B severely undermines the 

idea that this issue was essential to evaluating plaintiff 's 

claims. The majority correctly states that a federal issue 

sufficiently essential to invoke federal jurisdiction must be 

"genuine and present, [and] not merely . . . conjectural." 

See id. at 7 (citing Merrell Dow, 478 U.S. at 813-14 & n.11). 

Yet, it is difficult to understand how an issue could be any 

more conjectural or any less essential than one whose 

disposition is explicitly deemed "unnecessary." 

3. The "Substantial" Federal Question Requirement 

As the majority notes, the federal law present in a

properly removed case "must be in the forefront of the case 

 22 
and not collateral, peripheral, or remote." Yet from the 

outset, Express Lines's case was clearly comprised solely of 

state law claims, and the majority's ability to resolve this 

case without addressing the purported federal issue only 

highlights the fact that any federal issue in this case is 

"collateral, peripheral, or remote." 

Further, in Merrell Dow, the Supreme Court held that no 

substantial federal question existed where the plaintiff 

alleged a violation of a federal statute as an element of a 

state cause of action. The Court explained that"[we have] 

sometimes found that formally federal causes of action were 

not properly brought under federal-question jurisdiction 

because of the overwhelming predominance of state-law 

issues." Merrell Dow, 478 U.S. at 814 n. 12. Invoking an 

earlier ruling, the Court noted that "the violation of the 

federal standard as an element of state tort recovery did not 

fundamentally change the state tort nature of the action." 

Id. (citing Moore v. Chesapeake & Ohio R. Co., 291 U.S. 

205, 216-17 (1934)). The Court also noted that "S 1331 

[federal question] decisions can best be understood as an 

evaluation of the nature of the federal interest at stake." Id. 

(emphasis in original). 

Here, as in Merrell Dow, the state law nature of Express 

Lines's claims is fundamentally unchanged by the asserted 

tension between Leonhardt and the Federal Rules. There is 

also little, if any, cognizable federal interest in having a 

federal court in our Circuit assess the legitimacy of an 

Eleventh Circuit case whose viability is not an open issue 

anywhere in this Circuit. 

Following the guidance of Merrell Dow, the Ninth Circuit 

has held in a case very similar to ours that an underlying 

prior federal action does not render a fundamentally state 

law action cognizable in federal court. In Berg , the plaintiff 

brought a malicious prosecution action in state court after 

successfully defending himself in a federal court proceeding 

in which he was accused of violating federal securities and 

racketeering laws. The defendant removed to federal court, 

and the District Court denied the plaintiff 's Motion to 

Remand. On appeal, the Ninth Circuit held that "the federal 

element is insufficiently substantial to confer`arising under' 

jurisdiction because the malicious prosecution court need 

 23 
only decide whether the underlying claim was `legally 

tenable[;]' the cause of action is created by state law, and 

state law controls the standard by which the strength of the 

federal claim in the underlying action is measured." Berg, 

132 F.3d at 423. The Ninth Circuit elaborated that"federal 

law cannot be controlling when the degree of substance in 

the federal claim necessary to trigger the state-law cause of 

action is a question of state law." Id. at 425. Ultimately, 

then, "federal law is not dispositive because the degree of 

strength required to put the underlying claim over the 

probable cause threshold is determined by state law." Id. 

The same conclusion applies here. 

In examining the state law elements of the plaintiff 's 

claim, the Ninth Circuit noted that, far from the case 

requiring a legal resolution of federal questions,"[a] 

factfinder must determine what the defendant knew or 

believed about the facts." Id. Similarly, here, the subjective 

beliefs, purpose, and purported bad faith of the Defendants 

are at issue, and "the court looks at the merits of a claim 

for malicious prosecution through the prism of state law." 

Id. 

This case only asks whether Defendants' underlying 

claim, that Leonhardt could trump the Federal Rules, was 

legally viable enough to have been asserted legitimately and 

not in contravention of the Dragonetti Act. Express Lines's 

case presents no real or substantial question of federal law 

that compels resolution in a federal court. Rather, their 

case was, from the outset, a state case that was properly 

brought in state court originally. 

For the aforementioned reasons, I would find that this 

case was improperly removed to federal court, that the 

District Court had no underlying jurisdiction to adjudicate 

the merits of Express Lines's claim, and that we are thus 

without appellate jurisdiction to entertain this appeal. I 

respectfully dissent. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 24