23XI Racing, Front Row Make Third Try for Injunction Against NASCAR
In a statement shared with Sportico, a NASCAR spokesperson called it 'unfortunate' that 'instead of respecting' the two previous defeats, 23XI and Front Row 'are now burdening the District Court with a third motion for another unnecessary and inappropriate preliminary inunction.' NASCAR also claimed it has followed the judges' recommendations that the parties try to settle. NASCAR said it has made 'multiple requests' to 23XI and Front Row to try to reach a deal but 'we have yet to receive a proposal from 23XI or Front Row.'
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In Monday's filing, 23XI and Front Row attorney Jeffrey Kessler argued his clients should be granted the rights and face the obligations of the 2025 charter agreements without having to agree to a mutual release provision that would prevent the antitrust lawsuit.
Kessler wrote that public policy justifies the desired injunctive relief. He maintained that requiring 23XI—which is co-owned by Michael Jordan, Denny Hamlin and Curtis Polk—and Front Row to sign the release would 'deprive the most efficient antitrust enforcers (NASCAR teams) of remedies provided by the antitrust laws to challenge an unlawful monopoly as a condition of being able to compete at all.' Kessler further contended that, through pretrial discovery and expert testimony, his clients have cultivated a more robust and evidenced-based argument that NASCAR 'has engaged in exclusionary acts designed to maintain its monopsony in the market for premier stock car racing.'
Kessler also insisted that while the U.S. Court of Appeals for the Fourth Circuit last month vacated a preliminary injunction that had been in his clients' favor, the appellate court did so without sufficiently addressing relevant public policy arguments. The Fourth Circuit stressed that the result that 23XI and Front Row seek is unprecedented in contract law—essentially compelling NASCAR to enter a new (and undesired) contract by requiring the association to supply the benefits of a charter to 23XI and Front Row without those teams, unlike charter teams, having to agree to a release of claims.
It wasn't the first setback for the antitrust suit. Last November, U.S. District Judge Frank D. Whitney denied 23XI and Front Row a preliminary injunction. He reasoned the alleged harm from racing without a charter was too speculative and uncertain. Along those lines, Whitney found that a possible loss of revenue, drivers and sponsors to 23XI and Front Row seemed more conjectural than concrete.
But a month later a new presiding judge, Bell, issued an injunction. Bell found 23XI and Front Row had sufficiently detailed prospective harms that would arise without an injunction. 23XI driver Tyler Reddick, for instance, suggested that the absence of a charter would cause a breach of his driver and personal services agreement while 23XI driver Bubba Wallace indicated he might switch teams to race for one with a charter. As mentioned above, however, the Fourth Circuit last month ruled that Bell erred in requiring NASCAR to effectively adhere to contractual terms it did not, and would, not offer.
Bell has given NASCAR until Wednesday to file a response to the temporary restraining order demand made by 23XI and Front Row. If Bell grants the teams a TRO, NASCAR will appeal the ruling to the Fourth Circuit and hope for another win at the appellate court.
Although a trial is scheduled for December, and although NASCAR claims 23XI and Front Row won't engage in meaningful settlement talks, the odds of the parties reaching a deal before trial remain more likely than not. The parties have vast financial resources to pursue legal maneuverings, but at the end of the day, they are disputing core business issues: money and control. Chances are that as a trial date nears and as the prospect of Jordan, Hamlin, Polk, the teams' drivers, NASCAR CEO Jim France and other NASCAR officials having to testify in court becomes more pressing, the parties find common ground.
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