NASCAR, France outline continued reasons to dismiss antitrust suit

NASCAR: Daytona 500 — Credit: Mark J. Rebilas-Imagn Images

NASCAR and its chairman, Jim France, have both issued their expected responses to 23XI Racing and Front Row Motorsports over the motion to dismiss the antitrust lawsuit against the sanctioning body.

At this point, over two months into the legal proceedings, these are familiar rebuttals in making their arguments to have the cases thrown out entirely. The first motion to dismiss was made by NASCAR on December 3 and then the two teams had their chance to respond on December 16.

The below is a response to that response.

NASCAR claims that 23XI and Front Row have only filed a lawsuit because they were unable to secure all the contractual terms they sought over two years of negotiations over the charter system extension. France says he was only dragged into the suit because he is an owner of the sanctioning body.

“Antitrust law doesn’t recognize guilt by mere association,” says the filing on behalf of France, both penned by lead attorney Chris Yates.

“They seek to use litigation to obtain preferred terms, not remedy any genuine anticompetitive behavior,” the NASCAR specific filing says.

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NASCAR says that each of the things 23XI and Front Row use as evidence of anticompetitive and monopolistic behavior are time-barred and protected under a statute of limitations, such as the acquisition of the ARCA Racing Series in 2018 and the merger with International Speedway Corporation in 2019.

“Plaintiffs do not dispute that their allegations regarding NASCAR’s acquisitions of ISC and ARCA are time-barred,” says the NASCAR filing.

23XI and Front Row also allege monopolistic behavior in exclusivity arrangements with Cup Series tracks to not host any other possible competitor series, a release clause in the 2016 charter agreement that says participating teams cannot sue NASCAR and the exclusive vendor contracts for the NextGen car that debuted in 2022.

NASCAR rejects that on the merits, citing precedence as legal support.

“NASCAR’s continued implementation of these agreements does not constitute new overt acts restarting the statute of limitations.”

One such cited precedent is US Airways, Inc. v. Sabre Holdings Corp that says an overt act must ‘be a new and independent actthat is not merely a reaffirmation of a previous [one]’

NASCAR says the new and independent act is the 2025-to-2031 charter extension agreement. Citing GO Computer, Inc. v. Microsoft Corp., NASCAR also suggests that precedence suggests that renewing those terms does not reset a figurative clock.

In other words, even if NASCAR had been in violation of antitrust law, teams can not bring forth these complains because they agreed to them for years.

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23XI, Front Row respond to lawsuit dismiss motion; reiterate alleged NASCAR monopoly

NASCAR says 23XI and Front Row cannot produce evidence of antitrust injury:

“Plaintiffs claim they alleged antitrust injuries in three ways: (1) enduring ‘below competitive market terms of the 2016 Charter’ over the past four years; (2) being offered purportedly anticompetitive 2025 Charter terms; and (3) being ‘forced to compete as open teams.’

None gives rise to an antitrust injury.

NASCAR’s filing states that the 2016 charter terms were established prior to the alleged anti-competitive acts, including the acquisition of ARCA and International Speedway Corporation.

The filing says that since 23XI and Front Row have conceded they are not attempting to form a competitor entity similar to the NASCAR Cup Series, they cannot be harmed by the 13 other teams signing a charter agreement that has exclusivity provisions that prevent them also competing in another series without permission.

“Plaintiffs’ reliance on cases involving exclusivity arrangements between leagues and players — not teams — misses the mark. NASCAR ‘teams’ are investors, not inputs like specific players. Numerous sports cases have upheld similar exclusivity arrangements, underscoring the validity of these provisions.”

Referenced are USFL v. NFL and Parrish v. NFL Players Ass’n

NASCAR has spent years rejecting the notion that teams are franchises in how it negotiated the charter agreement extension but said in the Monday night filing that teams operate as franchises, and thus precedent setting cases featuring exclusive dealing arrangements between franchisors and franchisees are pertinent.

The teams will no doubt latch on to that as this likely wouldn’t have been brought to the courts if NASCAR and the teams had a franchisor-franchisee relationship.

NASCAR also rejects the court and judge Kenneth Bell’s conclusion that the release clause is unlawful.

“Releases similar to Section 10.3 have consistently been upheld in the face of similar antitrust challenges.

“Plaintiffs’ release argument hinges on the ‘part and parcel doctrine’ that only a handful of district-court cases have ever applied. Mot. But even those cases (at 15) only highlight Plaintiffs’ failure to satisfy its criteria.”

NASCAR cited Madison Square Garden v. National Hockey League and Total Vision v. Vision Service Plan as reasons the clause is enforceable.

In conclusion, the filing closes, ‘the law does not support Plaintiffs’ argument that Section 10.3 constitutes an antitrust violation.’

As for France, the individual, teams allege that he ‘directed, controlled, and/or ratified each of NASCAR’s anticompetitive and exclusionary acts’ but that these assertions are ‘far too vague to drag him into this case. Courts routinely refuse to consider such conclusory allegations parroting the legal standard.’

As it pertains to the ISC merger and acquisition of ARCA, that France is only included in the lawsuit because he co-owns NASCAR, which is not in itself, says the filing, enough for legal action.

‘The rest of their allegations are solely about NASCAR,’ the France filing says.

The filing accurately states that ARCA was acquired before France replaced his nephew Brian as CEO.

“Plaintiffs try to salvage their claims by relying on impermissible group pleading regarding ‘the France family.’ Plaintiffs argue (at 6) that their group pleading is fine because they only named one member of the France family as a defendant. But that is not the law.”