NASCAR made several legal moves Thursday in hopes of preventing Michael Jordan-owned 23XI Racing and Front Row Motorsports from gaining ground in their high-profile antitrust dispute.
NASCAR filed an emergency motion for a partial stay of an injunction U.S. District Judge Kenneth D. Bell issued Wednesday in favor of 23XI Racing and Front Row and requested he grant an expedited briefing schedule as Christmas approaches. Bell recently assumed the case from U.S. District Judge Frank D. Whitney, and NASCAR questioned his handling of it. NASCAR also gave notice to the North Carolina federal district court of its forthcoming appeal to the U.S. Court of Appeals for the Fourth Circuit.
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NASCAR wants Bell to issue a stay pending the appeal because it maintains he erred in applying the law. NASCAR also contends it would suffer irreparable and substantial harm without a stay.
Unless the injunction is stayed by Bell or vacated by the Fourth Circuit, NASCAR will be barred from denying 23XI Racing and Front Row the same terms offered to charter teams and barred from requiring 23XI Racing and Front Row release legal claims. NASCAR objects to this arrangement since it would provide 23XI Racing and Front Row a better deal than charter teams enjoy. The injunction also blocks NASCAR from refusing to approve the teams’ purchase of two Stewart-Haas Racing (SHR) charters, which will let 23XI Racing and Front Row compete and guarantee them a starting position in NASCAR-sanctioned races.
As Sportico detailed, Bell was persuaded by 23XI Racing and Front Row because their drivers and sponsors communicated they might cut ties with them if they didn’t soon land charters for next season. Bell also adopted a noticeably more critical view of NASCAR than Whitney, who last month denied 23XI Racing and Front Row an injunction but was reassigned from the case last week.
NASCAR requests that Bell stay the injunction except for Bell’s requirement that NASCAR guarantee entry of two cars from both teams in each race of the 2025 Cup Series.
In a brief signed by attorney Christopher S. Yates of Latham & Watkins, NASCAR raises several arguments.
Foremost, NASCAR believes it will likely succeed in appealing Bell’s order to the Fourth Circuit. While prefacing with “respectfully,” NASCAR asserts Bell “procedurally and substantively” erred by approving 23XI Racing and Front Row’s purchase of SHR charters.
NASCAR says it was “never given the opportunity” by the court “to brief issues related to those” charter transfers, and that caused a defective legal process. The association also insists that Bell, who took over for Whitney last week, confused key terms related to the transfers. NASCAR suspects Bell regards the release provision with suspicion because of his supposed “misunderstanding” that the provision operates prospectively when it does not. NASCAR cites precedent for the position that waivers that only retroactive and ongoing conduct from antitrust scrutiny are lawful.
As a second argument, NASCAR asserts it will suffer irreparable harm (which means a harm that money damages can’t remedy) unless a stay is granted.
To that end, NASCAR maintains the injunction would “eliminate NASCAR’s rights” under the charter—a “binding contract that SHR already executed”—to review and reject transfers. NASCAR’s “sanctity to contract” would also be threatened since the injunction would “destroy the arbitration provision in the SHR charter” and prevent the parties from employing foundational contract law rights to modify a deal. NASCAR also warns of irreparable harm caused by having to “provide Plaintiffs with confidential, competitively sensitive information” as part of the injunction.
In addition, NASCAR maintains its stay would not meaningfully harm 23XI Racing and Front Row, since they would still be guaranteed entry of two cars each in each 2025 Cup Series Race. The stay, as NASCAR tells it, would only ensure it is not “forced . . . to extend all the benefits of an agreement that Plaintiffs rejected and refused to sign.”
NASCAR further requests that Bell move quickly on reviewing its motion for a stay because 23XI Racing and Front Row intend to “imminently close their acquisitions” of SHR charters, with a closing date set for Friday. NASCAR worries it would be “difficult, if not impossible, to unwind” a deal after it closes. To address that concern, NASCAR proposes that 23XI Racing and Front Row file a responsive brief to the motion to stay by next Monday.
There’s some irony with NASCAR’s demand that the attorneys work as a major holiday, Christmas, nears. In November, NASCAR objected to 23XI Racing’s and Front Row’s proposed scheduling that would have required working during the Thanksgiving break.
Expect Jeffrey Kessler and other attorneys 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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