Here is a breakdown of Thursday’s court decision and its impact:
WHAT HAPPENED THURSDAY?
A three-judge panel from the Fourth Circuit Court of Appeals unanimously ruled to vacate the preliminary injunction that a U.S. District court judge had granted 23XI Racing and Front Row Motorsports to run as chartered teams despite not signing the charter agreement.
HOW DOES THURSDAY’S DECISION IMPACT MATTERS THIS WEEKEND AT MICHIGAN?
It does not in any way.
WHY?
23XI Racing and Front Row Motorsports can file a petition for rehearing (requesting the court reconsider its decision) or a petition for rehearing en banc —meaning the full Fourth Circuit Court of Appeals addresses the matters instead of the three-judge panel.
This must be filed within 14 calendar days after entry of judgment (June 5). So that would put the deadline at June 19.
IF THE TEAMS DO NOT SEEK A REHEARING, THEN WHAT HAPPENS?
The decision by the three-judge panel becomes effective seven days after the expiration of time for filing a petition for rehearing.
In this matter, that would mean the panel’s decision could become effective on June 26 — two days before the Atlanta race.
WHAT HAPPENS IN THAT SITUATION?
The 23XI Racing and Front Row Motorsports cars would be classified as open cars instead of chartered cars.
WHAT WOULD HAPPEN TO THEIR CHARTERS?
That would be up to NASCAR.
SO 23XI RACING AND FRONT ROW MOTORSPORTS COULD CONCEIVABLY FAIL TO QUALIFY FOR RACES IF THEY LOST THEIR CHARTERS?
If they were an open team, yes, but, in the 50 races since the start of last year, only two — the Daytona 500 last year and this year — had any cars fail to qualify.
BUT BOTH TEAMS WOULD EARN LESS MONEY AS AN OPEN TEAM, CORRECT?
Yes, but before one goes too far down this road, let’s see what 23XI Racing and Front Row Motorsports decide to do after today’s court opinion. For now, 23XI Racing and Front Row Motorsports remain chartered teams and their six cars are all chartered cars.
WHAT WAS THE RESPONSE FROM THE TEAMS THURSDAY?
This is the statement from Jeffrey Kessler, the lead attorney for 23XI Racing and Front Row Motorsports:
“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps. 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.”
WHAT DID THE THREE-JUDGE PANEL STATE IN ITS OPINION?
“In entering a preliminary injunction in this case, the district court held that the plaintiffs (23XI and Front Row) 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 judges later stated in their opinion …
“In short, because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory. And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction. … We therefore conclude that the district court abused its discretion in entering the preliminary injunction that it did.
HOW DOES THIS IMPACT THE LAWSUIT 23XI RACING AND FRONT ROW MOTORSPORTS FILED LAST YEAR VS. NASCAR?
It does not. Trial is scheduled for Dec. 1.
