Originally Posted by
DrMilano
This was expected how Delta kept on pointing the finger at CrowdStrike with every news hub update, but this is fairly quick—Ed must be working in Paris in between receptions. It was mentioned many posts ago that the CrowdStrike services contract would have a limits of liability clause. Delta IT must be moving on from CrowdStrike. When the complaint is filed, the contract will most likely be heavily redacted or filed under seal to prevent the public from getting access to the contact. Suspect that Delta will file in either GA or DL, then CrowdStrike will file a motion to move the proceedings to Federal Court which should be more favorable venue.
I may end up being completely wrong but I'd bet money that a lawsuit is not filed. Litigation will be costly and embarrassing for both companies. Some of the reporting of this is also so silly - Delta almost certainly didn't contract services from David Boies specifically as the CNBC article implies, they contracted with Boies, Schiller & Flexner for which Boies was a founding partner and current chairman. Hiring external big law counsel to privately help for large complex contract disputes (especially with potential to shift into a liability lawsuit) is typical. I doubt that Delta is the only one who hired external counsel to deal with receiving compensation from Crowdstrike.
This will be a private negotiation, and only if negotiations break down will a suit be filed. My guess is that Delta is seeking damages above the likely liability caps in the contract. They are betting that they can bully Crowdstrike into more favorable compensation terms than what is allowed under their contract in order to avoid a lawsuit, although my guess is that both sides' lawyers know that there is not really a suit to be had: the negotiating power is solely about getting a premium over what Delta is contractually obligated to get by threatening embarrassing litigation (although my guess is that such litigation would also be embarrassing to Delta, so to me it is a bluff).
The only other factor here is that it is possible (I'd even say likely) that the Crowdstrike enterprise sales rep - desperate to preserve the relationship - likely made representations to Delta early on in the crisis saying that "we will take care of you and make you whole" or something like that before reps were warned against making such representations. That would be additional leverage, but such off the cuff comments - even in writing - do not magically make Crowdstrike liable for anything as the contract almost certainly precludes such unofficial commitments outside of the four corners of the agreement, especially since such commentary would have no additional consideration and it would be unreasonable to expect the sales rep to have the authority to make such substantial unilateral commitments early on in the crisis.
All in all, the only winners here will probably be the lawyers. But that said, I'd love to see this drug into court if only to enjoy learning more about the behind the scenes situation for both companies.