Crowdstrike Windows outage:
Delta threatens to sue cybersecurity company for damages
Sep 3, 2024
Following the loss incurred by Crowdstrike’s faulty update in July, which resulted in significant financial damage to shareholders and lawsuits from customers, Delta Airlines, one of the affected companies, is planning to file a class-action lawsuit against the cybersecurity firm. The airlines seeks compensation of up to $500 million from both Crowdstrike and Microsoft, as disclosed in the company’s filing with the US Securities and Exchange Commission (SEC).
According to TechCrunch, Delta has hired high-profile attorney David Boies to represent its interests in the case against CrowdStrike. The airline alleges that the faulty update amounted to gross negligence or willful misconduct, potentially voiding contractual limits on damages typically included in enterprise software agreements.
Shareholders, who owned the company shares until July 29, have also taken legal action, filing a class action lawsuit against CrowdStrike. They claim the company misled them regarding its software update procedures, raising questions about CrowdStrike's transparency and risk management practices.
In response to the mounting legal challenges, CrowdStrike has enlisted the services of Quinn Emanuel Urquhart & Sullivan, a prominent law firm, to defend against the expected barrage of litigation. This move underscores the seriousness of the situation and the potential financial implications for the cybersecurity company.
The individual lawsuits currently being filed may eventually be consolidated into a class action suit to streamline the legal process. This could lead to a "bellwether" trial, which would serve as a benchmark for future settlements.
The fallout from the software update debacle extends beyond immediate financial concerns. CrowdStrike now faces significant reputational damage, which could have long-lasting effects on its business relationships and market position in the highly competitive cybersecurity industry.
[The Times of India]
