NASCAR plans to appeal successful 23XI, Front Row charter injunction; asks court for delay

In advance of filing an appeal, NASCAR is requesting the federal district judge overseeing the sports antitrust lawsuit filed by two teams that compete in the Cup Series to delay the forced transfer of two Stewart-Haas Racing charters to those organizations.

In a decision issued by Judge Kenneth Bell on Wednesday, NASCAR would be forced to recognize 23XI Racing and Front Row Motorsports as if they were teams holding charters in 2025. The decision also forced NASCAR to approve the transfer of charters Stewart-Haas sold to both teams earlier in the year.

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NASCAR is asking the court to delay enforcement of approving the transfer of the charters from Stewart-Haas to 23XI and Front Row because it intends to appeal that decision on the merits to the Fourth Distric Court of Appeals in Richmond, Virginia.

The Sanctioning Body is asking for a ruling on Friday because 23XI and Front Row have indicated intent to close the acquisition process with Stewart-Haas by the end of day.

Instead of forcing NASCAR to be bound to charter terms with 23XI and Front Row, it appears that the Sanctioning Body is going to ask the court to permit both teams entry into every race but not be paid as if they were chartered team.

NASCAR says that would satisfy the imminent harm presented by drivers and sponsors having an opt-out clause if teams didn’t have a charter.

The below is from the NASCAR filing:

“At the same time, the partial stay will not prevent Plaintiffs from entering two cars from Front Row and two cars from 23XI in each race of the 2025 Cup Series, as they wish.”

Instead NASCAR is asking the court for a bond, with a redacted specified amount, to cover any payouts to the teams should they prevail in their antitrust case:

“NASCAR is also filing a motion seeking a bond as required by FRCP 65(c) with respect to the injunction requiring Plaintiffs to be allowed to operate two cars under the terms of the 2025 Charter. NASCAR understands that Plaintiffs’ primary basis for their claim of irreparable harm is that they will not have guaranteed entry into all Cup Series races.

“A stay of the injunction, except for the guaranteed-entry provision, would more appropriately address Plaintiffs’ claimed harm without requiring NASCAR to allow Plaintiffs to receive all of the benefits of a Charter (including increased monetary payments that are due to the Goodwill provision they challenge as anticompetitive). An injunction that orders NASCAR to provide all of the benefits of the contract that Plaintiffs claim is anticompetitive runs afoul of Omega.”

NASCAR says it will suffer irreparable harm without being granted this delay, called a stay. It says that the court-forced approval of the Stewart-Haas charter transfers was not a limited injunctive decision but an overly broad one.

The filing from NASCAR states, bold emphasis theirs:

“Instead, it will effectively force NASCAR into a seven-to-fourteen year contractual relationship with Plaintiffs with respect to these Charters—even though Plaintiffs have not met multiple required conditions for these Charters’ assignment. Moreover, it would be difficult, perhaps even impossible, to unwind these court-ordered transfers once they have occurred. Entering a stay before these transfers occur is crucial to prevent the consequences of an erroneous injunction from becoming irreversible.

“On top of that, this Court’s order permitting Plaintiffs to race under the 2025 Charter terms will inflict irreparable harm on NASCAR. For example, it requires NASCAR to disclose confidential information to Plaintiffs—an action that is inherently irreparable.”

In other words, NASCAR states as it has all along that 23XI and Front Row should not be entitled to receive financial benefits that it did not agree to when it chose not to sign the 2025-to-2031 charter agreement extension.

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NASCAR says that undoing this would be incredibly difficult and it would also provide 23XI and Front Row information it should not be privy to as non-chartered race teams.

The Sanctioning Body, which had previously asked the court to strike from the record the request from 23XI and Front Row to have the SHR charters court forced as part of the injunction request, still take legal exception to the teams bringing that up in a response and not the initial filing with the district court as well.

NASCAR also says that response only asked the court to approve a SHR charter transfer to Front Row and not the one purchased by 23XI.

“The Court’s decision to grant relief pertaining to the SHR transfer to 23XI as well disregards the fundamental rule that parties, not courts, are responsible for presenting the theories “entitling them to relief.”

That point was made, like most points in these legal documents, with a case precedence they believe supports the argument.

NASCAR also again made the case that 23XI and Front Row have been rewarded SHR charters that had the terms agreed to by their previous owners — the same terms that both teams suing NASCAR did not agree to — and even claim are anticompetitive and the basis for the lawsuit.

“SHR (along with 12 other teams encompassing 32 Charters) reached the required meeting of the minds with NASCAR on the terms of the 2025 Charter, which includes a release.”

This is a reference to the clause that teams that agree to the charter document also release NASCAR from a lawsuit.

“Plaintiffs and NASCAR did not. Moreover, the Court’s order did not address the fact that the signed Charters between SHR and NASCAR explicitly set forth multiple conditions that must be satisfied in order for a signed Charter to be assigned. Plaintiffs have not met multiple such conditions, including because they challenge—and thus will not agree to adhere to—the Goodwill provision in the Charter.”

Again, NASCAR says 23XI and Front Row should not be awarded only the terms of the agreement they find agreeable but without those they do not.

NASCAR also says it never got a chance to argue any of this in court because the judge granted the injunctive relief on Wednesday, right as Tyler Reddick could have used an opt-out clause in his contract, which was the basis of imminent harm that led to Judge Bell granting the two teams chartered status when he did.

And again, 23XI and Front Row motioned to include the SHR charters into their injunction in a response and not the initial brief.

“The Court’s order does not take into account these contractual grounds for denying the transfers. Instead, it mistakenly assumes that any objection to the transfer was based entirely on the release-of-claims issue.

“That is incorrect. But more important, any subjective motivation cannot override the express conditions precedent in a contract, or warrant granting injunctive relief that was not timely or properly requested at the outset of the case.

“Additionally, the Court ignored that all disputes regarding NASCAR’s contractual right to object to a transfer of a signed SHR Charter are subject to an arbitration provision. NASCAR would have elaborated on these points, and others, had it been given the opportunity to respond to Plaintiffs’ new motion.”

The full documents can be downloaded below.

76-1-1 Download

76-1 Download