Much of a Friday NASCAR response to 23XI Racing and Front Row Motorsports’ reply over the appeal to an injunction decision by a federal district judge granting the two teams charter status this season is a rehash of their previous brief to the court.
That is to say that both sides have thoroughly made their written arguments and all that remains is oral arguments before the Fourth District of Appeals in Richmond, Virginia on May 9.
NASCAR, as detailed by its Chris Yates led legal team, continues to take exception to district court Judge Kenneth D. Bell ruling that a clause inside the charter agreements since 2016 — the one preventing teams from bringing a lawsuit against the Sanctioning Body — was incorrectly applied.
Yates and Co. argue that there is no precedence to support that decision and upholding it would ‘upend standard business practices.’
Of course, the teams have stated no shortage of their own precedence that they believe support the decision ultimately reached by the district judge, and it’s just a matter of how the appeals court interprets those cases while applying them to the NASCAR Cup Series.
NASCAR’s response also points out that no participating team ever asked the Sanctioning Body to remove that lawsuit release clause until 23XI and Front Row failed to get the terms it sough in negotiating over an extension of the charter system.
The NASCAR response argues:
“Ultimately, Plaintiffs’ pursuit of Charters through this litigation—paired with their purchase of additional Charters just last year, well into NASCAR’s alleged ‘monopsony’ —confirms that this is not a genuine monopolization case.
“It is a ploy by two team owners to exploit the judicial process to secure more money and better contractual terms than they could get at the bargaining table. Yet, the notion that the Sherman Act requires even a ‘monopsonist’ to bow to whatever terms its contracting party demands has been flatly rejected by cases NASCAR cited—and Plaintiffs’ brief conspicuously ignores.”
A pillar of both NASCAR’s appeal of the injunction, but also their defense to the lawsuit at large, is that it cannot be acting in violation of federal antitrust laws because that would mean suppressing growth for teams.
“The undisputed evidence shows team owners’ compensation significantly increased with the 2016 Charter, and then significantly increased again with the 2025 Charter, all due to Plaintiffs’ joint negotiations.”
The NASCAR filing continues:
“Plaintiffs bury their heads in the sand. Plaintiffs ignore the caselaw NASCAR cited holding that preference for certain contractual terms does not equate to an antitrust violation. They ignore NASCAR’s argument that merely offering a release does not demonstrate anticompetitive conduct, relying solely on ipse dixit to label the release ‘anticompetitive’ without any further explanation or argument.
And they ignore NASCAR’s point that the enforceability of a release as a matter of public policy is distinct from whether it constitutes an antitrust violation.”
NASCAR also takes exception, and argues that it has identified, ‘critical legal errors in the decision … like the district court’s faulty market definition, which was rooted in the wrong economic theory.’
Specifically, it objects to the district court ruling effectively that NASCAR is the sole buyer of a race team like 23XI and Front Row’s business – which would be the core pillar in making it come across as a monopoly.
NASCAR has said all along and continues to here, that Michael Jordan, who co-owns 23XI with Denny Hamlin, or Front Row team owner Bob Jenkins, could do racing business elsewhere.
They said they are specialized Stock Car racing teams that only can operate in NASCAR.
NASCAR, again, rejects that from both the injunction appeals standpoint and as the basis for its defense on the original lawsuit.
“Plaintiffs offer three superficial distinctions. First, they argue that the above principles do not apply because Plaintiffs are ‘stock car racing teams,’ not individual investors like Michael Jordan.
This is mere semantics. Plaintiffs are entities formed by entrepreneurs, including Michael Jordan (who has owned multiple sports franchises) and Bob Jenkins (who owns hundreds of franchises, including multiple Taco Bell locations), to ‘fund[]’ racing teams tied to specific cars. …
Moreover, the fact that Plaintiffs are team owners who voluntarily chose to invest in NASCAR sets this case apart from NCAA v. Alston and the other cases Plaintiffs cite involving antitrust claims by athletes.
In those cases, athletes claimed that their unique skills left them trapped in a monopolistic environment with no alternate buyers to whom they could ‘sell’ their athletic services. Here, however, Plaintiffs are business entities with the freedom to choose their investments, diversify, or exit if they are dissatisfied with returns.”
And full circle, NASCAR says the rising value of charters, now estimated to cost somewhere in the range of $40 million on the open market, left both team owners a valuable exit ramp if they were ‘discontent.’
NASCAR continues to take legal exception to the teams arguing that the charter terms were not agreeable, but also successfully lobbying the district judge to rule in forcing NASCAR to recognize them as part of the system they didn’t sign up for, while also allowing the teams to purchase an additional charter in advance of the 2025 season.
NASCAR concludes:
“Plaintiffs’ market-definition argument boils down to this: An investor like Michael Jordan can create an entity for a specific investment, fully aware of the market dynamics and with countless other investment (and reinvestment) opportunities available, and then cry monopoly whenever the offered terms for a contract are not to his liking. Plaintiffs cannot cite a single case that has endorsed this argument because it defies common sense and basic economic principles.”
Full legal document
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
Judge rules against NASCAR’s motion to dismiss, trial on schedule
Injunction appeal formally filed by NASCAR
NASCAR files counterclaim
Why NASCAR is counter-suing the teams
Denny Hamlin responds to NASCAR countersuit
23XI, Front Row file for NASCAR counterclaim dismissal
