Teams suing NASCAR make case for expedited discovery, injunctive relief via charter inclusion

By Matt Weaver

·Updated: October 23, 2024

The lawyers for 23XI Racing and Front Row Motorsports responded on Wednesday to a NASCAR legal response to its preliminary injunction request to remain ‘chartered’ throughout the duration of the legal process.

NASCAR argued last week that it saw no legal standing for both the preliminary injunction while also detailing its opposition to an expedited discovery process — the opening of key documents pertinent to the hearing scheduled for November 4.

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23XI Racing, co-owned by sporting legend Michael Jordan and veteran racer Denny Hamlin, are suing NASCAR on monopolistic grounds alongside Front Row Motorsports, owned by restaurant franchisee Bob Jenkins.

The basis of the lawsuit is that NASCAR and CEO Jim France has, through anticompetitive means, grown into a monopoly and unjustly enriched itself at the expense of teams that compete in the premier Cup Series level.

This came to a head over the past two years as the Sanctioning Body and teams negotiated on a new charter agreement, the document that governs the sport and details revenue sharing between the two parties, with 13 of the 15 teams ultimately signing an extension.

23XI and Front Row were the two that did not sign and brought forth a lawsuit a month later. NASCAR has argued that the document was the result of a good faith negotiations process that resulted in all but two teams signing it.

The two teams are now asking courts for a ‘preliminary injunction’ that would include them in the perks of the document, inclusion into every race and the revenue sharing provisions within, until the results of the antitrust lawsuit.

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The Plaintiffs argued that the six documents it seeks from NASCAR will not be difficult to gather and produce while also expressing conviction that courts regularly grant such discovery based on previous legal precedence.

The lawyers for 23XI Racing and Front Row Motorsports issued a strongly worded opening statement:

“Defendants’ opposition prematurely argues the merits of Plaintiffs’ preliminary injunction, misrepresents the discovery that Plaintiffs seek, and, like any monopolistic bully, attacks Plaintiffs for daring to question their authority. But it does not rebut Plaintiffs’ showing that they have established good cause for this Court to order limited expedited discovery, especially since Defendants have made no showing that such discovery would be unduly burdensome.”

NASCAR stated in its filing last week that 23XI Racing and Front Row Motorsports ‘filed a meritless suit’ that ‘alleged baseless claims in order to obtain commercial agreements they previously rejected,’ referring to wanting to be included in the charter system while also basing a lawsuit around it, ‘and attempt to extort more favorable contract terms.’

The Plaintiffs seized on the usage of ‘extortion’ in its response.

“Seeking relief from such anti-competitive terms is the opposite of “extort[ion],” —it is precisely the remedy that Congress envisioned when it adopted the injunctive relief provisions of Section 16 of the Clayton Act. It is not a defense to a monopolization claim to argue that Defendants’ victims just want a better commercial deal. What their victims want—and are entitled to—are the commercial terms that would be provided to them in a competitive market, free of monopolistic restraints.”

Section 16 of the Clayton Act authorizes “any person, firm, corporation, or association” to seek injunctive relief against threatened loss or damage by a violation of the antitrust laws.

NASCAR, in its legal filings, have motioned to deny the preliminary injunction to include the two teams under the charter system because the financial losses of racing as an open team is quantifiable and covered under damages should a case go to trial and judgement placed against the Sanctioning Body.

“To the extent Defendants are disputing the irreparable harm that Plaintiffs will suffer if they are forced to compete as ‘open’ teams, Plaintiffs will address those arguments in their merits reply brief.”

It also claims, for the same reasons, that expedited discovery is not warranted for a preliminary injunction hearing because it is not a antitrust hearing.

Citing a presumptive precedence in Teamworks Innovations, Inc. v Starbucks Corporation et al,the Plaintiffs argue that expedited discovery ‘is particularly appropriate when a plaintiff

The Plantiffs are asking for a ‘limited set of documents from six identified custodians’ related to each specific time period. Both parties have agreed to not list confidential details from the 2016 and 2025 charter agreement.

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“Here, with one exception, each discovery request seeks a limited set of documents from six identified custodians relating to specific time periods. The lone exception is Request 1, which seeks NASCAR’s sanctioning agreements with racetracks since 2016. But this request is not burdensome as it seeks clearly defined contracts from NASCAR’s central files.

“The other requests each relate to an individual exclusionary act, which took place at specific moments and only requires review of the files of six custodians. For example, Requests 2 and 3 seek documents ‘discussing’ the ‘competitive purpose or effect’ of NASCAR’s purchases of International Speedway Corporation in 2019 and Automobile Racing Club of America in 2018, respectively. Similarly, Requests 4–8 seek targeted documents ‘discussing’ the ‘competitive purpose or effect’ of specific provisions in the 2025 Charter Agreements. Defendants have failed to present any showing that this production would impose an undue burden. seeks injunctive relief because of the expedited nature of injunctive proceedings.”

In other words, as expected, NASCAR’s acquisition of sister company International Speedway Corporation and the ARCA Racing Series are part of the teams’ argument over anti-competitiveness. NASCAR has argued that’s not pertinent to the preliminary injunction hearing.

The Defendants argued last week that the ‘Plaintiffs’ overreaching requests belie their true aim: to use the antitrust discovery process as a weapon. Reasonableness and the totality of the circumstances confirm that the Motion should not be granted.’

The word ‘weapon’ was also seized upon in this response by the teams.

“Finally, Defendants’ headline-grabbing claim that Plaintiffs seek the discovery of NASCAR financials as a ‘weapon’ has no relevance here. … As Defendants know, none of Plaintiffs’ expedited discovery requests seek financial documents. That Plaintiffs may seek Defendants’ financials during merits discovery where they would be directly relevant to establishing monopoly profits and Plaintiffs’ damages—is hardly surprising.”

NASCAR also argued that the teams did not ‘timely file’ the expedited discovery motion but the teams argued that they ‘were filed contemporaneously with the preliminary injunction motion,’ and again cited the Teamworks v. Starbucks Corporation et al as presumed precedence.

The teams are asking the court to grant expedited discovery by November 1.

Simplify this for me

23XI Racing and Front Row Motorsports are asking the court to mandate that NASCAR provide six key documents relevant to both its ask to remain chartered teams through the duration of the legal proceedings.

It says that these documents are ‘narrowly tailored’ to the matter of ‘irreparable harm’ over being forced to run as open teams next season and throughout the duration of the lawsuit.

Those documents include the 2016 charter agreement, 2025 charter agreement and NASCAR’s acquisition of both ARCA and International Speedway Corporation over how it ‘discuss(es)’ the ‘competitive purpose or effect.’

NASCAR says the teams have no legal standing to ask for these documents in a preliminary injunction hearing as this is not the antitrust hearing while also arguing that teams didn’t ask for these files in a timely manner.

The teams say NASCAR was ‘served with these requests on October 9 and should have been preparing for a potential production (of documents) during this time.’

The preliminary injunction hearing is not formally part of the antitrust lawsuit. It’s more of a byproduct and something that needs to be addressed before those hearings begin since 23XI and Front Row having charters or not is important on several fronts — including whether or not both teams acquiring a third charter each will be permitted.