“Defendants (NASCAR) motion to dismiss is a fantasy. It is based on their contested version of the facts, instead of the Complaint’s allegations. It is also based on a mischaracterization of Plaintiffs (23XI/Front Row) legal claims, a mischaracterization of the relevant input market, and a mischaracterization of governing law. It is draped in rhetoric about this being a contractual dispute when Defendants know that the Complaint is alleging facts plausibly showing Defendants’ unlawful maintenance of monopoly.”
Thus begins 23XI Racing and Front Row Motorsports in its response to NASCAR asking a federal judge from the Western District of North Carolina to dismiss the antitrust lawsuit brought against the sanctioning body by the two teams.
NASCAR asked the court on December 3 to dismiss the case, arguing that it was filed only due to ‘dissatisfaction with business negotiations that didn’t go their way’ referring to negotiations over extending the charter document that governs the sport that ended with 13 of 15 teams signing up for 2025 to 2031.
NASCAR accused 23XI and Front Row of only filing a lawsuit ‘to renegotiate contractual terms rather than address genuine anticompetitive behavior.”
NASCAR also said that the value of charters has grown from period to period, as has the enterprise value of owning a Cup Series team, rendering moot the claims from 23XI and Front Row.
23XI, Front Row’s argument
In its opposition to dismiss, 23XI Racing reiterated its months-long position that NASCAR controls the market in an anticompetitive way through its ownership of a majority of the tracks used on the Cup Series schedule, the current-generation car that can only be constructed using components mandated by the sanctioning body and contractual provisions that prevent teams from racing in other divisions without approval.
23XI and Front Row argue that antitrust injury is currently transpiring due to teams having to accept below market terms commensurate to the actual value they provide to NASCAR.
The teams, through lead attorney Jeffrey Kessler, stated the following on that front:
“The below competitive market terms of the 2025 Charter Agreements, like the 2016 Agreements, have deprived racing teams of a fair chance to earn a profit. But with no viable choice, most teams acquiesced to Defendants’ take-it-or-leave-it demand (“under duress”). Plaintiffs refused to sign the 2025 Charter Agreement because it contained a release that Defendants contend would waive Plaintiffs’ antitrust rights.
“While Plaintiffs can compete as ‘open’ teams in 2025, the even more onerous, below competitive market terms imposed on open teams will cause additional antitrust injury to Plaintiffs.’
The under duress line referenced an anonymous quote from a team owner over why 13 of the 15 ultimately chose to accept NASCAR’s final charter extension offer.
The teams made the additional following allegations of anticompetitive behavior from NASCAR in its response on Monday:
- Relevant market: Since the first charter document agreement in 2016, ‘NASCAR’s Cup Series is the only premier stock car racing series in this market; its market share is 100 percent. Defendants exercise monopsony power over the participants in this market, including Plaintiffs.’ Operating a Stock Car team is not interchangeable with IndyCar or Formula 1 so NASCAR hold the entirety of this market
- NASCAR’s exclusionary acts: The teams claim that NASCAR has ‘enforced exclusivity provisions on independent racetracks that prohibit them from hosting competing stock car racing events’ while barring chartered teams that compete in Cup ‘from competing in non-NASCAR racing events and enforced these restrictions every year. Defendants imposed more restrictive non-competes in the 2025 Charter Agreements.’ The teams also said the ‘non-compete covenants are equivalent to a group boycott of competitors depriving them of what they need to compete.’ The teams also cited forcing competitors to buy spec parts for the NextGen car that can only be purchased from vendors that were awarded development rights from NASCAR was exclusionary. 23XI and Front Row also point to the clause in both the 2016 and 2025 charter agreements that prevent teams that agree to the terms from suing NASCAR on antitrust grounds. The teams also pointed at NASCAR’s acquisition of the ARCA Racing Series and the International Speedway Corporation merger as additional exclusionary acts over the market
NASCAR argued in its motion to dismiss that the lawsuit was unreasonably delayed in that many of the issues raised were present in previous years and during the negotiations process and 23XI and Front Row responded to that as well.
“This lawsuit was not unreasonably delayed. Plaintiffs filed within weeks of rejecting Defendants’ take-it-or-leave-it imposition of the 2025 Charter Agreements, which included new exclusionary acts. … Defendants do not argue prejudice because any purported delay would have only allowed Defendants to violate the antitrust laws longer.”
NASCAR has argued that there is no injury to 23XI or Front Row because ‘Plaintiffs are free to race in any racing league that they desire—or start their own competing league’ but the teams say that is ‘based on disputed facts.’
23XI Racing and Front Row Motorsports say they cannot race in or start another premier stock car racing series because NASCAR has used its alleged monopoly power to preclude the possibility.
Where NASCAR said that the two teams ‘suffer no concrete injury’ because they chose not to sign the 2025 to 2031 charter agreement extension, 23XI and Front Row responds that they have suffered the past four years due to the ‘below competitive market terms of the 2015 charter agreement.’
23XI and Front Row also state that they will suffer antitrust injury due to being forced to compete as open teams, assuming they do not win temporary charter status through a preliminary injunction request, because open teams have even worse financial terms than those with charters.
The complete response to NASCAR can be downloaded and viewed below.
NASCAR: exclusivity can be pro-competitive
NASCAR has argued that there are non-sports examples of competitive benefits of some exclusive dealings but the teams responded that ‘none of these cases involve allegations that a monopolist used exclusive dealing to maintain its monopoly. Indeed, the case law indicates an exclusive dealing arrangement can be a Section 2 violation and an unreasonable restraint of trade when employed by a monopolist.’
The teams also said this argument, at a minimum, cannot be used as a motion to dismiss the case.
The suit against Jim France
23XI and Front Row also responded to NASCAR CEO Jim France’s motion to dismiss the lawsuit filed specifically against him alongside the one against the sanctioning body.
The teams made the following argument:
“Plaintiffs’ Complaint alleges that, since 2018, James France has used his ownership and control over NASCAR to direct NASCAR’s unlawful actions to erect barriers to entry and exclude any competition. It also alleges that he directed NASCAR to use its unlawfully maintained monopsony to impose below market terms on Plaintiffs and other racing teams. At the pleading stage, these allegations must be accepted as true and France’s motion to dismiss should be rejected.”
The teams argue that France ‘directed, controlled, and/or ratified’ NASCAR’s acquisition of International Speedway Corporation in 2019.’ The teams made the same argument about the rollout of the NextGen car and its vendor dynamic, ‘which force teams to spend millions of dollars buying parts from NASCAR’s hand-picked single source suppliers and then preclude the teams from using these cars in any races not authorized by NASCAR.’
23XI and Front Row also accuse France of implementing monopsony power over the teams through the charter to provide teams less favorable terms than the value they believe they bring to the series.
Why did the teams sue both NASCAR and France individually?
Because “both defendants [have] sufficient notice of wrongdoing,” the response says.
“Though the Complaint references the “France family” at times, the only member of the France family named as a defendant is Jim France, and France’s unlawful conduct is separately identified. The Complaint properly contains allegations that France himself directed, controlled and/or ratified specific exclusionary acts engaged in by NASCAR since 2018, when he became the CEO and Chairman of the company.”
Bold emphasis above is the teams’ in their response filing.
“Here, by contrast, Plaintiffs have alleged France’s dominant role in controlling, directing and/or ratifying NASCAR’s anticompetitive and exclusionary acts. … These factual allegations state a Sherman Act claim against Jim France that cannot be dismissed at the pleading stage.”
The complete response to France can be downloaded and viewed below.
What now?
The teams are asking for oral arguments in a hearing. Judge Kenneth Bell will decide to dismiss case and would do so if he views no apparent violation of law. If he does not dismiss the case, then discovery begins, meaning the teams and NASCAR will receive access to documents and financial records. The judge would also set a hearing.
This is all independent of the preliminary injunction decision, which is also taking place simultaneously, and will determine if Judge Bell forces NASCAR to recognize 23XI and Front Row as charter protected teams through the duration of the lawsuit, and also whether to force the Sanctioning Body to approve the transfer of charters sold by Stewart-Haas Racing to Front Row and 23XI.
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
Matt Weaver is a Motorsports Insider for Sportsnaut. Follow him on Twitter.