Delta Air Lines’ (DAL) claim that CrowdStrike (CRWD) engaged in “gross negligence” and “willful misconduct” related to the July global tech outage would be difficult to prove, Wedbush Securities said in a Friday client note.
CrowdStrike’s legal counsel, Michael Carlinsky, said in a July 29 letter to David Boies, who is representing Delta, that any liability by CrowdStrike is contractually capped at an amount in the single-digit millions. Boies rejected that cap in a Thursday letter.
“The contract does not cap liability or damages for gross negligence or willful misconduct,” according to Boies’ letter.
Proving an entity engaged in gross negligence and willful misconduct has a high bar, according to Wedbush, citing discussions with legal experts. “That said, the situation remains fluid,” analysts led by Taz Koujalgi wrote in the note.
Wedbush has an outperform rating on CrowdStrike’s stock with a 12-month price target of $315.