Oct 28, 2024

By Sam Ogozalek, Oriana Pawlyk and Chris Marquette

Quick Fix

— Despite a multimillion-dollar settlement with the Justice Department, the legal troubles are far from over for the owner of the ship that crashed into Baltimore’s Francis Scott Key Bridge.

— Delta Air Lines filed a lawsuit against CrowdStrike, after a faulty software update sparked travel chaos this summer.

— East and Gulf coast dockworkers confirmed they are returning to the bargaining table next month after a brief strike sparked economic and political headaches.

IT’S MONDAY: You’re reading Morning Transportation, your Washington policy guide to everything that moves. We’re glad you’re here. Send tips, feedback and song lyrics to Sam at sogozalek@politico.com, Chris at cmarquette@politico.com, Oriana at opawlyk@politico.com and Cassandra at cdumay@politico.com and follow us at @SamOgozalek, @ChrisMarquette_, @Oriana0214 and @cassandra_dumay.

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Driving the day

LEGAL FIGHT AHEAD: The owner and operator of the massive container ship that struck Baltimore’s Francis Scott Key Bridge have settled with the Justice Department , but their days in court are far from over — and multiple federal probes into the deadly incident remain ongoing. The bridge collapse in March killed six construction workers and closed the Port of Baltimore for several weeks, crimping supply chains, including for the auto industry. A crucial legal case remains open in Maryland federal court, where the state has filed a claim against Singapore-based companies Grace Ocean Private Limited, owner of the Dali, and Synergy Marine Pte Ltd, the vessel’s manager. The entities are seeking to limit their liability to $43.6 million, which the state opposes.

— The case has drawn dozens of claims, including from the city and county of Baltimore and families of those who died, and is likely to drag on for months. A status and scheduling conference is planned for Tuesday . The claimants have proposed that discovery should end in late May and a trial on the liability issue should begin in December 2025. (The companies want the trial to start in January 2027.) Darrell Wilson, a spokesperson for Grace Ocean and Synergy Marine, in a statement said the companies are “prepared to vigorously defend themselves in the limitation of liability proceedings” and “establish that they were not responsible for the incident.”

INQUIRIES CONTINUE: The Dail owner and operator also face open investigations from the NTSB and Coast Guard and, potentially, the FBI. The safety board has yet to determine the probable cause, and a spokesperson said Friday there are no updates as of now, noting that a final report is expected 12 to 24 months after the accident. (So far, investigators have honed in on two blackouts aboard the ship just before it struck the bridge.) The Coast Guard has convened a Marine Board of Investigation , and a spokesperson said Sunday that due to the “complexity of the incident, a report completion date isn’t available at this time.” News articles in April said the FBI was conducting a criminal probe. The agency declined to comment.

Aviation

SHOWDOWN BEGINS IN COURT: Delta Air Lines has filed suit against CrowdStrike, one of its software providers, following a massive flight meltdown in July that included thousands of cancellations and stranded hundreds of passengers. The lawsuit was lodged Friday in Georgia’s Fulton County Superior Court. A glitch in a CrowdStrike update caused Delta IT systems to crash, leaving the airline scrambling to get them back up and running — and that meant resetting its technology manually . The suit alleges that CrowdStrike “caused a global catastrophe because it cut corners, took shortcuts, and circumvented the very testing and certification processes it advertised, for its own benefit and profit.” Delta said it suffered over $500 million in losses.

CROWDSTRIKE’S RESPONSE: “While we aimed to reach a business resolution that puts customers first, Delta has chosen a different path. Delta’s claims are based on disproven misinformation, demonstrate a lack of understanding of how modern cybersecurity works, and reflect a desperate attempt to shift blame for its slow recovery away from its failure to modernize its antiquated IT infrastructure,” the firm said in a statement.

TODAY’S THE DAY: A new DOT rule codified through the FAA reauthorization law, which requires airlines to issue prompt refunds for flight cancellations and lengthy delays, is in effect as of today. The Biden administration rolled out the rule in April , which gets refunds automatically returned to passengers in whatever form they had paid for their ticket — whether that’s cash, points or miles. Though the FAA law mandated the practice, airlines had until Monday to comply. In a statement, Airlines for America said it supports the rule and members “are happy to accommodate customers with a refund when they choose not to be rebooked.”

— MT noticed that another DOT proposal in the “pre-rule” stage finished up its review at OMB's Office of Information and Regulatory Affairs last week. The rule, which is expected to be put forward as an NPRM early next year, explores whether airlines should be compelled to offer cash compensation to passengers for significantly delayed or canceled flights. Based on its latest movement — it got a review in roughly two weeks time — it has the potential to get on a fast-track.

ABOUT THOSE DEI QUESTIONS: The Justice Department on Friday filed a response explaining its diversity, equity and inclusion policies after federal Judge Reed O’Connor, who is handling the Boeing-DOJ guilty plea agreement in a Texas court, earlier this month wanted to know how DEI would factor into the government’s decision-making when it chooses a third-party monitor to oversee the company.

— Citing a series of policies dating back to 2008, DOJ said that overall, its criminal division is “obligated to and does conduct a rigorous selection process that draws from a diverse and inclusive pool of qualified candidates and involves an individualized, merit-based selection ... while avoiding conflicts of interest and unlawful discrimination based on race, gender, or any other protected class.” The agency repeatedly stressed that regardless of the broad pool of candidates considered for the role, it “must select and does select the most qualified candidate irrespective of race or gender, or any other non-merit factor.” Here’s the filing.

Ports

BACK AT IT: The International Longshoremen’s Association and the United States Maritime Alliance, known as USMX, which represents terminal operators and shippers, said Friday they will resume contract talks in November after a nearly three-day East and Gulf coasts dockworkers strike earlier this month. To avert the walkout, the parties agreed to extend their most recent labor agreement until Jan. 15 and struck a deal on wage increases. They must hash out remaining issues, like the union’s concerns over automation technology at ports. The parties’ negotiating committees will meet in New Jersey and attempt to agree on contract terms to present to the ILA’s Wage Scale Committee and, later, all longshoremen. Whoever wins the presidential election faces the possibility of another strike — and worries of an economic crisis — just before Inauguration Day.

— “The ILA and USMX welcome the opportunity to return to the bargaining table and get a new agreement in place as soon as possible,” a joint statement said.

Rail

JURISDICTION REQUEST: Rep. Troy Nehls , (R-Texas), the chair of the House Transportation Committee’s subcommittee on rail, who is being sued by a former staffer who alleges a pattern of homophobic comments from the lawmaker and his chief of staff, wants to move the case from the federal court in Washington, D.C., to the U.S. District Court for the Southern District of Texas, according to a motion Friday.

— The lawyers for Nehls’ office argue that the lawsuit is “about a Texas resident alleging he was treated badly at his Texas job while in Texas,” and that most of the facts of the case occurred there, so it should be moved to that jurisdiction.

The Autobahn

— “ Elon Musk, enemy of ‘open borders,’ launched his career working illegally.” The Washington Post.

— “Elon Musk claims student visa permitted him to work in U.S.” The Washington Post.

— “EU, China agree to more talks on potential alternatives to EV tariffs.” Reuters.

— “Tesla rallies most in over a decade on Musk’s bold EV forecast.” Reuters.

— “Spirit Airlines plans to cut jobs and sell some planes amid looming financial struggles.” AP.

— “ US airline temporarily suspends flights to Haiti’s capital after UN helicopter hit by gunfire.” AP.

— “Musk Wins Appeal Over Tweet He Had to Delete About Union Push.” The New York Times.

— “How a Trump Victory Would Threaten Tesla’s Success in China. ” The Wall Street Journal.

— “Alan ‘Sky’ Magary, an Airline Executive Who Said No to Smoking on Planes, Dies at 82.” The Wall Street Journal.

— “Norwegian Air Shuttle Cuts Fleet Growth Expectation Due to Boeing Strike.” The Wall Street Journal.

— “ VW Pitches America’s Heartland on EVs With New Scout Pickup, SUV.” The Wall Street Journal.