A three-judge panel from the Fourth Circuit Court of Appeals unanimously vacated a preliminary injection order Thursday that had allowed 23XI Racing and Front Row Motorsports to compete as chartered teams — and receive the financial benefits as a chartered team.
The judges stated that the district court judge who granted the preliminary injunction “abused its discretion in entering the preliminary injunction that it did.”
“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps,” said Jeffrey Kessler, attorney for 23XI Racing and Front Row Motorsports. “This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for December 1.
“We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”
There will be no impact to the teams this weekend at Michigan International Speedway. 23XI Racing, co-owned by Michael Jordan and Denny Hamlin, and Front Row Motorsports, owned by Bob Jenkins, may file a petition for rehearing before the entire Fourth Circuit Court of Appeals within 14 calendar days. That would be June 19.
Thursday’s decision by the three judges does not go into effect until seven days after the expiration of time period for 23XI Racing and Front Row Motorsports to file a petition for rehearing. That would be June 26.
This matter is only a part of the lawsuit 23XI Racing and Front Row Motorsports filed against NASCAR last year. The case is still scheduled to go to trial in December.
The teams sought the injunction last year, stating that a clause in the charter agreement prohibited teams from suing NASCAR. The teams stated that if they did not run as chartered teams they faced the possiblity of losing sponsors and drivers.
A U.S. District Court Judge Kenneth D. Bell granted the preliminary injunction on Dec. 18, stating in his opinion that “NASCAR fans (and members of the public who may become fans) have an interest in watching all the teams compete with their best drivers and most competitive teams.”
The three-judge federal appellate panel gave an indication that Thursday’s decision was likely during a May 9 hearing. One of the judges stated in the hearing: “If you don’t want the contract, you don’t enter into it and you sue. Of if you want the contract, you enter into it and you’ve given up past releases. But … you can’t have your cake and eat it too.”
The panel stated its opinion Thursday.
“In entering a preliminary injunction in this case, the district court held that the plaintiffs were likely to succeed on the merits of their antitrust action against the National Association for Stock Car Auto Racing, LLC (NASCAR), and its CEO, James France, because NASCAR, as an alleged monopolist, required the plaintiffs, as a condition of doing business with them, to enter into a release for past conduct.
“Because that theory of antitrust law is not supported by any case of which we are aware, we conclude that it was not a likely basis for success on the merits and vacate the injunction.”
The three-judge panel also stated in its opinion:
“While the plaintiffs’ complaint (by 23XI Racing and Front Row Motorsports) alleged years of conduct and contract provisions that they claimed were anticompetitive, thus attacking NASCAR’s entire business model, they requested at the same time that the district court order that they “be permitted to participate in NASCAR Cup Series events under the terms of the 2025 Charter Agreement (with the exception of the Release).” The plaintiffs therefore requested to participate in the very business that they sought to dismantle. The district court accommodated the plaintiffs’ request, explaining that, while the plaintiffs alleged broader monopolistic conduct, it was relying on only one basis to grant the preliminary injunction.
“It stated, “Plaintiffs have a likelihood of success on their allegation that the Release is unlawful. The Court emphasizes that it does not reach and expresses no opinion as to Plaintiffs’ likelihood of success on their other Sherman Act claims . . . .”
23XI Racing has three Cup teams with drivers Tyler Reddick, Bubba Wallace and Riley Herbst. Corey Heim is a development driver for the team and has run select races for the organization.
Front Row Motorsports has three Cup teams with drivers Todd Gilliland, Zane Smith and Noah Gragson.
