SNEED, Circuit Judge:
Of the many consequences of the failure of Lincoln Savings and Loan and its parent, American Continental Corporation, the litigation that produced these consolidated appeals was just one. At the heart of these appeals is a suit by Lexeeon Inc. against a number of the attorneys who represented the consolidated class of investors who lost money in the collapse of Lincoln Savings and its parent. Lexeeon is a law and economies consulting firm that frequently serves as a defense expert in securities class actions prosecuted by the law firms that are defendants here. Lexeeon had prepared several reports for Lincoln Savings and American Continental, and consequently became a target of the class’ claims. In due course these claims were resolved. Thereafter Lexeeon and its principal, Professor Daniel R. Fischel of the University of Chicago Law School, brought an action for, inter aha, malicious prosecution and defamation in federal district court for the Northern District of Illinois against several of the class attorneys— Milberg Weiss Bershad Hynes & Lerach and affiliated attorneys (“Milberg Weiss”), and Cotchett Illston & Pitre and affiliated attorneys (“Cotchett”).1 The underlying theory is that Milberg Weiss and Cotchett wrongfully dragged Lexeeon into the Lincoln Savings litigation to satisfy a personal vendetta against Lexeeon and Fischel. The Judicial Panel on Multidistrict Litigation (“JPML”) transferred this case to the District of Arizona and assigned it to Judge John M. Roll.
The resolution of Lexecon’s claims in Judge Roll’s court generally was unfavorable, as were its rulings on Milberg Weiss’ counterattacks. These have resulted in four appeals to this court which have been consolidated.
In No. 95-16595, Lexeeon appeals the adverse judgment on its malicious prosecution and abuse of process claims and the denial of its motion for leave to amend, as well as the denial of its motion to remand the case to Illinois. In No. 95-16403, Lexeeon appeals from the final judgment in favor of the Cotchett defendants.
Milberg Weiss appeals, in No. 95-15759, the district court’s denial of its efforts to obtain injunctive relief against Lexeeon’s prosecution of its claims, and, in No. 95-16754, the dismissal of its counterclaims against Lexeeon.
We have jurisdiction under 28 U.S.C. § 1291, and we affirm the judgments of the district court.
I.
SOURCES OF THIS LITIGATION
Following the collapse of Lincoln Savings, investors residing in many districts of the federal judicial system brought actions charging violations of federal securities laws and RICO. In due course, these cases were transferred to the District of Arizona, consolidated into MDL 834 (sometimes designated as “Shields ” or “Lincoln Savings ”) and assigned to Judge Richard Bilby.
As early as 1990, the consolidated plaintiff class, now represented by (among others) [1529]*1529Milberg Weiss and Cotchett, sought to add Lexecon and Fischel as defendants by filing a fifth amended complaint. Judge Bilby denied their motion to do so without .prejudice. In February 1991, Judge Bilby granted the class’ motion to file a sixth amended complaint, which added only Lexecon as a defendant, and alleged that:
during 1987 and 1988 defendant Lexecon was engaged by ACC/Lincoln to perform services, including writing reports advocating the safeness of Lincoln’s operations and the value of ACC/Lincoln’s assets which were submitted to federal and state regulators in order to persuade them not to take regulatory action adverse to Lincoln.
Following a period of discovery, Lexecon’s motion for summary judgment was denied. See In re American Continental Corp./Lincoln S & L Sec. Litig., 794 F.Supp. 1424, 1448-49 (D.Ariz.1992). Judge Bilby found there existed material issues as to whether Lexeeon’s reports were false and misleading, and whether Lexecon possessed reckless scienter as to Lincoln’s fraudulent activities. In March 1992, the trial commenced. Almost four months later, and shortly before the close of evidence, Lexecon moved for a directed verdict. Judge Bilby denied the motion, again finding a jury question as to the level of Lexecon’s knowledge of, and involvement in, Lincoln Savings’ actions and practices.
On June 22, 1992, the class attorneys and Lexecon’s counsel met in Judge Bilby’s chambers to consider a means by which Lex-econ’s exposure to a jury verdict could be resolved without harmful consequences to its professional credibility and reputation. In furtherance of this end, Lexecon urged that any agreement that might be reached not be designated a “settlement.” To accommodate Lexeeon’s concern, the term “resolution” was adopted. The terms of the resolution provided: First, that the court would enter an order dismissing Lexecon without prejudice; second, that the parties would sign a stipulation dismissing Lexecon with prejudice, which stipulation would be held by Judge Bilby to be entered on the court’s record only if a new suit was initiated against Lexecon on the same claims; and, third, that Lexecon would provide class services as a subcontractor to Touche Ross who, as another defendant in MDL 834, had settled its liability for $7.5 million. The resolution also placed restrictions on class counsel’s ability to cross-examine Lexecon experts in future lawsuits about Lexecon’s involvement in MDL 834.
This unusual arrangement was implemented, although because of disagreements between Lexecon and class counsel, Lexecon discharged its obligations by turning over to the class the approximately $700,000 it had received in professional fees from Lincoln Savings and American Continental, rather than performing the class services. This discharge was accomplished in October 1992.
Those who then thought that the concerns of Lexecon had been relieved were wrong. On November 25, 1992, Lexecon filed in the Northern District of Illinois (Lexecon’s home state) the action now before us on appeal. The complaint set forth claims for malicious prosecution, abuse of process, tortious interference, defamation, and common law and statutory commercial disparagement. In June 1993, the JPML transferred the case to the District of Arizona for consolidation with MDL 834, and assigned it to Judge Roll because Judge Bilby had recused himself.
Judge Bilby’s recusal obviously resulted in part from his reaction on learning of Lexe-con’s suit in Illinois. He arranged a telephonic hearing held on December 7, 1992, and therein charged Lexecon with what he viewed as its incorrect portrayal of the resolution of its role as a defendant in MDL 834. Following this hearing and the submission of letter briefs by the parties, Judge Bilby placed an order in the record of MDL 834 in which he found portions of Lexecon’s Illinois complaint to be “a false description of the conditions under which Lexecon was dismissed from this case.”2 The key portions [1530]*1530of his order disputed Lexecon’s characterization of its payment to the Lincoln Savings class as “voluntary,” and of the resolution as a termination of the litigation in Lexecon’s favor:
The Class Plaintiffs/Lexecon resolution was a bargained-for exchange wherein consideration flowed both ways.
Moreover, under no circumstances was the Class Plaintiffs/Lexecon compromise a resolution in favor of either party or, more importantly, an adjudication on the merits. Instead, it was a bargained-for resolution of a disputed matter from which both parties benefited.
Lexecon’s attempt to appeal this order to this court failed because there was as yet no final judgment in MDL 834. Lexecon took no appeal from the final judgment subsequently entered in March 1994.
Meanwhile, Judge Roll had begun his work on the case. In November 1993 he dismissed Lexecon’s malicious prosecution and abuse of process claims. In re American Continental Corp./Lincoln S & L Sec. Litig., 845 F.Supp. 1377, 1383-86 (D.Ariz.1993). All the defendants in this ease then answered, and Mil-berg Weiss filed counterclaims for breach of contract, fraud, unjust enrichment, and promissory estoppel. Discovery proceeded, [1531]*1531followed by the defendants’ motions for summary judgment.
In March 1994, before Judge Roll resolved the summary judgment motions, final judgment was entered in MDL 834. Lexecon thereupon moved under 28 U.S.C. § 1407 for a remand of its case to the Northern District of Illinois. Judge Roll instructed Lexecon to renew this motion after the close of discovery, which Lexecon did in November 1994. In response, Milberg Weiss moved to make the transfer to Arizona permanent under 28 U.S.C. §§ 1404(a) and 1406, and additionally moved for preliminary and permanent injunctions against the pursuit of this action, as well as all other claims made by Lexecon. Judge Roll denied the latter motion, and Milberg Weiss appealed. No. 95-15759.
Prior to ruling on the remand and transfer motions, Judge Roll granted summary judgment against Lexecon on its claims of tortious interference, commercial disparagement, and defamation based on the dissemination of Milberg Weiss’ sixth amended complaint. In re American Continental/Lincoln S & L Sec. Litig., 884 F.Supp. 1388 (D Ariz. 1995). Lexecon’s defamation claim based on a sentence in a letter written by a Milberg Weiss partner, Kevin P. Roddy, to, and which appeared in, The National Law Journal, survived. Judge Roll also dismissed Milberg Weiss’ counterclaims. Id. at 1397. Because the Cotchett defendants, who were never Lexeeon’s principal target in this litigation, had no part in the Roddy letter, Judge Roll entered a final judgment in their favor pursuant to Fed.R.Civ.P. 54(b). Lexe-con timely appealed that judgment. No. 95-16403.
Thereafter, Judge Roll entered an order denying Lexecon’s motion to return the case to the JPML for remand to the Northern District of Illinois, and granting the Milberg Weiss motion to make the transfer to the District of Arizona permanent. Lexecon appealed the remand and transfer decision to this court by means of a petition for writ of mandamus, which was denied without prejudice as to Lexecon’s raising the issue on direct appeal.
The climactic event in Judge Roll’s court occurred on July 25-28, 1995, when Lexe-con’s defamation claim based on the Roddy letter to The National Law Journal was tried to a jury. The jury verdict favored Milberg Weiss. Lexecon appealed the subsequently entered final judgment, in particular the district court’s transfer order and its dismissal of Lexeeon’s malicious prosecution and abuse of process claims. No. 95-16595. Milberg Weiss cross-appealed the dismissal of its counterclaims. No. 95-16754.
The order in which this court will address the issues before us on this appeal is as follows:
1. The permanent transfer of Lexeeon’s case from the Northern District of Illinois to the District of Arizona.
2. The denial of Milberg Weiss’ motion for preliminary and permanent injunctions against the pursuit by Lexecon of its claims against Milberg Weiss and Cotchett.
3. The dismissal of Lexecon’s malicious prosecution and abuse of process claims.
4. The dismissal of Milberg Weiss’ counterclaims.
II.
THE PERMANENT TRANSFER TO THE DISTRICT OF ARIZONA
Nos. 95-16595 and 95-16403
The JPML transferred Lexecon’s action to the District of Arizona pursuant to its authority under 28 U.S.C. § 1407(a), which states:
When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section_ Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated])]
The decision of the court below to transfer Lexecon’s sole surviving claim to itself for [1532]*1532trial, and its refusal to refer the case to the JPML for remand to Illinois, are vigorously challenged by Lexecon-and not for the first time.
Prior to the trial on the defamation claim, Lexecon brought before this court a petition for a writ of mandamus seeking: (1) to vacate the district court’s order permanently transferring the remaining claim to the District of Arizona; and (2) to direct the district court to refer the ease to the JPML for remand to the Northern District of Illinois. In an unpublished disposition, this court denied the petition and, while recognizing that Lexecon’s arguments based on 28 U.S.C. §§ 1407 and 1404(a) might not lack merit, pointed out that they were contrary to existing case law and Multidistrict Litigation Rule 14(b). We explicitly recognized that the issue could be raised in an appeal on the merits. The dissent vigorously argued that 28 U.S.C. § 1407(a) authorizes the JPML to transfer a case for pretrial proceedings only, precluding a section 1404(a) transfer for a trial on the merits by the transferee court to itself, and that Multidistrict Litigation Rule 14(b) lacks a statutory basis. We now revisit these issues.
We review the district court’s transfer under 28 U.S.C. § 1404(a) for an abuse of discretion. Lou v. Belzberg, 834 F.2d 730, 734 (9th Cir.1987), cert. denied, 485 U.S. 993, 108 S.Ct. 1302, 99 L.Ed.2d 512 (1988). We review de novo the district court’s interpretation of its duties under 28 U.S.C. § 1407. Monrad v. FDIC, 62 F.3d 1169, 1171 (9th Cir.1995).
A. Authority for the Section ll^Olpfa) Transfer
The power of a section 1407 transferee court to transfer a case to itself for trial has been recognized, explicitly or implicitly, by the courts that have considered the issue.3 Patricia D. Howard, the Clerk of the JPML, has stated:
Although the Panel’s power for the most part is limited to transfer for pretrial only, it is not uncommon for a transferee judge assigned by the Panel to transfer to his own or another district under 28 U.S.C. §§ 1404(a) or 1406 the actions which were previously assigned to him or her by the Panel under Section 1407.4
Permitting the transferee court to transfer a case to itself upon completion of its pretrial work often promotes efficiency in the disposition of the case or cases.5 The time required for a new judge to become acquainted with the litigation is eliminated, as is the possibility of conflicting or duplicative rulings and proceedings. The above reasons strongly favored trial by the transferee court in this case, where pretrial proceedings left only one claim to be resolved by a trial that was scheduled to begin immediately and conclude in four days.
Moreover, the transferee court is empowered to dispose of the cases transferred to it by means of summary judgment or [1533]*1533dismissal.6 Therefore, logic supports its ability to dispose of the case, at least under the circumstances present here, by trial.
Despite longstanding practice and the efficiency arguments, Lexecon argues that 28 U.S.C. § 1407(a) requires remand for trial. The provision states in relevant part:
Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated (emphasis added).
Equally specific is JPML R. 14(b), promulgated under the authority granted the JPML by 28 U.S.C. § 1407(f):
Each transferred action that has not been terminated in the transferee district court shall be remanded by the Panel to the transferor district for trial, unless ordered transferred by the transferee judge to the transferee or other district under 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406.
This conflict between statute and rule, while apparent, is not real.7 Congress in enacting section 1407 in 1968 was concerned with the emerging phenomenon of complex, multidistrict litigation. Its focus was upon creating and defining the functions of the JPML, not on redefining or circumscribing the traditional powers of the district court to which a case has been transferred. This is made reasonably clear by the House Report accompanying the proposed statute; that report stated that the bill “affects only the pretrial stages in multidistrict litigation. It would not affect the place of trial in any case or exclude the possibility of transfer under other Federal statutes.” H.Rep. No. 1130, 90th Cong., 2d Sess. 3, reprinted in 1968 U.S.C.C.A.N. 1898, 1900. The report continued, id. at 1901-02:
The subsection requires that transferred cases be remanded to the originating district at the close of coordinated pretrial proceedings. The bill does not, therefore, include the trial of cases in the consolidated proceedings. The experience of the Coordinating Committee [for Multiple Litigation of the U.S. District Courts, established by the Judicial Conference of the United States] was limited to pretrial matters, and the committee consequently considers it desirable to keep this legislative proposal within the confines of that experi-ence_ Of course, 28 U.S.C. 1404, providing for changes of venue generally, is available in those instances where transfer of a case for all purposes is desirable.
Thus, Congress, because of the nation’s limited experience with multidistrict litigation, sought to design only the powers and duties of its new creation, the JPML. Despite some uncertainty about this matter initially, the power of the transferee court to transfer a case to itself for trial has been reinforced by its consistent recognition in practice. Recourse to such sustained prac[1534]*1534tice, particularly when approved by the JPML, is a legitimate aid to statutory interpretation. See United States v. American Trucking Ass’n, 310 U.S. 534, 549, 60 S.Ct. 1059, 1067, 84 L.Ed. 1345 (1940). In the case before us, this reading also strongly promotes judicial efficiency, which was a primary purpose of the legislation that created the JPML. See H.Rep. at 2, 1968 U.S.C.C.A.N. at 1899.
B. The Procedures Available to Initiate Remand
Additional insight into the apparently mandatory language of 28 U.S.C. § 1407(a) is provided by JPML Rule 14(c). That rule imposes the duty on the JPML to:
consider remand of each transferred action ... at or before the conclusion of coordinated or consolidated pretrial proceedings on (i) motion of any party, (ii) suggestion of the transferee district court, or (iii) the Panel’s own initiative[.]
The absence of any such “motion” by a party, “suggestion” by the transferee court, or “initiative” of the Panel appears to leave the case in the care of the transferee court. Under these circumstances the transferee court must complete the litigation, even if it involves a trial, to avoid the absurdity of indefinitely suspended litigation, the pretrial proceedings of which have come to a close. Therefore, where the transferee court has declined to suggest a remand, the JPML has not ordered a remand on its own initiative, and the litigant has failed to seek a remand before the JPML, the transferee court is entitled to terminate the proceedings by conducting the trial. Besides setting out a procedure by which the JPML’s duty to remand is triggered, this rule thus gives effect to the final clause of section 1407(a) by rendering its mandatory clause inoperative where the action has been terminated, even by trial.
That is the precise position in which the case rests in this appeal. The JPML’s duty to remand was not activated. To repeat, the trigger to such activation was never pulled. Neither the district court nor the JPML sought to remand the case. Moreover, Lexecon, in lieu of moving the JPML for a remand, brought its motion before the district court, and now appeals to us for a remedy. Neither this procedure, nor its earlier petition for a writ of mandamus, amounts to a motion for remand brought before the JPML. Lexecon failed to seek succor from the one source that easily could have granted it if it so chose.8 The district court, therefore, properly proceeded to conduct a trial on the single remaining defamation claim, following the completion of the pretrial proceedings.
C. Propriety of the Section lkOh(a) Transfer
Besides arguing that the district court’s transfer to itself was without authority by virtue of section 1407, Lexecon also argues that it was improper under section 1404(a). Lexecon argues that any incremental gain in efficiency was at its expense, and that it was prejudiced by being dragged from Chicago, Illinois, to Arizona and forced to appear before Judge Roll, who was unfamiliar with MDL 834 and who improperly proceeded to “dismantle” its case. We disagree.
Lexecon, to put it gently, was no stranger to the District of Arizona; its participation in MDL 834 precludes any such claim. Moreover, Judge Roll had become quite familiar with the case by the time of his decision to transfer the trial of the defamation claim to his own district. Finally, Judge Roll’s dismissal of most of Lexecon’s claims is not a ground for showing prejudice.
After a careful examination of the record and consideration of the arguments, we find no reason to question the district court’s authority to try Lexecon’s defamation claim [1535]*1535in the District of Arizona, or the fairness of doing so.
III.
THE DENIAL OF INJUNCTIVE RELIEF SOUGHT BY MILBERG WEISS
No. 95-15759
After final judgment was entered in MDL 834 and Lexecon renewed its motion for a suggestion of remand, Milberg Weiss sought injunctive relief on the ground that the final judgment was res judicata as to Lexeeon’s claims. Milberg Weiss requested:
(1) an order preliminarily enjoining plaintiffs ... from prosecuting or otherwise pursuing against the Milberg Defendants, in any other judicial district or forum, any claims or other matters that were raised or could have been raised in the Lincoln Savings action ...; and (2) an order permanently enjoining plaintiffs from prosecuting or otherwise pursuing those claims or other matters in any court or forum.
The district court concluded that Lexecoris claims were not precluded, and denied the motion.
We must uphold the denial of injunctive relief “unless the court incorrectly applied the law, relied on clearly erroneous factual findings, or otherwise abused its discretion.” Contract Serv. Network, Inc. v. Aubry, 62 F.3d 294, 297 (9th Cir.1995). We review de novo issues of law underlying the denial, including the determination that Lexecoris claims were not barred by res judicata. Id. We now affirm.
A. Mootness
Initially, we confront the issue raised by Lexecon of the mootness of this appeal.9 An appeal is moot “when events occur which prevent the appellate court from granting any effective relief even if the dispute is decided in favor of the appellant.” Holloway v. United States, 789 F.2d 1372, 1373 (9th Cir.1986) (internal quotation omitted). To the extent that Milberg Weiss sought to have the district court enjoin the litigation before the district court, which thereafter was completed favorably to Mil-berg Weiss by the entry of final judgment, its appeal from the court’s failure to do so is moot. However, mootness does not extend to the efforts of Milberg Weiss to enjoin Lexecon from prosecuting its claims in other courts.
B. Res Judicata
Milberg Weiss supports its effort to enjoin Lexecon by arguing that the MDL 834 litigation foreclosed Lexecoris claims by reason of res judicata. This considerably overstates the preclusive effect of Judge Bilby’s actions.
Under the doctrine of res judicata, “[a] final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 2427-28, 69L.Ed.2d. 103 (1981). Judge Bilby’s action pertaining to Lexecon was to dismiss the claims of the class against Lexecon without prejudice, in accordance with the parties’ resolution. We have held that a dismissal without prejudice lacks res judicata effect. In re Corey, 892 F.2d 829, 835 (9th Cir.1989), cert. denied, 498 U.S. 815, 111 S.Ct. 56, 112 L.Ed.2d 31 (1990). Nor was Judge Bilby’s subsequent order of December 31, 1992 (see supra n. 2), a judgment on the merits of the claims against Lexecon. That order merely clarified the terms of the resolution, indeed emphasized that there had been no judgment on the merits of the claims against Lexecon.
Lexecoris reliance on Western Sys., Inc. v. Ulloa, 958 F.2d 864 (9th Cir.1992), cert. denied, 506 U.S. 1050, 113 S.Ct. 970, 122 L.Ed.2d 125 (1993), and Golden v. Pacific Maritime Ass’n, 786 F.2d 1425 (9th Cir. 1986), is therefore misplaced. Those cases develop the relitigation exception to the [1536]*1536Anti-Injunction Act, which allows a district court to enjoin litigation in other courts if such litigation is barred by res judicata.10 Because Lexeeon’s claims are not barred by res judicata, those cases are not controlling.
C. The Requirements for Injunctive Relief
Even if Lexecon’s claims were barred by res judicata, Milberg Weiss has still failed to show that the district court abused its discretion in declining to grant injunctive relief. To obtain a preliminary injunction, a party must show either “(1) a likelihood of success on the merits and the possibility of irreparable injury; or (2) the existence of serious questions going to the merits and the balance of hardships tipping in the movant’s favor.” MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 516 (9th Cir.1998) (internal quotation omitted), cert. dismissed, 510 U.S. 1033, 114 S.Ct. 671, 126 L.Ed.2d 640 (1994). At the time the Milberg Weiss motion was filed, no such showing could be made. At that time, February 6, 1995, Milberg Weiss had also moved for a permanent transfer of this case to the Arizona District, and Judge Roll was poised to rule on Lexecon’s motion to refer the case to the JPML for remand. His rulings thereafter were generally favorable to Milberg Weiss. Even had these rulings been adverse to Milberg Weiss, it could have appealed them to this court; therefore, it could not show either the possibility of irreparable injury or that the balance of hardships tipped in its favor. See United States v. Rohm & Haas Co., 721 F.Supp. 666, 699 (D.N.J.1989) (refusing to enjoin itself from entering proposed consent decree where appealability of the decree defeated any claim of irreparable harm). Nor was there any indication that Lexecon was likely to initiate an entirely new lawsuit on the same claims in a different forum. In short, Milberg Weiss failed to establish the conditions prerequisite to the issuance of the preliminary and permanent injunctions it sought.11
rv.
THE DISMISSAL OF THE MALICIOUS PROSECUTION AND ABUSE OF PROCESS CLAIMS
We now turn to Lexecon’s appeal from the dismissal by the district court under Fed.R.Civ.P. 12(b)(6) of its malicious prosecution and abuse of process claims. Our review of this dismissal is de novo, with all factual allegations taken as true and construed in the light most favorable to Lexecon. See Gotcher v. Wood, 66 F.3d 1097, 1099 (9th Cir.1995), petition for cert. filed, 64 U.S.L.W. 3605 (1996). The district court’s denial of Lexecon’s motion for leave to amend its complaint is reviewed for an abuse of discretion. United States v. County of San Diego, 53 F.3d 965, 969 n. 6 (9th Cir. 1995), cert. denied, — U.S. - , 116 S.Ct. 183, 133 L.Ed.2d 121 (1995).
A. Malicious Prosecution
Under Arizona law, which the parties no longer dispute is the applicable law, the plaintiff must allege, and to prevail must ultimately prove, that the defendant “(1) instituted a civil action which was (2) motivated by malice, (3) begun without probable cause, (4) terminated in plaintiff’s favor and (5) damaged plaintiff.” Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 758 P.2d 1313, 1319 (1988). Under Arizona law, probable cause requires that the plaintiff honestly believe in the lawsuit’s possible merits and that the belief be objectively reasonable. Id. (citing Restatement (2d) of Torts § 675 comment c; Prosser & Keeton on the Law of Torts § 120, at 893 (5th ed. 1984)).
[1537]*1537There is no dispute here that Lexe-con has properly alleged the first and last elements of the cause of action. Assuming, for purposes of argument only, that Lexecon has sufficiently alleged lack of probable cause and malice as well, its claim fails nonetheless. Judge Bilby’s rulings in MDL 834, including his order of December 31, 1992 (see supra n. 2), plainly indicate that the litigation was not “terminated” in Lexeeon’s favor.
Lexecon attempts to avoid this roadblock to its malicious prosecution claim by insisting that the district court erred in examining the MDL 834 record in ruling on Milberg Weiss’ 12(b)(6) motion.12 In general, material outside the pleadings cannot be considered in ruling on a motion to dismiss, unless the motion is treated as one for summary judgment and the parties are “given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.” Fed.R.Civ.P. 12(b); Jacobson v. AEG Capital Corp., 50 F.3d 1493, 1496 (9th Cir. 1995). Nonetheless, ample authority exists which recognizes that matters of public record, including court records in related or underlying cases which have a direct relation to the matters at issue, may be looked to when ruling on a 12(b)(6) motion to dismiss. See Shaw v. Hahn, 56 F.3d 1128, 1129 n. 1 (9th Cir.1995), cert. denied, — U.S. -, 116 S.Ct. 418, 133 L.Ed.2d 336 (1995); Henson v. CSC Credit Serv., 29 F.3d 280, 284 (7th Cir.1994); United States ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir.1992).
It would be absurdly formal to hold that Judge Bilby’s published opinion in MDL 834 and his December 31, 1992, order must be ignored in ruling on a motion to dismiss Lexecon’s malicious prosecution claim. Only by alleging its own involvement as a defendant in MDL 834 was Lexecon able to frame its claim of malicious prosecution; why should the district court be limited by Lexe-eon’s selective telling of a story that unfolded, and was duly recorded, in its sister court? Milberg Weiss, in its motion to dismiss, was entitled to refer to the record and outcome of the MDL litigation, and the district court was entitled to do the same in assessing the viability of Lexecon’s claim. Formalism has its place, but that place is not here.
Lexecon argues further that the record in MDL 834 supports its contention that the litigation terminated in its favor. This is not true. “A termination does not satisfy the [favorable termination] element [of a malicious prosecution claim] if it is the result of compromise or settlement of the claim.” Frey v. Stoneman, 150 Ariz. 106, 722 P.2d 274, 277 (1986) (en banc). “If entry of summary judgment was merely the formal means of securing the parties’ settlement benefits, the judgment cannot form the basis for a malicious prosecution action.” Id. 722 P.2d at 278-79 (internal quotation omitted). Here, the avoidance of the use of the term “settlement” in favor of the alternative “resolution” does not alter that result.
Lexecon urges us to rely on Bradshaw, 758 P.2d at 1321, which held that a settlement may be a favorable termination depending on the surrounding facts. Lexecon argues that favorable termination is a question of fact that cannot be resolved on a 12(b)(6) motion. We disagree. In Bradshaw, the settlement terms called for the plaintiff to withdraw its action, pay the defendants $60,-000, and stipulate to a dismissal with prejudice. Here, it was the defendant Lexecon that paid $700,000 in exchange for its dismissal from MDL 834. No additional factual development is necessary. The circumstances of this case do not indicate that the MDL 834 litigation against Lexecon terminated in its favor. It follows that Lexecon’s malicious prosecution claim against both Mil-berg Weiss and Cotchett fails.
It also follows that we need not consider the argument of Milberg Weiss that the tort of malicious prosecution has been reshaped by First Amendment principles developed in the Noerr-Pennington doctrine13 and Professional Real Estate Investors, Inc. v. Co[1538]*1538lumbia Pictures Indus., Inc., 508 U.S. 49, 54-56, 113 S.Ct. 1920, 1925, 123 L.Ed.2d 611 (1993) (“PREI”). Milberg Weiss argues that these decisions have raised the threshold for access to a malicious prosecution claim by requiring the plaintiff to show that the defendant’s earlier suit was “objectively baseless” and one in which “no reasonable litigant could realistically expect success on the merits.”14 This formulation, if applied, would alter the meaning under Arizona law of the “probable cause” element, and to some degree the “malice” element, by eliminating the subjective, honest belief requirement.
Noerr-Pennington and PREI were federal antitrust cases that did not address the state law tort of malicious prosecution. In this circuit, the application of this line of cases to state law claims has been unpredictable. For example, the PREI objective baselessness standard was not applied to a National Labor Relations Board decision that a libel suit brought by an employer against a union was an unfair labor practice. PREI was said not to be on point. Diamond Walnut Growers, Inc. v. NLRB, 58 F.3d 1085, 1087-88 (9th Cir.1995). On the other hand, a timber company counterclaim against an environmental organization for abuse of process, based on that organization’s efforts to enjoin logging on the timber company’s land, was required to meet the heightened pleading standard associated with Noerr-Pennington. Oregon Natural Resources Council v. Mohla, 944 F.2d 531, 533-35 (9th Cir.1991).
The rationalizing principle of these cases is unclear, unless it rests on a judicial preference for certain types of litigation that appear to promote specifically recognized public interests. To encourage vigilant pursuit of these interests, it may be thought proper to protect them against threats of malicious prosecution by raising the barrier to access to that remedial tort action. Milberg Weiss argues, in substance if not in form, that the class action on behalf of Lincoln Savings investors easily conforms to that rationalization. Innocent investors in improperly operated savings and loan institutions and their legal representatives are as deserving of protection from the threat of malicious prosecution by those who have rendered financial services to such institutions as are plaintiffs in antitrust or environmental proceedings.
While there is a certain appeal in such an approach, we decline to rest our rejection of Lexecon’s malicious prosecution on this ground.15 We hold only that the MDL 834 litigation against Lexecon was not terminated in its favor. Therefore, under Arizona law, Lexecon has failed to state a claim of malicious prosecution.
B. Abuse of Process
Abuse of process is described by the Restatement (Second) of Torts § 682 (1977) as follows:
One who uses a legal process, whether criminal or civil, against another primarily [1539]*1539to accomplish a purpose for which it is not designed, is subject to liability to the other for harm caused by the abuse of process.
This definition is accepted by the Arizona courts. See Nienstedt v. Wetzel, 133 Ariz. 348, 651 P.2d 876, 881 (App.1982); Morn v. City of Phoenix, 152 Ariz. 164, 730 P.2d 873, 875 (App.1986). Plaintiff must show that defendants (1) committed a willful act in the use of judicial process (2) for an improper ulterior purpose. Nienstedt, 651 P.2d at 881.
The gravamen of the tort is not “the wrongful procurement of legal process or the wrongful initiation of criminal or civil proceedings; it is the misuse of process, no matter how properly obtained, for any purpose other than that which it was designed to accomplish.” Restatement § 682, comment a; see also Morn, 730 P.2d at 875.
Accordingly, the task of this court is to determine whether the addition of Lexe-con as a defendant in the MDL 834 litigation had as its primary purpose an objective for which that litigation was not intended. We hold that no such objective existed in MDL 834.
It is clear that the primary purpose of the MDL 834 litigation was to recover from the collapse of American Continental/Lincoln Savings on behalf of the investors therein such assets as was possible under the law. Lexeeon, of course, does not deny that. Rather, its focus is upon its inclusion as a defendant. It asserts that class counsel’s primary purpose in attempting to add Lexe-con and Fischel as defendants was “(1) to extract false testimony implicating other Shields defendants, (2) to prevent Arthur Young & Co. from using Lexeeon as an expert in Shields, and (3) ‘to make Lexeeon ... far less attractive to potential clients as expert witnesses.’ ” In re American Continental, 845 F.Supp. at 1382.
Lexeeon alleges that after Milberg Weiss sought to file a fifth amended complaint adding both Lexeeon and Fischel as defendants, it offered to dismiss the motion in exchange for “false testimony” against existing defendants. Lexeeon refused, and leave to file this fifth amended complaint • was subsequently denied. The alleged attempt to extract false testimony therefore never amounted to anything. Although process did later issue against Lexeeon only as a result of defendants’ successful motion to file their sixth amended complaint, the attempt to coerce false testimony was not repeated. Therefore, Lexeeon cannot show that the primary purpose behind Milberg Weiss’ use of process was to coerce false testimony.
Léxeeon also points to additional acts of Milberg Weiss that it claims amounted to an abuse of process. Some of these acts, such as the unsuccessful motion to file the fifth amended complaint, occurred “pre-process,” and were therefore not actionable.16 Others were collateral to the MDL 834 litigation, such as Milberg Weiss attorneys’ use of that litigation to impeach Lexeeon expert witnesses during cross-examination in separate and distinct litigation. Such cross-examination, so long as it conformed to the terms of the MDL 834 resolution, was not improper and therefore cannot form the basis of an abuse of process claim.
The acts alleged by Lexeeon did not have as their primary purpose to inflict harm on Lexeeon or Fischel. Nor did the addition of Lexeeon as an MDL 834 defendant to assert that Lexeeon bore some responsibility for those investors’ losses constitute an abuse of process. Lexecon’s abuse of process claim was therefore properly dismissed.17
V.
THE DISMISSAL OF MILBERG WEISS’ COUNTERCLAIMS
No. 95-16754
. The Milberg Weiss counterclaims alleged fraud, breach of contract, unjust enrichment, [1540]*1540and promissory estoppel. The alleged source of these claims is the negotiations that led to the resolution of Lexecon’s exposure to liability in MDL 834. We review their dismissal de novo. Gotcher, 66 F.3d at 1099; Barrus v. Sylvania, 55 F.3d 468, 469 (9th Cir.1995).
First, Milberg Weiss alleged that while Lexecon said it was negotiating the “resolution” to avoid damaging cross-examination about MDL 834 in future eases, its true reason was to preserve its ability to sue class counsel for malicious prosecution by avoiding an unfavorable jury verdict. The district court properly dismissed this claim. While Milberg Weiss is a party in the litigation now before this court, it was not a party in the MDL 834 litigation; rather, it was a counsel to the class on whose behalf the proceedings against Lexecon were brought. As the district court put it: ‘Whatever harm resulting from the resolution was sustained by the class, not by class counsel.” In re American Continental, 884 F.Supp. at 1397.
Second, Milberg Weiss argues that during the negotiations, Lexecon represented that it had no applicable insurance when in fact it did have such insurance, and that it relied on that representation in agreeing to the resolution. The district court properly ignored this claim because Milberg Weiss failed either to raise the issue in its pleadings, or to request leave to amend. See Fed.R.Civ.P. 15(a).
VI.
CONCLUSION
The judgments in Nos. 95-15759, 95-16403, 95-16595, and 95-16754 are affirmed.