Legal Dispute Escalates Between CrowdStrike and Delta Air Lines Amid IT Outage

Legal Tensions Rise Between CrowdStrike and Delta Air Lines Over IT Outage

The ongoing legal dispute between cybersecurity firm CrowdStrike and Delta Air Lines has intensified following a significant global IT outage that occurred last month. In a letter reviewed by The New York Times, attorneys from Quinn Emanuel Urquhart & Sullivan, representing CrowdStrike, firmly rejected Delta’s assertions that the cybersecurity company was responsible for the cancellation of hundreds of flights. The lawyers emphasized that the responsibility for the airline’s operational challenges lay solely with Delta.

This correspondence comes in the wake of Delta’s decision to engage renowned litigator David Boies, signaling its intent to seek damages from CrowdStrike over the incident, which the airline claims cost approximately $500 million. The stock values of both companies have suffered considerably since the disruption on July 19, with CrowdStrike witnessing a decline of more than 35 percent.

Transportation Secretary Pete Buttigieg, in an interview with NPR, provided some insights into the situation, stating that his department is probing Delta regarding the outage. He noted, “Their systems seem to have been more dependent on pieces of software that were affected by CrowdStrike,” adding that Delta’s crew scheduling system faced significant strain and became overloaded.

CrowdStrike has raised questions regarding why Delta appeared more adversely affected than its competitors. The cybersecurity firm pointed to Delta’s own “IT decisions and response to the outage,” revealing that the airline declined “free onsite assistance from CrowdStrike professionals.” In contrast, other airlines such as American and United managed to recover more swiftly from the incident. Aviation experts have indicated that Delta opted for a higher number of cancellations rather than delays, which contributed to its struggles in restoring normal operations.

Furthermore, CrowdStrike’s legal representatives indicated that the potential liability for the outage is limited. Although Delta’s CEO, Ed Bastian, articulated in an interview with CNBC that the estimated $500 million loss encompasses lost revenue along with “tens of millions of dollars per day in compensation and hotels,” CrowdStrike’s lawyers countered that “any liability by CrowdStrike is contractually capped at an amount in the single-digit millions.”

The legal team for CrowdStrike concluded, “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 comments, a representative from Delta directed inquiries to CEO Bastian’s interview on CNBC.