A computer hardware vendor that BB&T Corp. sued over a February 2018 software outage is requesting that a federal judge dismiss the lawsuit, claiming the bank failed to follow its operational advice.
BB&T filed its lawsuit against Hitachi Vantara Corp. in U.S. District Court in Winston-Salem on Nov. 26.
Since the lawsuit was filed, Hitachi has changed the name of the subsidiary to Hitachi Corp. LLC. BB&T became Truist Financial Corp. on Dec. 7, completing its $30.4 billion purchase of SunTrust Banks Inc.
The bank claims Hitachi Vantara is responsible for what the bank calls a “catastrophic” outage that kept millions of customers from using online and mobile banking services for more than 15 hours. BB&T extended branch hours on Feb. 23-24 and Feb. 26, 2018, and added employees in its customer care centers, branches and social media response teams.
“BB&T’s branch banking operations were adversely affected, as BB&T lost the ability to access centralized customer information,” the bank claimed in its complaint.
Hitachi is being sued for breach of contract, unfair and deceptive trade practices, and gross professional negligence in how it sold, installed and maintained the hardware.
Hitachi said in its response, submitted Wednesday, that the lawsuit should be dismissed because, it alleges, BB&T “failed to state a claim” against the company.
BB&T hired Hitachi in August 2014 to provide storage disk array equipment, a kind of storage system that has multiple disk drives, and services for its mainframe computer systems. The bank claims its employees are not allowed to perform any maintenance on the storage disk array or components.
Hitachi blames BB&T for “ignoring the system maker’s advice regarding how a high availability system should be architected and managed, and even more likely when the customer tries to manage the system on the cheap.”
“The length and severity of that service outage were entirely preventable. ... BB&T’s own omissions and shortcomings caused whatever losses it may have suffered.”
Thomas Crosson, Truist’s director of media relations, said Thursday that the bank “will respond to their filing during the normal course of litigation.”
When asked about whether Truist still is using the Hitachi system, Crosson said “I can’t comment on the specifics of our technology infrastructure.”
Although BB&T is requesting at least $75,000 in damages in the complaint, it is likely a potential award could be much larger given the bank is asking for compensatory damages with interest, and punitive damages, both of which could be increased by a jury.
Daryl Bible, the company’s chief financial officer, told analysts in April 2018 that “the cost was about $15 million in lower deposit service charges and about $5 million in higher operating expenses.”
The outage at its $300 million Zebulon data center began about 4 p.m. Feb. 22, 2018, with the main impact lasting between 24 and 30 hours, though some services were not restored until Feb. 26, 2018.
An outage map showed the biggest problems were in the Triad, Charlotte and the Triangle, as well as in Atlanta, Washington, Maryland and Philadelphia.
The interruption of services drew anger on social media, as BB&T customers were unable to get money out of an ATM or check whether direct-deposits had shown up or if bills had been paid.
Some customers posting on BB&T’s Facebook and Twitter pages said they planned to withdraw their money once they felt confident the accounts were reflecting accurate totals.
BB&T posted a 97-second video on its website in which Kelly King, the bank’s chairman and chief executive, apologized for the outage and explained what happened and what steps the bank planned to take.
King told analysts in April 2018 that the outage was “a simple but serious equipment malfunction ... that should cause no alarm with regard to our infrastructure in terms of information technology and its resiliency and its redundancy.”
BB&T claimed the Hitachi system began experiencing problems “almost immediately after being brought online” in June 2017, including nine separate hardware failures.
“This failure rate was extraordinary based on BB&T’s experience with similar data management systems,” the bank said.
BB&T claimed Hitachi was “grossly negligent in installing the fiber optics cables ... and performed insufficient performance testing” that it said would have caught the problems “before a critical outage occurred.”
Hitachi alleges BB&T’s claims “are not supported by any fact alleged in the complaint.”
“BB&T is simply trying to run up its damages and avoid contractual limits-of-liability protections that it agreed to.”