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Delta Airlines Suing Crowdstrike Over Computer Outage That Caused $500M In Losses

The company is still processing more than 176,000 refund or reimbursement requests


Delta Airlines Suing Crowdstrike Over Computer Outage That Caused $500M In Losses

Delta Airlines has retained a high-profile law firm to pursue damages against cybersecurity firm CrowdStrike and Microsoft following a flawed software update on July 19 that brought global air travel to a halt.


Delta was among many airlines affected by the system outage, which resulted in thousands of canceled flights, half a million stranded customers, and financial losses amounting to hundreds of millions of dollars.


According to CNBC, Delta has engaged attorney David Boies, chairman of the law firm Boies Schiller Flexner, to seek damages against CrowdStrike and Microsoft.


Boies and his firm secured a $290 million settlement last year from JPMorgan Chase on behalf of women who alleged sexual abuse by disgraced financier Jeffrey Epstein.


The firm has also represented the U.S. Department of Justice in an antitrust case against Microsoft, former Vice President Al Gore in the 2000 presidential election, the National Football League, and Amazon.


Although no lawsuit has been filed yet, Delta is seeking compensation from CrowdStrike and Microsoft, CNBC reporter Phil LeBeau stated. The outages have cost Delta an estimated $350 million to $500 million, with the company processing more than 176,000 refund or reimbursement requests following the cancellation of nearly 7,000 flights.


None of the companies involved have issued a statement on the potential litigation.


“We are aware of the reporting, but have no knowledge of a lawsuit and have no further comment,” a CrowdStrike spokesperson told CNN.


Legal experts suggest that Delta may face challenges in obtaining significant compensation.


According to CrowdStrike’s terms and conditions for its Falcon security software, the company does not have to pay out anything more than a refund, as the terms limit liability to “fees paid.”


This means that if companies like Delta have a claim for damages or lost revenue, CrowdStrike would only have to pay the cost of the software, Elizabeth Burgin Waller, the chair of the Cybersecurity & Data Privacy practice at Woods Rogers, told Business Insider.


"Delta would have to overcome the harsh limitation of liability provisions that CrowdStrike drafted into its contract with customers," Haim Ravia and Dotan Hammer, cyber and privacy partners at law firm Pearl Cohen, wrote in a note to the outlet.


For any negligence claims, “Delta would need to prove that its harm was reasonably anticipated," the lawyers added.

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