Delta passengers sue airline over refund refusals after CrowdStrike meltdown

By CNN Newsource

Published August 7, 2024 10:17 AM

By Ramishah Maruf, CNN

New York (CNN) — Some Delta Air Lines passengers whose flights were canceled when the airline melted down due to a global tech outage in July have sued the airline in a class action, alleging that Delta refused or conditioned refunds to passengers as it struggled with mass cancellations.

The lawsuit, which seeks class action status, is one of the first legal actions to emerge as Delta, CrowdStrike and Microsoft engage in a public battle over who is responsible — and who should foot the bill — for the widespread computer outages on July 19 that paralyzed Delta and hundreds of other companies around the globe.

“The impact on Delta passengers was disastrous,” the lawsuit said. “Delta’s failure to recover from the CrowdStrike outage left passengers stranded in airports across the country and the world and, in many cases, thousands of miles from home.”

Delta allegedly refused to give some passengers automatic refunds for canceled flights. In other cases, it would only offer partial reimbursement if passengers signed a waiver releasing the airline of any legal claims. The suit also alleges the airline refused to provide affected passengers with meal, hotel and ground transportation vouchers, leaving them “forced to spend thousands of dollars in unexpected expenses.”

Delta did not fully recover its operations over the weekend of the outage, though its competitors did. On Monday, July 22, Delta canceled more than 1,250 flights — making up nearly 70% of all domestic cancellations, the lawsuit said. The airline had already canceled more than 4,500 flights between July 19 and July 21.

The lawsuit aims to “bring this action in order to secure refunds for each and every similarly situated consumer Delta has wronged.”

One plaintiff flying from Denver to Amsterdam on Delta faced cancellations both there and back and had to pay for a flight both ways on a different airline. Delta told the plaintiff that the refund for the canceled flights would be automatic but 10 days later told them they would have to submit a request for a refund, according to the lawsuit.

“On July 31, 2024, Plaintiff submitted two refund requests: one for the original canceled flight and one for his out of pocket expenses. In response, Delta offered Plaintiff a $100 voucher to use towards a future flight with Delta,” the lawsuit said. The out-of-pocket expenses reportedly totaled nearly $2,000.

Other plaintiffs reported having to take a Greyhound bus back home because hotels and car rentals in Atlanta, Delta’s hub, were completely booked.

Another said they missed an anniversary cruise that cost $10,000 due to the cancellations.

Transportation secretary Pete Buttigieg posted on X July 25, saying that although Delta’s operations appeared to be back to normal, he remained “concerned” and that an “investigation into this breakdown will continue.”

Who is to blame?

Delta Air Lines declined to comment on the lawsuit. But its CEO, Ed Bastian, has squarely placed the blame on CrowdStrike and said the computer problems cost the airline $500 million.

Bastian claimed CrowdStrike was nowhere to be found during the meltdown.

“They haven’t offered us anything. Free consulting advice to help us,” said the Delta CEO in an interview on CNBC.

“If you’re going to have priority access to the Delta ecosystem in terms of technology, you’ve got to test this stuff,” Bastian said. “You can’t come into a mission critical 24/7 operation and tell us we have a bug. It doesn’t work.”

A person familiar with its actions confirmed to CNN that Delta had hired the law firm of high-profile attorney David Boies to pursue compensation from Microsoft and CrowdStrike.

But both CrowdStrike and Microsoft fired back in letters from their legal counsels.

Both companies claimed Delta ignored their repeated offers for help as passengers were left stranded in airports across the country. They also suggested Delta’s IT systems were not up to date, which exacerbated the meltdown.

The computer problems at Delta knocked much of its crucial crew tracking system offline for the better part of a week, making it difficult for the company to find the pilots and flight attendants it needed to fly its aircraft.

Delta’s public litigation threat “contributed to a misleading narrative that CrowdStrike is responsible for Delta’s IT decisions and response to the outage,” attorney Michael Carlinsky wrote in a letter on behalf of CrowdStrike Sunday, “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.”

Microsoft said a preliminary review suggested Delta hasn’t “modernized its IT infrastructure” though its competitors have.

“In fact, it is rapidly becoming apparent that Delta likely refused Microsoft’s help because the IT system it was most having trouble restoring—its crew-tracking and scheduling system—was being serviced by other technology providers, such as IBM, because it runs on those providers’ systems, and not Microsoft Windows or Azure,” the letter said.

“Delta has a long track record of investing in safe, reliable and elevated service for our customers and employees. Since 2016, Delta has invested billions of dollars in IT capital expenditures, in addition to the billions spent annually in IT operating costs,” a Delta spokesperson said.