It’s been known for well over a month that NASCAR would appeal a preliminary injunction decision made by the district judge overseeing the lawsuit brought against it by 23XI Racing and Front Row Motorsports.
But now, through a filing brief due on Wednesday, NASCAR has shown its first signs over how it will argue its case to the Fourth District of Appeals in Richmond, Virginia. All italicized words below come from the NASCAR brief issued by lead attorney Chis Yates and his team at Latham & Watkins.
The district court’s injunction orders flout federal antitrust law; misapply the established rules governing the use of preliminary injunctions; ignore unrebutted, legally significant evidence; and have sweeping implications for NASCAR’s 2025 Cup Series season. Any one of the district court’s many errors warrants reversal.
Much of the filing was a history lesson of sorts, filling in the appeals court with the timeline of everything that has happened since the charter system began its conception back in 2014. But the filings ultimately arrives to the point that arguing that federal judge Kenneth D. Bell erred in granting de facto charter status to the two teams through the end of this season with a trial set for December 1.
The judge did so under the legal conviction that it restored the status quo between the two parties prior to the breakdown in negotiations over the charter agreement extension that preceded the lawsuit.
NASCAR says this is not the status quo because the district judge forced the Sanctioning Body to provide benefits that the teams did not agree to receive.
The district court’s decisions were riddled with errors, each warranting reversal of its injunctions. First, the district court mistakenly held that Plaintiffs’ requested injunctions maintain the status quo, bypassing the heightened standard for securing ‘mandatory injunctions.’ But the injunctions here disrupt the status quo by forcing NASCAR to provide Plaintiffs with the benefits of a contract they rejected and NASCAR subsequently withdrew. The mandatory-injunction standard clearly applies, and Plaintiffs have not met it.
Second, even if the heightened standard did not apply, the district court erred by concluding that Plaintiffs are likely to succeed on the merits of their Sherman Act Section 2 claim. Plaintiffs have not established the most basic element of their Section 2 challenge—a valid market. But even if Plaintiffs had established a valid market, the district court erred in concluding that the Charter’s release violates the antitrust laws. The district court failed to assess whether releasing claims against NASCAR is anticompetitive—a fundamental requirement for any Sherman Act claim purportedly supporting these injunctions.
Instead, it concocted a new legal standard focused on whether the release was a ‘condition of market participation,’ without citing any precedent backing such a rule. The district court then misapplied cases about the enforceability of prospective releases, ignoring that the issue here is whether the release constitutes an antitrust violation, and the release is retrospective.
And it erroneously found that Plaintiffs suffered an “antitrust injury” just from being offered the release—without considering whether that injury was linked to a reduction in market competition. Any one of these errors requires reversal.
What this means: NASCAR is going to argue to the appeals court that the judge deciding that the ‘release clause’ in the charter agreement, one that prevents teams from bringing litigation against the sanctioning body, was an incorrect legal interpretation.
NASCAR is also going to argue against the basis for Judge Bell granting the teams chartered status, which was 23XI and Front Row proving to Bell ‘imminent harm’ as a result of not having charters in that drivers (like Tyler Reddick) and sponsors were prepared to implement opt-out clauses in their contracts.
The sanctioning body also says it is not a monopoly as it faces competition from Formula 1 and IndyCar.
NASCAR has consistently faced competition from these other circuits for fan attention, talent, and sponsors. For instance, many NASCAR drivers have raced in other motorsports leagues, such as IndyCar, Formula 1, IMSA, the Championship Auto Racing Series (CARS) Tour, the United States Auto Club (USAC), and the International Motor Contest Association (IMCA)—among others.
NASCAR also competes with other sports—like Major League Soccer (MLS), Major League Baseball (MLB), the National Basketball Association (NBA), and the National Collegiate Athletic Association (NCAA)—for fan attention, sponsors, and broadcast coverage.
And NASCAR competes with other sports and entertainment options for partnerships and investment dollars. For instance, Michael Jordan, co-owner of Plaintiff 23XI, has held ownership stakes in MLB, NBA, and NASCAR teams, a motorcycle racing team, restaurants, and car dealerships.
It also argues against the monopolization claims with examples like Team Penske that competes in NASCAR, IMSA and IndyCar.
Even after forming Cup Series teams, motorsports organizations like Plaintiffs can and do offer their services and assets to other leagues if NASCAR’s terms are not competitive. For instance, Team Penske—a professional auto racing organization founded by former Cup Series driver Roger Penske—routinely supplies racing teams not only to NASCAR, but also to other racing circuits like IndyCar.
The teams have argued that NASCAR is a specialized motorsports discipline entirely different than any other form and that if Michael Jordan, for example, wanted to enter F1 or IndyCar, he could have, but he chose to enter NASCAR instead, which the teams argue have no substitute.
Each of NASCAR’s broad arguments in response — and this is just a brief and not a detailed legal argument — which come later … can be viewed in its entirety below.
Its ultimate conclusion is as follows:
The district court abused its discretion in awarding mandatory preliminary injunctions in this case by committing several legal errors. First, it erred as a matter of law in holding that the injunctions did not trigger the heightened standard for ‘mandatory injunctions.” Second, it erred as a matter of law in concluding that Plaintiffs are likely to succeed on the merits of their Sherman Act Section 2 challenge based on a standard release provision. And, third, it erred as a matter of law in issuing relief that contradicts the allegations in Plaintiffs’ complaint.
Each of these errors independently requires reversal.
TV revenue split details
Also, for the first time, NASCAR appears to divulge that it now has a 50 percent broadcast revenue split with charter teams … and having to share that with the two teams that didn’t agree to the terms to receive it is something it feels is unlawfully applied by the district judge.
NASCAR’s undisputed evidence shows that team owners can receive approximately 50% of NASCAR’s media revenues attributable to the Cup Series under the 2025 Charter—a substantial increase from what they received in 2016, which was itself an increase from prior years.
This is an important part of NASCAR’s argument because it has claimed all winter that monopolies do not increase revenue to their victims.
And with revenues increasing, NASCAR argues that the teams suing, who also did not sign the charter agreement extension, has no legal claim to this revenue.
At this point, NASCAR would prefer to extend the perks of the 2025 Charter to owners committed to enhancing NASCAR’s competitiveness with other sports for fans, sponsors, and media dollars—rather than owners that undermine NASCAR’s brand and seek advantages over other owners in Charter terms.
Full document
Charter negotiation timeline
What the charter system is
Why it’s a doomsday scenario if a deal is not reached
Teams hired top antitrust lawyer against NASCAR
Jeff Gordon on why the business model needs to change
Michael Jordan says NASCAR will die without charter permanence
Denny Hamlin says teams just want break even revenue
NASCAR’s June offer to teams ‘was worst yet’
Denny Hamlin on why charters need to be permanent
Smaller teams unified with larger teams
NASCAR, teams making progress on charter deal but hurdles remain
Steve Phelps speaks to Kevin Harvick in wide ranging interview
How drivers feel about the state of the negotiations
Hamlin says negotiations will continue until NASCAR is reasonable
23XI, Front Row refuse to sign NASCAR’s final offer
Denny Hamlin defers to 23XI statement
Brad Keselowski said time was right for a deal
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
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