LAMONTTE MITCHELL v. VNS LLC TMG HEALTH INC (2026)

This action arises from a data breach in late May-early June 2023. Plaintiffs, Eric Parham and Lamontte Mitchell,¹ had health insurance policies with defendant VNS Health Management Services.² VNS contracts with co-defendant vendor TMG Health, Inc. to store clients' protected health information (PHI) and personally identifiable information (PII). (See NYSCEF No. 1 at 1, ¶ 1.) TMG's third-party servers stored plaintiff's information. Plaintiffs' names, addresses, phone numbers, email addresses, dates of birth, and SSNs were leaked when an unknown hacker exploited a vulnerability in TMG's secure file transfer server. (See id. at 1-2, ¶¶ 1, 6.)

Plaintiffs allege that TMG had discovered a vulnerability in the secure file on May 31, 2023, but waited until June 2, 2023, to investigate it. Plaintiffs allege that the breach occurred sometime during that three-day period. VNS began to notify plaintiffs of the breach around August 15, 2023. (See id. at 2, ¶ 7.)

Plaintiffs brough this action against VNS and TMG for negligence; negligence per se; invasion of privacy; breach of implied contract; breach of confidence; breach of fiduciary duty; unjust enrichment; and declaratory judgment. They seek injunctive relief, damages, costs, and attorney fees for injuries associated with the disclosure of their information. In May 2025, plaintiff dropped TMG from the action, opting to pursue its claims against TMG in Federal court. (See NYSCEF No. 43 at 2 [mem. of law on mot seq 003].)

VNS now moves under CPLR 3211 (a) (3) and (7) to dismiss the complaint.³ The branch of VNS's motion to dismiss the complaint for lack of standing is granted.

DISCUSSION

Defendants argue that plaintiffs lack standing because they have not alleged a cognizable injury. They say that plaintiffs have suffered no actual harm, because their compromised data has not been used in any actual or attempted identity theft or fraud. Defendants further contend that plaintiffs' allegations that they will potentially suffer harm in the future harm is speculative. (See NYSCEF No. 46 at 1-2.)

In opposition, plaintiffs argue that their standing does not turn solely on whether the leaked data was used in identity theft or fraud. They say that their standing depends on the type of personal information compromised, whether hackers were involved, whether the data has been published, and the amount of time that has passed since the reach without incident of identity theft or fraud. (See NYSCEF No. 52 at 6.) Plaintiffs point to their allegations that highly sensitive information like Social Security numbers was leaked; that the cybergang C10p allegedly claimed responsibility for the Breach and published Plaintiffs' data on the dark web; and that other individuals who are plaintiffs in a different action have evidence of misuse of their information. (See id. at 6-9.) According to plaintiffs, identity theft and fraud are the inevitable end results of the breach, and therefore injury is imminent.

To survive a challenge to standing plaintiff "has the burden of establishing both an injury-in-fact and that the asserted injury is within the zone of interests sought to be protected by the statute alleged to have been violated." (Matter of Assn. for a Better Long Is., Inc. v New York State Dept. of Envtl. Conservation, 23 NY3d 1, 6 [2014].) To satisfy the injury-in-fact requirement, plaintiffs must show that they have "an actual legal stake in the matter being adjudicated and [have] suffered a cognizable harm that is not tenuous, ephemeral, or conjectural but is sufficiently concrete and particularized to warrant judicial intervention." (Mental Hygiene Legal Serv. v Daniels, 33 NY3d 44, 50 [2019] [internal quotation marks and citation omitted].)

Few courts have considered standing in the context of data breaches. And the Fourth Department in Greco v Syracuse ASC LLC is the only Appellate Division Department to have done so. There, the Court took a holistic approach to determining whether data-breach related injuries are nonspeculative. (See Greco v Syracuse ASC, LLC, 218 AD3d 1156, 1158 [4th Dept 2023].) The Fourth Department found that the most important consideration was whether there are allegations that the "information purportedly accessed by the unknown third party has actually been misused." (Id. [emphasis added].) The Court concluded that plaintiff had not alleged that misuse of her own information or information belonging to someone similarly situated occurred in the period of more than a year following the breach. (See id.) That Court also considered whether the sort of information accessed would be "more readily used for financial crimes such as dates of birth, credit card numbers, or social security numbers." (Id.)

It is undisputed that plaintiffs' sensitive information was accessed in the breach. Plaintiffs have tried to raise their claims above mere speculation by showing that other victims of the same breach have suffered from attempts at fraud and identity theft in the two years since the breach.⁴ The court agrees that this showing is sufficient to show that the prospect of harm breach victims is possible, but not enough to show that harm to these plaintiffs is more than speculative. That other victims of the same breach might have standing in a different action does not, without more, confer standing on the plaintiffs here.⁵

Accordingly, it is

ORDERED that VNS's motion to dismiss plaintiff's complaint for lack of standing under CPLR 3211 (a) (3) is granted; and it is further

ORDERED that VNS serve a copy of this order with notice of its entry on plaintiff and on the office of the County Clerk (using the NYSCEF document type "Notice to the County Clerk - CPLR § 8019 (c)"), which shall enter judgment accordingly.

DATE 5/18/2026

FOOTNOTES

1.   Plaintiffs intend to certify this action as a class action.

2.   Plaintiffs request an order certifying a class composed of all individuals notified by VNS in August 2023 that their data was breached (See NYSCEF No. 1 at 27, 52.) This Court has not yet certified the proposed class.

3.   Both original defendants, VNS and TMG, filed their memorandums in support of motion sequence 004 to dismiss plaintiffs' claims before plaintiffs dropped their claims against TMG. (See NYSCEF Nos. 46 and 48.) Thus, although the memorandum in support was filed by both defendants, it is now effectively submitted by VNS alone.

4.   The other victims filed a Federal action in Massachusetts after incurring fraudulent credit inquiries and charges. (See In re MOVEit Customer Data Security Breach Litigation, MDL No. 1:23-md-3083-ADB-PGL; NYSCEF No. 52 at 9.)

5.   In addition, that plaintiff might take steps to mitigate the effects of the breach would not confer standing upon them "absent a sufficiently concrete injury-in-fact legitimizing or warranting such efforts. A plaintiff "cannot manufacture standing merely by inflicting harm on themselves based on their fears of hypothetical future harm that is not certainly impending." (Greco, 218 AD3d at 1158.)

Gerald Lebovits, J.