On Friday (May 9), NASCAR and its legal counsel convened in the U.S. Court of Appeals for the Fourth Circuit, located in Richmond, Virginia, as the sanctioning body looks to appeal an injunction awarded to 23XI Racing and Front Row Motorsports.
The injunction, which was awarded on December 18, 2024, allowed both 23XI Racing and Front Row Motorsports to compete as Chartered Entries in the NASCAR Cup Series, while also preventing NASCAR from blocking the purchase of an additional charter from the now-defunct Stewart-Haas Racing during the off-season.
In the NASCAR Cup Series, 23XI Racing fields the No. 23, No. 35, and No. 45 for Bubba Wallace, Riley Herbst, and Tyler Reddick, while Front Row Motorsports fields the No. 4, No. 34, and No. 38 for Noah Gragson, Todd Gilliland, and Zane Smith.
During Friday’s case, which took place in the Lewis F. Powell Jr U.S. Courthouse, there were three judges presiding: Judge Paul V. Niemeyer, Judge G. Steven Agee, and Judge Stephanie D. Thacker. The three judges will convene and make a ruling at a later date.
Christopher Yates, the lead attorney for NASCAR, initially had the floor to make his case on behalf of the sanctioning body for 15 minutes. Then, Jeffrey Kessler, the lead attorney for 23XI Racing and Front Row Motorsports, was allowed to speak for 20 minutes. Yates was then allowed a five-minute rebuttal.
Early in the proceedings, Judge Niemeyer cited precedent from Costco v. Omega while saying that he’s unsure why the race teams are bringing forth antitrust litigation with NASCAR, while also attempting to compete as Chartered Teams, albeit with a modified agreement.
Kessler then argued to the Appeals Court that the decision allowing 23XI Racing and Front Row Motorsports to compete as Chartered Entries in 2025 has restored some order to the garage area, while reversing that decision would throw the sport into a state of chaos.
One of the biggest talking points to suggest an impending state of chaos, are the two charters that were purchased in the off-season from Stewart-Haas Racing, one by Front Row Motorsports and one by 23XI Racing. Should the injunction be reversed, those purchased would be unwound.
“This is another example whereby overturning this now, in the middle of the season, and the purchases is going to cause all of this undisputable irreparable harm to us, the third parties, Stewart-Haas, who sold to us,” said Kessler.
Stewart-Haas Racing shuttered its four-car NASCAR Cup Series operation at the conclusion of the 2024 NASCAR Cup Series campaign and no longer competes in any racing division.
“Stewart-Haas no longer has any operation to run a team,” he added. “So, if we gave him the teams back, he has no drivers, he has no pit crew, he has nothing in the middle of the NASCAR season. It will cause havoc to overturn this injunction in the middle of the season. While if this just stays into effect until November, we’re done, and then we have a trial, and we either win or lose.”
However, Yates, on behalf of NASCAR, argues that with each day the injunction stands, there is irreparable harm caused for the remainder of the Chartered Entries in the NASCAR Cup Series – due to the re-expansion of the charter field back to 36 from an originally planned 32 providing the teams that signed the agreement with less purse money.
“The reality here is that NASCAR and the other teams are being hurt every day,” Yates said during his rebuttal. “Every day this injunction stays in place, NASCAR and other teams are being hurt.”
“NASCAR is being hurt because it is forced into a contractual relationship with a counterparty that it doesn’t want to be in a long-term contractual relationship with. Other teams are being hurt because, but for the injunction, other teams would have gotten more money.”
“Two-thirds of the season is left, we would urge this Court to act quickly, because NASCAR and other teams are being hurt.”
Towards the end of the proceedings, before adjourning for the afternoon, the Court suggested that the case between NASCAR, 23XI Racing, and Front Row Motorsports would be a perfect candidate for mediation.
Kessler, speaking on behalf of the teams, was all for the idea, saying: “Your Honor, I’m in favor of a settlement. Anytime you can make a settlement for both sides, I’m in favor of it.
NASCAR, while on board with a potential mediation between the two sides, offered some strict limits on what would and wouldn’t be acceptable in a mediation, saying the sanctioning body isn’t willing to rewrite the Charter Agreement.
“Certainly, but we’re not going to rewrite the Charter contract,” Yates said. “The Charter contract exists, and that’s what they really want at the end of the day. They don’t like the terms. They call all of the terms, they call them all below competitive. We are not going to rewrite the Charter contract, your Honor, but certainly we’re going to participate in mediation.”
Now. It’s up to the U.S. Court of Appeals to decide whether the injunction will stick.
One Response
I don’t think they should have been allowed to participate as chartered teams to begin with. They refused to sign the contracts that other teams signed and agreed to. Why would these teams be granted special treatment when they were given the same opportunity? They should lift the injunction and then they should pay the consequences for their actions instead of thinking they can always get their way.