Stekly v. I.Q. Data International, Inc.
- Eric Tostrud
- 0:25-cv-00216
- U.S. District Court · District of Minnesota
- 9
In Stekly v. I.Q. Data International, Inc., Judge Tostrud denied plaintiff Faith Stekly's motion for partial judgment on the pleadings on two Fair Debt Collection Practices Act claims because I.Q. Data's factual denials—including a denial that Stekly suffered a concrete legal injury giving her the right to sue—raised unresolved disputes that cannot be decided in Stekly's favor at this stage.
Consumers who have sent written demands for debt collectors to stop contacting them, and people who receive debt-collection letters that threaten unauthorized interest charges. Also relevant to debt collectors and their litigation counsel regarding the scope of Article III standing in FDCPA cases and what a defendant's factual denials in an answer can accomplish against a plaintiff's motion for judgment on the pleadings.
What happened
In Stekly v. I.Q. Data International, Inc. (File No. 25-cv-216), plaintiff Faith Stekly claims that debt collector I.Q. Data International, Inc. broke federal debt collection law—the Fair Debt Collection Practices Act (FDCPA)—in two specific ways: first, by mailing her a collection letter after she had sent a written demand that it stop all contact with her, and second, by threatening to charge 6% annual interest on her debt without any contract or law authorizing that interest. Stekly asked the court to rule in her favor on I.Q. Data's legal liability for those two claims without a full trial, using a procedural tool called a motion for judgment on the pleadings, which can only succeed if there are no disputed facts and the moving party is clearly entitled to win as a matter of law.
The court identified two obstacles that independently blocked Stekly from winning at this stage. First, Stekly's complaint described various injuries she suffered from I.Q. Data's conduct generally, but did not specifically connect any harm to the two particular claims at issue. Without knowing which harms she links to which claims, the court said it would have to guess—which it is not permitted to do. Second, I.Q. Data formally denied in its answer that Stekly suffered a real, concrete injury of the kind required by the U.S. Constitution (known as Article III standing) to have the right to bring these claims in federal court at all. The court noted that a recent federal appeals court decision supported the idea that simply receiving an unwanted debt-collection letter in the mail may not, by itself, constitute a sufficient injury to sue over.
Beyond the standing issue, Judge Tostrud also found that the merits of both claims were disputed. I.Q. Data denied being a covered 'debt collector' under the FDCPA with respect to Stekly as a 'consumer,' denied the timeline of when letters were sent and received, and denied that it lacked a legal or contractual basis for the 6% interest it mentioned. Because a motion for judgment on the pleadings requires the court to treat the defendant's denials as true, those unresolved factual disputes meant the motion could not succeed. Judge Tostrud denied the motion, and the case will continue.
The detailed version
- Stekly v. I.Q. Data International, Inc. and Liberty Mutual Insurance Company, No. 25-cv-216 (ECT/DLM)
- Eric C. Tostrud, United States District Judge
- August 15, 2025
Background and Claims at Issue Plaintiff Faith Stekly alleges that Defendant I.Q. Data International, Inc. (I.Q. Data), a debt collector, violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., and committed state-law fraud while attempting to collect a personal debt arising from an apartment rental. The motion before the court concerned only two FDCPA theories:
1. § 1692c(c) claim: After Stekly sent I.Q. Data a written letter dated March 2, 2024, demanding it 'cease all collection activities immediately' and disputing the debt, I.Q. Data allegedly continued to communicate with her by mailing a collection letter dated March 18, 2024—after I.Q. Data purportedly received her demand letter on March 11. Section 1692c(c) prohibits a debt collector from communicating further with a consumer after receiving a written cease-communication demand, subject to limited exceptions that the parties agreed did not apply here.
2. § 1692f(1) claim: The March 18 letter stated that Stekly's 'outstanding principal balance will accrue interest at a rate of 006.00 percent per annum.' Stekly claims this violated § 1692f(1), which prohibits unfair or unconscionable debt-collection practices and specifically bars collecting interest unless 'expressly authorized by the agreement creating the debt or permitted by law.' Stekly alleged no contract or statute authorized the 6% interest.
Stekly sought partial judgment on the pleadings (Federal Rule of Civil Procedure 12(c)) on I.Q. Data's liability for these two claims only. Defendant Liberty Mutual Insurance Company was not involved in this motion.
Legal Standard Judgment on the pleadings under Rule 12(c) is proper only when no material issue of fact remains and the movant is entitled to judgment as a matter of law. It is assessed under the same standard as a Rule 12(b)(6) motion to dismiss: the court must accept the non-moving party's well-pleaded factual allegations as true and draw all reasonable inferences in that party's favor. When a plaintiff is the movant, this means the defendant's factual denials in its answer are accepted as true. A plaintiff cannot obtain judgment on the pleadings when the answer raises factual issues that, if proved, would defeat recovery.
Ruling: Motion Denied Judge Tostrud denied the motion for two independent reasons.
Reason 1 – Article III Standing Cannot Be Resolved The court identified Article III standing—the constitutional requirement that a plaintiff demonstrate (1) a concrete and particularized injury-in-fact, (2) causation, and (3) redressability—as a threshold issue that could not be resolved in Stekly's favor at this stage.
First, Stekly's First Amended Complaint alleged various injuries (reputational harm, workplace embarrassment, emotional distress, harm to creditworthiness, loss of time, and frustration of her ability to respond to collection efforts) arising from I.Q. Data's conduct broadly, but did not tether specific injuries to either the § 1692c(c) claim or the § 1692f(1) claim. Because standing must be demonstrated separately for each claim (citing TransUnion LLC v. Ramirez, 594 U.S. 413 (2021)), the court said resolving standing on these two claims would require impermissible guesswork about which injuries Stekly associates with each.
Second, I.Q. Data plausibly denied that Stekly suffered an Article III-cognizable injury. I.Q. Data's answer expressly denied Stekly has standing and denied her injury allegations. The court found these denials were supported by the Eighth Circuit's recent decision in Denmon v. Kan. Counselors, Inc., 2025 WL 2329189 (8th Cir. Aug. 13, 2025), which held that receiving an unwanted collection letter 'may not be an intrusion that would be highly offensive to a reasonable person' and endorsed the Seventh Circuit's conclusion in Pucillo v. Nat'l Credit Sys., Inc., 66 F.4th 634 (7th Cir. 2023), that 'there is nothing inherently bothersome, intrusive, or invasive about a collection letter delivered via U.S. Mail,' meaning such letters alone may not confer standing.
Reason 2 – Merits Also Disputed Even setting aside standing, the merits of both claims were in genuine factual dispute:
- For the § 1692c(c) claim: I.Q. Data denied that Stekly was a 'consumer' under the FDCPA, denied the dates on which her letter was sent and received, and denied that its March 18 letter was sent after it received hers. These are elements essential to the claim.
- For the § 1692f(1) claim: I.Q. Data denied that Stekly was a 'consumer,' denied that it lacked contractual or legal authorization for the 6% interest, and denied the related allegations. These too are elements essential to the claim.
Under Rule 12(c), the court must accept these denials as true, and their truth would defeat Stekly's recovery. The court noted that whether evidence might later undermine I.Q. Data's denials is beside the point at this procedural stage.
Disposition Plaintiff Faith Stekly's motion for partial judgment on the pleadings [ECF No. 18] regarding I.Q. Data's liability under 15 U.S.C. §§ 1692c(c) and 1692f(1) is DENIED. The case continues. The court noted that a Second Amended Complaint had been filed after the hearing but added no allegations that would change the analysis.
Reviewer note from the AI+
Read the full 9-page opinion on CourtListener, the free public archive maintained by the Free Law Project.