I think Delta was totally out of line. The agent working the flight clearly should have known that connecting passengers were about to arrive, and in all probability would have arrived on time to make the flight. It appears the agent knew about your flight, but knowing that connecting flight was overbooked took advantage of you and your fellow passengers to avoid paying the required denied boarding compensation. It seems this practice is becoming more and more common and should not be tolerated.

I would urge you to complain about this episode to the DOT, clearly indicating in your complaint letter that Delta took advantage of your late connection to avoid paying you involuntary denied boarding compensation. The required compensation for involuntary denied boarding is $400 cash (not voucher). Usually, the DOT simply logs and keeps a count of complaints, but denied boarding is an area where they can and will take enforcement action.

You can file your complaint here:

http://airconsumer.ost.dot.gov/escomplaint/es.cfm