A federal district judge on Friday denied NASCAR’s motion to dismiss the antitrust lawsuit brought by 23XI Racing, which is owned by Michael Jordan and Denny Hamlin, and Front Row Motorsports. The move sends the case to pretrial discovery, where both sides will be obligated to share emails, texts and other evidence as well as provide sworn testimony on controversial and sensitive topics.
Stressing that the bar for a defendant to score a dismissal of the case is very high, U.S. District Judge Kenneth D. Bell reasoned that the two sides have offered such radically different portrayals of the legal questions that he can’t dismiss the case without seeing “what is the actual evidence” and how that evidence “informs a correct legal conclusion.”
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Bell implied the two sides, whose legal filings have at times veered into the realm of hyperbole, have overly dramatized their high-profile quarrel.
“The parties to this action cast their existential dispute in starkly different terms,” the judge opined.
Bell wrote that while 23XI Racing and Front Row frame NASCAR as “the iron-fisted monopolistic ruler of premier stock car racing” that ruthlessly imposes onerous terms on teams, NASCAR positions itself and the France Family “are the founders and guiding lights of a beloved and valuable racing series” that negotiates charter agreements featuring “reasonable” terms that “mutually benefit” NASCAR and the teams.
The judge reasoned that though the case record contains a lot of fiery rhetoric, it is short on evidence and testimony needed to assess the legal arguments. He underscored that “answers must be found” only by giving the two sides a chance to produce documents and sworn statements that bear on whether NASCAR’s system of charters, which guarantee teams a starting position in NASCAR-sanctioned races while restricting their capacity to compete in other circuits, on balance enhance or detract from competition.
The ruling is a setback for NASCAR in that it obviously wanted the case tossed, but Friday’s ruling does not mean NASCAR will lose the case. Through evidence and testimony–including from sports economists and other experts–NASCAR could establish that its charter system is essential to producing a highly marketable product that is popular with fans and broadcasters and has generated considerable earnings for teams. Although 23XI Racing and Front Row maintain charters, and accompanying requirements to release potential legal claims, are anti-competitive, NASCAR can maintain that alternative arrangements that might on the surface appear more favorable to teams would make the sport less appealing or less competitive.
Pretrial discovery is also a double-edged sword. While 23XI Racing and Front Row can make invasive requests of NASCAR, NASCAR can do the same to the two teams. For example, Jordan will be asked to provide sworn testimony and share correspondences, including with drivers. Materials that surface during discovery will likely be made publicly available, too.
NASCAR’s defense is also playing out at the U.S. Court of Appeals for the Fourth Circuit. Last month, NASCAR appealed Bell’s issuance of a preliminary injunction that bars NASCAR from denying 23XI Racing and Front Row the same terms offered to charter teams and prevents NASCAR from requiring 23XI Racing and Front Row release legal claims. The injunction also greenlighted a purchase of Stewart-Haas Racing charters. Unless vacated by the Fourth Circuit or terminated via the parties reaching an out-of-court settlement, the injunction will remain in place through the 2025 season.
The injunction also played a role in Bell’s order on Friday. In addition to denying NASCAR’s motion to dismiss, the judge also denied motion for a bond in excess of $10 million.
NASCAR wants 23XI Racing and Front Row to post a bond in excess of $10 million for each car being allowed to race. NASCAR’s logic is that it will suffer from the injunction, which arguably places 23XI Racing and Front Row in a superior position since (unlike charter teams) they are not required to relinquish legal claims. NASCAR asserts it will suffer monetary harm by virtue of 23XI Racing and Front Row gaining a share of pool money that NASCAR has contractually pledged to pay chartered teams. Without an injunction, NASCAR has maintained, the portion of pool money that would go to 23XI Racing and Front Row would go to the 30 chartered teams in the form of increased prize money. The plaintiffs disagree. They contend NASCAR won’t suffer harm if they can compete since they would be doing so under the same terms that govern the 30 chartered teams.
Bell concluded that NASCAR hasn’t yet established how it would be harmed or by what amount “by having to pay Plaintiffs as chartered teams.” He wrote that NASCAR should be distinguished from teams and other interested parties that might have a stake. Bell also noted that shares of money to be paid to 23XI Racing and Front Row depend on how their cars finish in races, which is no different than if they competed as (non-chartered) open teams. The judge noted that NASCAR can later seek recovery for damages if the Fourth Circuit overturns the injunction.
In a statement shared with media outlets, the plaintiffs’ lead attorney, Jeffrey Kessler, said he was pleased with Friday’s rulings. Although the parties could settle at any point and the litigation schedule could get delayed for a host of reasons, the parties are currently set for trial on Dec. 1, 2025, in Charlotte, N.C.
Scott Soshnick contributed to this story.
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