Legal Tensions Rise Between CrowdStrike and Delta Air Lines
The ongoing legal dispute between cybersecurity firm CrowdStrike and Delta Air Lines has intensified following a significant global I.T. outage last month. In a letter reviewed by The New York Times, CrowdStrike’s legal team at Quinn Emanuel Urquhart & Sullivan firmly rejected Delta’s claims of responsibility for the airline’s decision to cancel hundreds of flights. According to their correspondence, the root of Delta’s issues lies solely with the airline itself.
This letter was prompted by Delta’s engagement of prominent litigator David Boies and their announcement of plans to pursue damages estimated at $500 million due to the outage. The repercussions of this incident have been severe, with stock prices for both companies plummeting—CrowdStrike’s shares dropping by more than 35 percent since the outage occurred on July 19.
In an interview with NPR, Transportation Secretary Pete Buttigieg, whose department is currently investigating the circumstances surrounding Delta’s outage, provided some initial insights into the situation. He remarked, “Their systems seem to have been more dependent on pieces of software that were affected by CrowdStrike,” adding that the airline’s crew scheduling system was essentially overwhelmed during this crisis.
CrowdStrike has raised questions about why Delta experienced greater difficulties compared to its competitors. The cybersecurity company pointed to Delta’s “I.T. decisions and response to the outage,” indicating that the airline had declined “free onsite help from CrowdStrike professionals.” In contrast, other airlines such as American and United managed to recover more swiftly from the incident. Aviation experts have suggested that Delta opted for a strategy that favored cancellations over delays, which ultimately hampered its ability to restore normal operations.
In terms of liability, CrowdStrike has indicated that any potential financial responsibility is limited. While Delta’s CEO, Ed Bastian, discussed the $500 million loss that includes lost revenue and extensive compensation costs, CrowdStrike’s legal representatives countered that “any liability by CrowdStrike is contractually capped at an amount in the single-digit millions.”
Furthermore, CrowdStrike’s attorneys stated, “Should Delta pursue this path, Delta will have to explain to the public, its shareholders, and ultimately a jury why CrowdStrike took responsibility for its actions — swiftly, transparently, and constructively — while Delta did not.” When approached for comment, a representative from Delta directed inquiries to Mr. Bastian’s remarks during the CNBC interview.
