The federal judge overseeing the 23XI Racing and Front Row Motorsports v NASCAR lawsuit has denied the Sanctioning Body’s ‘motion to dismiss’ the lawsuit entirely and also denied its request for the teams to put money into a bond to cover 2025 charter payouts if the lawsuit fails.
This came two days after both sides made oral arguments before Judge Kenneth D. Bell in his Charlotte, North Carolina court room.
The judge summed up the matter before his court, while also explaining that the evidence provided in the motion to dismiss was not sufficient enough to end the case before the process that will lead to a trial on December 1.
Quotes from his decision are italicized below:
“The parties to this action cast their existential dispute in starkly different terms. According to Plaintiffs, NASCAR (led by the dynastic France family) is the iron-fisted monopolistic ruler of premier stock car racing that has imposed ‘anticompetitive take it or leave it terms’ on Plaintiffs and other top-tier racing teams. In Defendants’ telling, NASCAR and the France family are the founders and guiding lights of a beloved and valuable racing series, who have fairly negotiated mutually beneficial ‘Charter Agreements’ that reflect reasonable commercial terms between NASCAR and the race teams.
“What is the actual evidence and how does it inform a correct legal conclusion? These questions cannot be determined on motions to dismiss in this action, where Plaintiffs have sufficiently alleged one or more plausible antitrust claims against Defendants within the applicable period of limitations.
“Instead, the answers must be found when the parties have a full opportunity to pursue discovery of the relevant facts and then at trial, where the jury will be able to weigh the evidence and assess the credibility of the witnesses (unless the case is resolved sooner by the parties or the Court). Therefore, the Court will DENY the Defendants’ Motions to Dismiss.”
Translation: Judge Bell says that NASCAR did not provide sufficient enough reasons to throw out the lawsuit, while the two teams brought forth plausible allegations. He determined that the only way to acertain the truth is through the opening of books and documents, and then a trial.
That is ‘discovery’ and that process is just now starting and will take much of the summer to mediate and conclude.
Bond money decision
The judge also denied NASCAR’s motion asking the court to force 23XI and Front Row Motorsports to place aside in excess of $10 million each into an escrow bond to cover the amount paid to both teams through the charter system in 2025.
23XI and Front Row did not agree to terms with NASCAR on an extension of the charter agreement, unlike the 13 other organizations, prior to filing the federal antitrust lawsuit. However, it asked the court to force NASCAR to recognize the teams as chartered for just this next season alone, preserving the status quo from before the lawsuit, as to not cause ‘irreparable harm’ to the teams.
The judge determined that irreparable harm would befall the teams because Tyler Reddick had an opt-out clause in his driver contract if 23XI did not have a charter. Judge Bell also determined that a clause in the contract forcing teams to agree to not bring a lawsuit against NASCAR was likely a violation of federal law.
So then, NASCAR asked the judge to then force the teams to post a bond, because it believes it will be entitled to that charter money back should they prevail against 23XI and Front Row. NASCAR believes, in the technical terminology, that it has been wrongfully enjoined to the teams.
That injunction decision will soon be appealed by NASCAR to the fourth circuit in Richmond, Virginia.
The teams responded that charter status is ‘not a gift’ and that they are held to certain provisions to be entitled to the charter money as well — like entering non-points races, media obligations, intellectual property usage, etc.
Judge Bell wrote plainly in his decision that he believes NASCAR did not provide enough evidence to show they would be harmed in having to pay charter money to the six combined 23XI and Front Row teams in 2025.
“However, the Court finds that, at least at this point in the litigation, NASCAR has failed to particularly establish how it (as distinguished from third parties) will be monetarily harmed, or in what amount, by having to pay Plaintiffs as chartered teams.”
NASCAR argued in filings and before the judge that intended to put the money saved on the six cars towards other chartered teams, towards open car payout increases and towards marketing and activation.
The judge says NASCAR didn’t show evidence there either and even mentioned how the sanctioning body intended to use the money saved to pay its legal bills.
“NASCAR states that it might use that money to encourage new teams to become involved or promote the sport, but has not provided the Court with any specifics, saying only that the finalization of its plans is ‘forthcoming.’ Further, Plaintiffs represented to the Court at oral argument that NASCAR has told its chartered teams that it intends to retain a portion of the fixed pool money to defray its legal costs in defending this lawsuit (an assertion which was not disputed by NASCAR). Payments for ongoing legal expenses to defend this action on the merits (whether or not permitted by the 2025 Charter Agreements) would not be ‘harm’ resulting from the injunction for which a bond should be ordered.”
Judge Bell affirms that 23XI and Front Row must comply to the terms of the charter agreement in 2025 with the exception to the release clause that doesn’t allow them to sue NASCAR, therefore also providing a benefit to the Cup Series with their participation in every race.
Thus, in the eyes of Bell, no irreparable harm — just two organizations racing under the same terms as the other 13.
“While NASCAR sought to minimize the value that it will receive from Plaintiffs at oral argument, NASCAR has previously argued at length that the balance of payments and obligations for chartered teams is beneficial rather than harmful to NASCAR so, at least impliedly, the consideration paid to the chartered teams represents fair compensation for their obligations.
“However, NASCAR persuasively argued that its benefit from Plaintiffs racing as chartered teams may not be the same as received from the other chartered teams, in that Plaintiffs have not and will not be pulling their oars in the same direction as NASCAR and the other charter teams.4 Nonetheless, the alleged harm to NASCAR of allowing Plaintiffs to race chartered cars on the same terms as the other 30 chartered teams is presently both uncertain and unquantified.
“Therefore, the Court, in its discretion, will waive the security requirement of Rule 65(c) and will not require Plaintiffs to post a bond for the issuance of the Preliminary Injunctions. However, by this ruling, the Court does not foreclose NASCAR’s ability to later pursue reimbursement for harm it contends that it has suffered as a result of a wrongfully entered injunction.”
Translation: The key line at the end is important as Judge Bell says NASCAR will be permitted to go after money from the teams, should the sanctioning body prevail by the end.
Of note, the judge also revealed that the pool money issued to each charter team in 2025 is $5 million and that is prior to result-based payouts.
The full ruling
What next?
NASCAR has stated its intent to file an appeal with the Fourth District of Appeals in Virginia. It will seek to overturn the decision, either in part or holistically, the judge forcing NASCAR to recognize 23XI and Front Row has having chartered status this season, plus the order to approve the Stewart-Haas charter purchases.
But, with just over a month until the season starts, time is of the essence.
Meanwhile, Judge Bell says he will be flexible with the established trial timeline but he is not going to be flexible on the December 1 trial date, nor will he accept being ‘pinched’ in terms of discovery disputes. Bell said he ‘hates’ mediating discovery but has opted to do it with this case, instead of delegating to a magistrate judge, in order to preserve the below timeline:
- Friday January 31, 2025 | Designation of Mediator
- Saturday March 15, 2025 | Amendment of the Pleadings
- Monday June 30, 2025 | Close of Fact Discovery
- Friday September 19, 2025 | Completion of Discover
- Wednesday September 24, 2025 | Mediation Report
- Wednesday October 1, 2025 | Filing of Dispositive Motions
- Monday December 1, 2025 | Trial
Lawsuit timeline
23XI Racing, Front Row decline to sign NASCAR’s final 2025-2031 charter document
Why 23XI, Front Row filed a lawsuit against NASCAR
23XI, Front Row makes his case in antitrust lawsuit against NASCAR
Richard Childress says he had ‘no choice’ but to sign charter document
How drivers feel about the lawsuit
Michael Jordan comments on his team’s lawsuit against NASCAR
Meet NASCAR’s antitrust defense lawyer
NASCAR files injunction to be included in charter system through lawsuit
NASCAR motions against team’s preliminary injunction request
NASCAR, teams consent to redacting charter details in filings
Teams make case for injunctive relief, expedited discovery
NASCAR’s lengthy rebuttal to injunction, lawsuit
Teams respond to NASCAR response over injunction
23XI, Front Row and NASCAR go to court over injunctions
Judge rules against teams preliminary injunction request
Denny Hamlin says 23XI may not race next year
What preliminary injunction denial means for lawsuit
NASCAR drops ‘lawsuit release clause’ in open agreement
Appeal timeline rebuttal filed by NASCAR
Why 23XI may not have to race in the Clash without charters
Teams drop appeal, may re-file in district court
23XI, Front Row re-file injunction request
NASCAR opposes expedited timeline
France, NASCAR motion to dismiss, deny SHR charter transfer request
NASCAR says injunctive request still fails to show irreparable harm
Teams say NASCAR went back on its word over SHR charters
23XI, Front Row respond to NASCAR’s motion to dismiss
Judge orders NASCAR to issue charters to 23XI, Front Row
NASCAR plans to appeal injunction ruling; other details
Judge grants partial stay of injunction in blunt response to NASCAR
Teams accuse NASCAR of petulance in response to delay request
Why Judge Bell did not delay his injunction order
NASCAR wants 23XI, FRM to post bond covering 2025 charter pay
Both sides meet in court to argue motion to dismiss, bond payment
Matt Weaver is a Motorsports Insider for Sportsnaut. Follow him on Twitter.
