The respective attorneys for 23XI Racing and Front Row Motorsports v NASCAR made oral arguments in a Charlotte court on Monday regarding a ‘preliminary injunction’ that will determine whether the two teams will have charters throughout the legal process.
Charters are the documents that oversee revenue sharing and governance between NASCAR and the teams that compete in the Cup Series.
The arguments were made by their respective lead attorneys, Jeffrey Kessler (23XI, Front Row) and Christopher Yates (NASCAR) and both are leaders in the sports antitrust arena. The arguments largely focused on whether racing as an open team would result in ‘irreparable harm’ and if doing so would trigger a clause that releases NASCAR from lawsuits on monopolistic grounds.
There is a section in both the charter documents and open team entry blanks that release NASCAR from lawsuits on anti-competitive grounds — which is one of the pillars of the lawsuit.
What did we learn?
Well, for one, after hearing 35 combined minutes from each attorney, federal judge Frank D. Whitney said he would not likely have a ruling until the end of the week. It’s a reasonable conclusion because it is a dense case from a sporting standpoint and that’s before applying legal elements to it.
Whitney seemed thoroughly unfamiliar with the particulars of the case early in Kessler’s presentation.
As has been the case over the last month through NASCAR legal filings, Yates argued that 23XI and Front Row previously signed the 2016 charter agreement and thus forfeited legal standing to bring a lawsuit over the similar language present in the 2025 charter document.
Yates also argued there was no legal reason for the judge to issue an injunction because 23XI and Front Row have already publicly stated their intent to race as open teams without a charter next season.
In Yates’ words, the teams cannot claim NASCAR is anti-competitive, when those two organizations have already participated in that system previously.
Kessler, arguing on behalf of the teams, asked for one of two … or both injunctions.
The first injunction requests the judge order NASCAR to grant 23XI and Front Row charters over the course of the lawsuit due to the irreparable harm of racing without one. He said without a charter, drivers and sponsors have opt outs in their contracts that could allow them to leave for other organizations.
“If we do not have charters, our drivers are free to leave, including the driver who may be the champion of NASCAR,” an animated Kessler said to the judge.
Additionally, Kessler said there will be irreparable damage associated with potentially missing races, including the Daytona 500, throughout the season. He also said the only team to attempt to race a full season as an open team ran out of business the next season.
If the judge does not grant charters, Kessler asked that he at least waive the clause in the open team entry blank, which is the same that appears in the charter documents, that any participant cannot sue NASCAR on monopolistic grounds.
“We are seeking relief to go forward next season,” Kessler said.
Kessler said not granting the latter would make it impossible to proceed further or seek damages in judgement.
Yates argues the injunction request is too broad. He said the two teams want to be included in the charter agreement that runs for the next seven years, with a seven-year option, that both refused to sign after two years of negotiation.
In a humorous moment, Kessler joked that ‘it shouldn’t take 14 years to reach trial’ and the entire room shared a brief laughter. His point was that 23XI and Front Row are not seeking an injunction to force the Sanctioning Body into an unfavorable agreement over the next seven years but just through the trial and without releasing NASCAR of an antitrust lawsuit.
Yates also said there is no irreparable harm for 23XI and Front Row to run open because they have done so before, with previous one-off cars over the years, and know exactly what that costs over the course of the season — and that this amount would be covered in damages should the teams win judgement.
Yates also said a statute of limitations has passed over the 2016 charter agreement, but Kessler argued that doesn’t apply to the 2025 document, which effectively reset the clock.
Yates also argued that NASCAR is giving charter teams ‘nearly half’ its TV revenue starting next season. He also noted that 13 of the 15 teams signed the charter agreement extension in a preemptive shot against the antitrust suit.
“It’s contrived. It’s made up, your honor,” Yates said.
Yates argued that 23XI Racing investors Michael Jordan and Curtis Polk invested into a NASCAR team already knowing the dynamics of the sanctioning body that would eventually lead them to a lawsuit, and yet they participated anyway.
He also argued that NASCAR is not a monopoly because there are 26 tracks used by the sanctioning body, and there are tracks owned by the sanctioning body, Speedway Motorsports and a couple of independently owned venues. He said there are 128 available tracks for a start-up challenger series to use unaffiliated with NASCAR.
He also stated that race teams can choose to compete in any other discipline.
Kessler responded that NASCAR is a specialized discipline.
“You can’t go tell a football player to become a baseball player like you can’t go to a NASCAR team and say be a F1 team.”
Kessler said that makes NASCAR a stock car racing monopoly.
Ultimately, Yates argued that NASCAR no longer even wants to enter into a charter agreement with 23XI Racing due to the disparaging remarks made by Denny Hamlin, Michael Jordan and Curtin Polk in recent months but Kessler responded that just this past week, NASCAR president Steve Phelps said he liked having Jordan in the sport.
What next?
A decision on this matter is necessary before January 1, which is when the 2016 charter period ends and the 2025 charter period begins so a ruling before Friday was an acceptable timeline to both parties.
“I think we made all the points we had to make and we’re going to look forward to Friday and hopefully get our injunction,” he said.
When asked if he was optimistic about his case, Kessler said he was optimistic that ‘we are right,’ but said it was early yet.
“This is the first step,” Kessler said. “I’ve been litigating a very long time. I don’t make predictions about outcomes on cases because I’ve been surprised in the past, but I felt very good, which is all I can do, that we made our case, that we are right on the facts, we are right on the law and, hopefully, the judge will agree.”
NASCAR and its attorneys declined comment after the court session.
The NASCAR Cup Series season will end on Sunday with 23XI Racing competing for the championship at Phoenix Raceway and Jordan expressed confidence that none of this would serve as a distraction.
“I think the race team is going to focus on what they have to do this weekend, which I expect them,” Jordan said. “I think did an unbelievable job today. Hey, I put all my cards on the table. I think we did a good job of that. I’m looking forward to winning a championship this weekend.”
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