NASCAR rebuffs additional request for injunction

NASCAR has slammed two of its racing teams for seeking the “extraordinary” relief of an already-refused court-mandated contract allowing them to compete in every race without waiving their antitrust claims. 

The stock car racing association said in a filing on Wednesday that 23XI Racing and Front Row Motorsports are trying to “have their cake and eat it too” by seeking to dismantle NASCAR’s business model of “chartered” teams through a monopolisation lawsuit while applying for a preliminary injunction to extract their desired contract terms.

“Regardless of the outcome of this litigation, NASCAR cannot be forced into a contractual relationship with Plaintiffs,” said its counsel at Latham & Watkins.

NASCAR also argued that the US Court of Appeals for the Fourth Circuit’s decision overturning an initial preliminary injunction awarded to the teams foreclosed their latest demand for “extraordinary relief”.

Last October, 23XI Racing and Front Row sued NASCAR for allegedly using acquisitions and restrictive contracts to block competition for the sport. 

The plaintiffs claimed NASCAR sought to force them to sign a new contract for 2025 that would require them to waive any future antitrust claims against the stock car racing association and sign over intellectual property rights in exchange for being a “chartered” team with guaranteed entry to all races. 

The US District Court for the Western District of North Carolina sided with the plaintiffs, issuing an order requiring NASCAR to grant the two teams charters because the release clause itself violated the Sherman Act. 

However, the Fourth Circuit reversed the decision earlier this month. The appellate panel said the release clause likely did not violate antitrust law, and regardless, the lower court could not force NASCAR into signing those contracts. 

23XI Racing and Front Row now seek a similar injunction to block NASCAR from selling their charters until after the trial in December. They said on Monday that the Fourth Circuit only considered the release clause while ignoring the broader threats they face from NASCAR’s alleged monopolisation scheme. 

“NASCAR has signaled its intention to immediately move to sell or issue Plaintiffs’ charters to other entities – putting Plaintiffs in irreparable jeopardy of never getting their charters back and going out of business,” they wrote.

On Wednesday, NASCAR argued that this is functionally the same request that the Fourth Circuit already shot down. The plaintiffs still seek to have charters without the release of antitrust claims that the Fourth Circuit upheld, it said. 

That opinion both forecloses the lower court from approving the request and means the plaintiffs are not likely to succeed on their claims, NASCAR said.

“There is no logical basis for their request that the Court issue injunctive relief excising any such release terms,” it added.

NASCAR also argued that 23XI and Front Row will not suffer irreparable harm if they lose their charters, noting various public statements in which officials on the teams said they would still race regardless. 

“It is impossible to reconcile the story Plaintiffs are telling the Court, with what they are saying outside the Court,” NASCAR said. 

NASCAR then accused the plaintiffs of manufacturing evidence to support their speculative claims, but most of the challenged evidence was filed under seal.

In one example, the teams attempted to portray a text message as calling NASCAR’s contract demands “unreasonable”. However, NASCAR said it later discovered that the text was about Curtis Polk, who co-leads 23XI with Michael Jordan, planning to publicly protest the charter contract negotiations at a race. 

“Whether a jury will ultimately credit Plaintiffs’ biased and misrepresented evidentiary shenanigans at trial is to be determined,” NASCAR said. “But at this stage nothing about the evidence presents an ‘indisputably clear’ likelihood of Plaintiffs prevailing at trial.”

23XI and Front Row declined to comment.

Counsel to NASCAR

Latham & Watkins

Christopher Yates in San Francisco, Lawrence Buterman in New York, Anna Rathbun, David Johnson and Christopher Brown in Washington, DC

Shumaker Loop & Kendrick

Tricia Wilson Magee in Charlotte, North Carolina

Counsel to 23XI and Front Row

Winston & Strawn

Jeffrey Kessler in New York, Jeanifer Parsigan and Michael Toomey in San Francisco, Matthew DalSanto in Chicago and Danielle Williams in Charlotte, North Carolina