NASCAR, teams head to federal court as antitrust hearing begins
Today at 07:29 PM
The first step in the antitrust lawsuit 23XI Racing and Front Row Motorsports filed against NASCAR occurred Monday as attorneys argued over the preliminary injunction the teams want for the 2025 season.
"It was a vigorous argument," Jeffrey Kessler from Winston & Strawn, the lead attorney for the teams, said afterward. "I think we made all the points we had to make, and we're going to look forward to Friday and, hopefully, get our injunction."
The hearing took place in the federal courthouse of the Western District of North Carolina before United States District Judge Frank D. Whitney. Whitney told the court both sides gave extraordinary arguments to take under advisement, and the hope is to have a decision by Friday.
NASCAR will crown its 2024 champions this weekend at Phoenix Raceway.
Most of Monday's proceedings revisited previously-filed motions and responses. However, Kessler argued before the court that 23XI Racing and Front Row Motorsports running as an open team put their standing in the industry at risk. In addition to prize money that is less than what a charter team makes, he said, drivers and sponsors could leave the organization.
"I think we laid out very clearly what our request is," Kessler said. "I think the other side worked very hard in their papers and in their presentation to present a case that doesn't exist, and I think by the end of the hearing, it was very clear what we're asking for and why we're entitled to that relief."
All of the parties involved for the race teams attended the hearing. Michael Jordan, Denny Hamlin, Bob Jenkins, and Curtis Polk all sat together behind their representation.
NASCAR chairman and CEO Jim France was in attendance, as was senior advisor Mike Helton.
The preliminary injunction is for 23XI Racing and Front Row Motorsports to compete as charter teams in 2025. As part of their argument, the teams are asking for the antitrust release clause in the charter agreement to be waived for the duration of the legal proceedings.
The release clause was a large topic of focus. It says that once a team has signed the charter – or open – agreement, they cannot sue NASCAR.
NASCAR's representation, which was led by Chris Yates of Latham & Watkins, had a slideshow deck to accompany its argument. The release clause, Yates said, is the same one all of the race teams have previously agreed to and has been the same since the original charter agreement that was introduced in 2016.
Yates also disagreed with the argument that the 2025 agreement was sprung on the race teams, given there had been over two years of negotiations. Furthermore, he said the teams had been advised in the negotiations by proficient council.
In continuing to lay out NASCAR's agreement, Yates presented quotes from owners who had signed the agreement and how they differed from the sentiments of 23XI Racing and Front Row. At one point, Yates said the merits of the plaintiff's case were "contrived" and "frankly made up."
"What are they fighting about here?" Kessler said. "They're fighting to try to get a release of claims, which they think they're going to lose. If they didn't think they were going to lose, why would they even care about this? Why wouldn't they say, 'Fine, we don't have a release. We're going to win.' That's not where they are."
The current charter agreement ends Dec. 31. It's why there is urgency for a decision on the preliminary injunction filing.
"I am optimistic that we're right," Kessler said. "Hopefully, the judge will see it the right way and that we will eventually prevail in this case. This is the first step. I've been litigating a very long time and I don't make predictions about outcomes of cases. But I felt very good, which is all I can do, that we made our case, that we were right on the facts, we were right on the law. Hopefully, the judge will agree."
NASCAR and its representatives did not speak after leaving the courtroom.
