NASCAR moves to dismiss 23XI and Front Row lawsuit

Yesterday at 10:06 AM

NASCAR filed a motion on Monday for a dismissal of the antitrust lawsuit brought by 23XI Racing and Front Row Motorsports.

"Plaintiffs' Complaint is a misguided attempt to dress up private business frustrations in antitrust garb," the motion states. "Plaintiffs' bring claims barred by the statute of limitations and laches; they fail to plead any reduction in competition, meaning they do not have the required antitrust injury to establish antitrust standing; and they aim to renegotiate contractual terms rather than address anticompetitive behavior. Plaintiffs' claims should be dismissed."

The lawsuit was jointly filed Oct. 2 against NASCAR and chairman Jim France. 23XI Racing and Front Row Motorsports accuse NASCAR and the France family of being monopolistic bullies and that they've used anticompetitive practices that have prevented fair competition within the sport.

In addition to the lawsuit, a motion was filed for a preliminary injunction to race as charter teams next year while undergoing litigation. It was denied Nov. 8. After initially appealing the decision, the appeal was dropped and the request refiled in district court.

There were four different grounds for the motion to be dismissed presented by NASCAR.

The first was that "most of the Plaintiffs' claims are time-barred by the statute of limitations and laches because they concern conduct that occurred more than four years ago." Those claims were about NASCAR acquiring the ARCA Menards Series in 2018 International Speedway Corporation (ISC) in 2019, requirements for the Next Gen car in 2020, and NASCAR's exclusivity arrangements with racetracks, and the original charter agreement.

The second was that "Plaintiffs' lack antitrust standing to sustain their challenges to the 2025 Charters' release of claims and noncompete provisions, which are their only claims that arguably fall within the statute of limitations, because Plaintiffs' did not sign the Charters and their failure to secure preferred contractual terms is not antitrust injury."

23XI Racing and Front Row Motorsports were the only two teams that did not sign the 2025 charter agreement. Jeffrey Kessler, the lead attorney for the teams, issued a statement Nov. 16 that NASCAR had removed the anticompetitive release requirement in the Open agreement. It clears the way for the organizations to race as open teams next season.

Because they did not sign the agreement, NASCAR argues the two terms 23XI Racing and Front Row Motorsports are challenging (the release and non-compete provisions) do not impact them. Furthermore, because they are not bound by those provisions, they do not suffer any "concrete injury" from the terms being included in the charter agreement.

NASCAR went on to say that without a signed agreement, 23XI Racing and Front Row are free to race in any league or start their own.

"To the extent Plaintiffs are arguing that they were injured from their inability to secure better terms from NASCAR, 'ailure to secure preferred contractual terms is not an antitrust injury' and 'a breakdown in contract negotiations is outside the Sherman Act's scope.'"

The third ground made by NASCAR in its motion was that "Plaintiffs' proposed market definition is legally deficient because it analyzes the market post-investment rather than pre-investment."

And the fourth grounds for dismissal point was that "Plaintiffs have not alleged any facts demonstrating exclusionary conduct by NASCAR for two reasons. First, NASCAR did not refuse to deal with Plaintiffs; rather, NASCAR proposed contractual terms which Plaintiffs rejected and which are no longer available. Second, Plaintiffs have not pleaded any facts plausibly demonstrating that either of the two challenged Charter provisions reduces competition."

NASCAR chairman and CEO Jim France filed a memorandum in support of the motion to dismiss the case. France argues the claims against him fail for the same reasons they fail against NASCAR, and that the claims do not make plausible, factual allegations that he "actively and knowingly engaged in a scheme designed to achieve anticompetitive ends."

23XI Racing and Front Row Motorsports have until Dec. 16 to respond to NASCAR's motion for the case to be dismissed.