Data Breach Requires Plaintiff’s Own Information was Missued

Post number 5394

The Dismissal Based on Lips’s Failure to Plead Injury in Fact,

Posted on July 14, 2026 by Barry Zalma

Read the full article at https://lnkd.in/gDQZc5vP and at https://zalma.com/blog plus more than 5350 posts.

In Danielle Lips, on behaf of hersef and all others similarly situated v. ACCU Reference Medical Lab, LLC, Civil Action No. 25-13642 (SDW) (CF), United States District Court, D. New Jersey (June 24, 2026) a data-breach class action, the District of New Jersey granted Accu Reference Medical Lab, LLC’s motion to dismiss because Plaintiff Danielle Lips failed to plead Article III standing.

FACTS:

Lips alleged that ACCU, a medical testing laboratory, obtained her personally identifiable information and protected health information through diagnostic testing ordered by her former physician. She claimed the Qilin ransomware group stole ACCU’s data and posted screenshots containing some patients’ unredacted information on the dark web. Lips alleged increased risk of identity theft, future mitigation expenses, lost time, annoyance, and diminution in the value of her information.

LAW:

A plaintiff must establish Article III standing by pleading injury in fact, causation, and redressability. In data-breach cases, courts assess whether the breach was intentional, whether the data was misused, and whether the type of information accessed could create a risk of identity theft. A plaintiff seeking damages based on future risk must allege not only a substantial risk of harm but also additional, currently felt concrete harms.

DISCUSSION:

Rule 12(b)(1) permits a party to bring a motion to dismiss for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). The Rule permits a party to assert either a facial or factual challenge. A facial attack challenges subject matter jurisdiction without disputing the facts alleged in the complaint, and it requires the court to consider the allegations of the complaint as true. A factual challenge attacks the factual allegations underlying the complaint’s assertion of jurisdiction, either through the filing of an answer or otherwise presenting competing facts.

The court found the attack was allegedly intentional because a known ransomware group exfiltrated data and posted screenshots, and the information allegedly exposed — such as Social Security numbers, dates of birth, insurance information, and health information — was sensitive enough to create identity-theft risk. However, the court held that Lips did not adequately plead misuse because she did not allege that her own information was posted on the dark web, identify which of her information was leaked, or allege fraudulent charges, unauthorized accounts, increased spam, or comparable misuse.

ANALYSIS:

An injury in fact is an invasion of a legally protected interest that is concrete and particularized, and actual or imminent, not conjectural or hypothetical. Where the threatened injury is certainly impending or there is a substantial risk that the harm will occur, allegations of future harm will suffice.

The court’s decision turned on the gap between a generalized breach allegation and a plaintiff-specific injury. The court treated the alleged posting of some patients’ data as insufficient without facts tying the disclosure or misuse to Lips personally.

Because Lips did not plead a substantial risk of future harm plus additional concrete present harms, she lacked standing for both injunctive relief and damages.

CONCLUSION:

The court granted Accu’s motion to dismiss under Rule 12(b)(1) for lack of subject-matter jurisdiction. The dismissal was based on Lips’s failure to plead injury in fact, and the court declined to reach Rule 12(b)(6) arguments. Because dismissals for lack of standing generally should not be with prejudice, the court allowed Lips an opportunity to amend.

ZALMA OPINION

Although the alleged ransomware attack was intentional and involved information that could create a risk of identity theft, the complaint did not allege that Lips’s own information was posted, misused, or tied to concrete present harms. Standing and an actual injury is required to sustain a law suit. There was clearly a potential of damage to Lips but it was only a potential. A potential for damage does not support litigation and the suit failed.

(c) 2026 Barry Zalma & ClaimSchool, Inc.

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