Over the past week, the 23XI Racing and Front Row Motorsports v NASCAR lawsuit has focused its filings on whether or not the two teams should be required to post a bond to cover their charter earnings during the 2025 season in the case they do not ultimately prevail.
This is a reaction to federal judge Kenneth D. Bell granting a preliminary injunction to the teams in the form of charter status this upcoming season, a preservation of the status quo from over the summer before litigation began, and to prevent irreparable harm of befalling 23XI and FRM.
That irreparable harm came in the form of, amongst other financial considerations, an opt-out clause that several drivers and sponsors had in 2025 should their respective cars not be associated with a charter. The judge also found a clause in the charter agreement, one that forced teams from not bringing a lawsuit against them in exchange for membership, to be a likely violation of federal antitrust laws.
Short version: The judge is forcing NASCAR to recognize 23XI and Front Row as if they were charter teams this season only until this matter can be resolved through either settlement or judgment.
A trial is scheduled for December 1. This decision was made just to preserve consistency from one season to the next until the matter is resolved.
NASCAR is expected to soon file an appeal to the Fourth Circuit over that decision but is asking the court in the meanwhile to force 23XI and Front Row to put up a redacted amount of money to cover the Sanctioning Body should the teams ultimately lose.
The teams responded that NASCAR cannot show the irreparable harm or reasons necessary to justify the bond. Specifically, NASCAR is asking the court to implement a Rule 65 Bond, which is to ensure that the applicant can pay any damages or costs incurred by a party who was wrongfully enjoined or restrained.
In other words, NASCAR, which is appealing this injunction, is claiming that the temporary charter status granted by the judge was wrongful.
The teams responded to that assertion by stating the injunction wasn’t a gift and that the charter status has requirements for both parties to fulfill in 2025 as is the case for every team that is part of the agreement:
“NASCAR does not make Pool Money payments, pursuant to the 2025 Charter Agreement, as a gift to the racing teams who obtain Charter Agreement rights. The payments are made in exchange for the season-long obligations the teams undertake to NASCAR, including the commitment to compete in every Cup Series race and two exhibition races, the granting of the right to use the teams’ intellectual property rights in commercial deals for NASCAR’s benefit, the teams’ participation in various media promotions, and the teams’ agreement to the restrictive covenant not to compete which prohibits them from participating in any competing events. These commitments are especially valuable consideration from Plaintiffs, as NASCAR has publicly recognized the benefits it receives from having team owners like Michael Jordan and Denny Hamlin be a part of NASCAR. And with respect to the two transferred Stewart-Haas Racing, LLC Charter Agreements, if the transfers did not take place, NASCAR would still have to make these same Pool Money payments to whomever held those Charter Agreement rights.
Simply put, there is no harm to NASCAR in having to make Pool Money payments to Plaintiffs in exchange for their commitments to fulfill their obligations under the 2025 Charter Agreement. There is thus no potential cognizable injury for which Defendants can seek a bond.
As the Court has already found, ‘applying the charter terms to Plaintiffs’ race cars will not harm NASCAR at all. NASCAR has the same terms with 30 other cars and has repeatedly represented to the Court that those terms reflect a fair and beneficial deal for all concerned.’ No bond is required in such circumstances.”
The difference is, of course, that 23XI and Front Row did not agree to terms like the 13 other organizations that compete in the Cup Series. That was the basis of the lawsuit but also the basis in which NASCAR objects to sharing the agreed upon terms with two organizations that did not agree to them.
The teams, all under heavy redactions, listed paragraphs worth of requirements they would need to fulfill under the terms of charter recognition, even one forced by the court, especially under the conviction that many of those terms are still the result of NASCAR’s standings as a monopoly.
They concluded: “There is thus no cognizable harm to NASCAR from being required to abide by the terms of chartered team participation which NASCAR, itself, used its monopsony power to impose.”
The teams say that a bond should be no more than the nominal $500.
So where is NASCAR on this? Again, it maintains that ‘a bond is necessary to allow NASCAR to recover benefits provided to Plaintiffs through that forced agreement in the event NASCAR succeeds on appeal or ultimately on the merits.’
In other words, if the court mandated NASCAR to recognize 23XI and Front Row as chartered team but then determines that the allegations against them are not legally founded, that the teams should effectively pay back monies obtained in 2025.
NASCAR says it would have used the money it is now having to pay 23XI and Front Row’s six cars in the charter agreement towards marketing and activation, plus prize increases for all the teams that did sign the agreement.
It was also going to put more money into the open teams agreement. NASCAR says that is irreparable harm against the sanctioning body.
“In fact, NASCAR had already published increased prize money for the 2025 NASCAR Cup racing season. These larger race purses coupled with increased NASCAR spending on promotional programming and other growth initiatives would have encouraged additional Open teams to compete. Forcing NASCAR to pay Plaintiffs instead of further investing in its sport will harm these race teams, drivers, and competitors, along with NASCAR.
“Instead of working with existing teams to expand or enticing new investors to join the sport, NASCAR will instead have to pay Plaintiffs. Both Federal Rule of Civil Procedure 65(c) and Fourth Circuit precedent that Plaintiffs themselves cite make clear that a bond must issue for that harm NASCAR will suffer if NASCAR succeeds on appeal or ultimately on the merits.”
Again, NASCAR made several references to how 13 of the 15 teams that compete in the Cup Series ultimately agreed to an extension of the charter agreement, one that runs from 2025 to 2031 with a seven year option.
NASCAR says 23XI and Front Row ‘had that same opportunity in September 2024, and they rejected it.’ Furthermore, NASCAR takes exception to 23XI and Front Row treat ‘the Court-mandated relationship in which they find themselves with NASCAR as if it were the same thing. It is not.’
Because of that, NASCAR says it should be able to recoup that money should it ultimately prevail in court over 23XI Racing and Front Row Motorsports.
“In short, NASCAR is being forced to pay millions of dollars pursuant to de facto contracts it doesn’t want. That is the potential cognizable injury that Plaintiffs whistle past in their Opposition. And that is the potential cognizable injury that necessitates a bond.”
NASCAR says it would have received many of the fulfillment responsibilities perks from 23XI and Front Row, like intellectual property, had it raced as open teams without a charter. It takes considerable exception to being forced into a relationship with the two teams suing them without the ability to immediately get the 2025 charter money back if it wins the suit.
“NASCAR is now forced to be in contractual privity with teams that do not share its interest in growing the Cup Series, and which take away from the opportunities to provide more teams (including Open teams) with incentives to race in NASCAR Cup Series races. Instead, NASCAR now must pay millions of dollars to Plaintiffs, who, along with their counsel, have repeatedly made public statements intended to damage the image and goodwill of NASCAR.”
It closed its argument with numerous standard precedent cases it believes supports its argument to receive the bond amount requested from the court.
Legal filings
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
Matt Weaver is a Motorsports Insider for Sportsnaut. Follow him on Twitter.