152 F.3d 1007 (8th Cir. 1998), 97-3267, Bakker v. McKinnon

Docket Nº:97-3267.
Citation:152 F.3d 1007
Party Name:Johnny L. BAKKER, Teresa Bakker, Carrie Ann Bakker, Appellees, v. Laura J. McKINNON, Appellant.
Case Date:August 21, 1998
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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152 F.3d 1007 (8th Cir. 1998)

Johnny L. BAKKER, Teresa Bakker, Carrie Ann Bakker, Appellees,


Laura J. McKINNON, Appellant.

No. 97-3267.

United States Court of Appeals, Eighth Circuit

August 21, 1998

Submitted March 11, 1998.

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[Copyrighted Material Omitted]

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David D. Stills, Fayetteville, AR, argued (Thomas A. Mars, on the brief), for Appellees.

George Alan Wooten, Fort Smith, AR, argued (Kathryn Stocks Campbell, on the brief), for Appellant.

Before McMILLIAN, FAGG and BOWMAN, 1 Circuit Judges.

McMILLIAN, Circuit Judge.

Laura J. McKinnon, an attorney, appeals from a final judgment entered in the United States District Court 2 for the Western District of Arkansas, following a bench trial, finding that she had intentionally and willfully violated the Fair Credit Reporting Act (FCRA or the Act), 15 U.S.C. § 1681 et seq. Bakker v. McKinnon, Civil No. 96-5112 (W.D.Ark. July 21, 1997) (mem.op.). The district court awarded to each appellee, Dr. Johnny L. Bakker and his two daughters, Teresa Bakker and Carrie Ann Bakker, $500 in compensatory damages and $5,000 in punitive damages. For reversal, appellant contends that the district court erred in finding that she violated the FCRA and in awarding an unreasonable amount for punitive damages.

The district court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 (federal question). This court has jurisdiction pursuant to 28 U.S.C. § 1291. The notice of appeal was timely filed pursuant to Fed. R.App. P. 4(a). For the reasons given herein, we affirm the judgment of the district court.


In September 1996 appellees Dr. Johnny L. Bakker, who is a dentist, and his adult daughters, Teresa Bakker and Carrie Ann Bakker, filed this lawsuit alleging that appellant had requested several consumer credit reports about them from a local credit bureau in violation of the FCRA. Appellant represents several women patients of Dr. Bakker who claimed that Dr. Bakker had committed dental malpractice by improperly touching them during the course of dental treatments. Appellant filed lawsuits in state court on behalf of these women against Dr. Bakker.

The district court found that appellant and her associates had engaged in numerous acts which, in the district court's view, "grossly crossed the line in respect to what is proper in conducting litigation." Mem. op. at 2 (footnote omitted). Basically, the district court concluded that appellant and her associates had requested the credit reports as part of the litigation process to force a settlement. Id. at 3-9. The district court noted that a speaker at a meeting of the Arkansas Trial Lawyer's Association (of which appellant was a member of the board of governors and a former president) had recommended that consumer credit reports be routinely obtained against defendants or prospective defendants. Id. at 7.

Appellant admitted that she (or, more precisely, someone in her office) obtained the credit reports, but she argued that (1) she obtained them for a commercial or a professional purpose and, thus, the credit reports were not consumer credit reports within the meaning of the FCRA, 15 U.S.C. §§ 1681a(d), 1681b, or (2) in the alternative, assuming the credit reports were consumer reports within the meaning of the FCRA, she

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had a legitimate business need for requesting them, id. § 1681b(3)(E). Dr. Bakker's attorney had informed appellant that CNA Insurance Co. was defending Dr. Bakker under reservation of rights letters. Appellant testified that she obtained the credit reports about Dr. Bakker and his daughters in order to determine whether he was judgment proof and whether he was transferring his assets to his daughters. Appellant filed a motion for summary judgment, alleging that the credit reports were not consumer reports or, in the alternative, they were obtained for a legitimate business need. The district court denied the motion for summary judgment, holding that the credit reports were consumer reports within the meaning of the FCRA. Order at 5-7 (Apr. 25, 1997) (order denying defendant's motion for summary judgment). The district court decided that the key is the purpose for which the information was collected, not the use to which the information contained therein is put. Id. at 6, citing St. Paul Guardian Ins. Co. v. Johnson, 884 F.2d 881, 883 (5th Cir.1989) (St. Paul Guardian ). Here, the credit reports apparently consisted primarily of a listing of outstanding credit card and similar debts. Mem. op. at 9. The district court also rejected appellant's legitimate business need argument because she and appellees were not involved in a business transaction within the meaning of the FCRA. Order at 7. The district court rejected the "broad" interpretation of "business transaction" and instead limited "business transaction" to consumer credit, insurance or employment transactions. Id.; see Ippolito v. WNS, Inc., 864 F.2d 440, 451 (7th Cir.1988), cert...

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