NASCAR took several legal actions Thursday in hopes of preventing 23XI Racing and Michael Jordan-owned Front Row Motorsports from gaining ground in their high-profile antitrust dispute.
NASCAR filed an emergency motion for a partial stay of an order U.S. District Judge Kenneth D. Bell issued Wednesday in favor of 23XI Racing and Front Row, asking him to grant an expedited briefing schedule as Christmas approaches. Bell recently took over the case from U.S. District Judge Frank D. Whitney, and NASCAR questioned his handling of it. NASCAR has also notified the North Carolina federal district court of its upcoming appeal to the U.S. Court of Appeals for the Fourth Circuit.
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NASCAR wants Bell granted a stay pending the appeal, claiming he made an error in applying the law. NASCAR also claims that without delay it would suffer irreparable and significant harm.
Unless the injunction is stayed by Bell or lifted by the Fourth Circuit, NASCAR will not be able to deny 23XI Racing and Front Row the same terms offered to charter teams and will not be able to require 23XI Racing and Front Row to release legal claims. NASCAR objects to this arrangement because it would give 23XI Racing and Front Row a better deal than charter teams enjoy. The order also prevents NASCAR from refusing to approve the teams’ purchase of two Stewart-Haas Racing (SHR) charters, allowing 23XI Racing and Front Row to compete and guaranteeing them a starting position in NASCAR-sanctioned races.
If Sportico In detail, Bell was convinced by 23XI Racing and Front Row as their drivers and sponsors advised that they could cut ties with them if they did not quickly secure charters for next season. Bell also had a noticeably more critical view of NASCAR than Whitney, who denied 23XI Racing and Front Row an injunction last month but was removed from the case last week.
NASCAR asks Bell to enforce the order, except for Bell’s demand that NASCAR guarantee the participation of two cars from each team in each race of the 2025 Cup Series.
In a brief letter signed by attorney Christopher S. Yates of Latham & Watkins, NASCAR makes several arguments.
First and foremost, NASCAR believes it will likely be successful in vacating Bell’s order at the Fourth Circuit. Although prefaced with “respectfully,” NASCAR claims Bell erred “procedurally and substantively” in approving the purchase of SHR charters by 23XI Racing and Front Row.
NASCAR says the court “was never given the opportunity” to rule on issues related to these charter transfers, and that this created a flawed legal process. The association also highlights that Bell, who took over from Whitney last week, confused key terms relating to the transfers. NASCAR suspects that Bell views the release provision with suspicion due to his supposed “misunderstanding” that the provision operates prospectively when it does not. NASCAR cites precedent for the position that only retroactive and ongoing conduct of antitrust investigations is lawful.
As a second argument, NASCAR claims it will suffer irreparable harm (meaning harm that monetary damages cannot remedy) unless a reprieve is granted.
To that end, NASCAR claims the order would “eliminate NASCAR’s rights” under the charter – a “binding contract that SHR has already executed” – to review and reject transfers. NASCAR’s “sanctity to contract” would also be at risk because the order would “destroy the arbitration provision in the SHR Charter” and prevent the parties from using fundamental rights under contract law to modify a deal. NASCAR also warns of irreparable harm caused by the need to “provide plaintiffs with confidential, competitively sensitive information” as part of the order.
Additionally, NASCAR continues to maintain that the stay would not significantly harm 23XI Racing and Front Row, as they would still be guaranteed access to two cars each in every 2025 Cup Series race. The stay would, as NASCAR puts it, only but make sure it is not “forced”. . . to extend all the benefits of an agreement that the plaintiffs rejected and refused to sign.”
NASCAR further requests that Bell take swift action in reviewing its motion for a delay, as 23XI Racing and Front Row plan to “close their acquisitions of SHR charters soon,” with a closing date of Friday. NASCAR fears it would be “difficult, if not impossible, to unwind a deal after it has closed. To address these concerns, NASCAR is proposing that 23XI Racing and Front Row file a response to the motion to stay by next Monday.
There is some irony in NASCAR’s demand that its lawyers start working as the big holiday, Christmas, approaches. In November, NASCAR objected to 23XI Racing and Front Row’s proposed schedule, which would have required work over the Thanksgiving break.
Expect Jeffrey Kessler and other lawyers for 23XI Racing and Front Row to fire back with legal briefs sometime on Friday, if not before the clock strikes midnight.
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