The antitrust lawsuit case pitting 23XI Racing and Front Row Motorsports versus NASCAR continued this week, ending with an oral hearing in front of the U. S. Court of Appeals for the Fourth Circuit.
The case also continued with motions to compel in Indiana and New York, while it ended in Colorado.
Here’s a look at what happened this week.
- On May 6 (Tues.), 23XI and Front Row voluntarily dismissed their motion to compel against Liberty Media Corporation out of Colorado.
- The following day in district court in North Carolina, NASCAR submitted another reply, making the case to amend their countersuit to add extra arguments against 23XI and Front Row.
- The amendment request was granted, and NASCAR resubmitted its counterclaim on May 8. It includes further claims against the teams, including that they tried “to blow up the Charter system” and “weaponize the antitrust laws.”
- Also on May 8, more filings came in for the cases in the motions to compel in New York and Indiana. In New York, 23XI/FRM argued the NFL, NBA and NHL “have no valid basis for their blanket refusals to provide financial information that is plainly relevant” in the case against NASCAR.
- To make the case for why the leagues should compel, the teams actually used NASCAR’s recent subpoenas of Denny Hamlin, Bob Jenkins, Michael Jordan, and Curtis Polk, which were partially upheld in an April hearing.
- In Indiana, IndyCar requested another extension to respond to the motion to compel.
- On Friday (May 9), oral arguments took place in appeals court, where NASCAR argued that the district court made an error and the injunction granted to the teams must be reversed. If the injunction is reversed, the teams will have to race as open teams
- NASCAR opened with 15 minutes, followed by 20 minutes for the teams, with a final five-minute rebuttal for NASCAR.
- The judges were Judge Paul V. Niemeyer, Judge Steven Agee, and Judge Stephanie D. Thacker.
- The NASCAR side, led by Christopher Yates, argued that the release of antitrust claims the teams argued against is actually standard practice.
- The phrase many keyed in on is that NASCAR’s position is that the teams “can’t have their cake and eat it too.”
- “You can’t ask to be bound to something you’re simultaneously contending as violates the antitrust laws.”
- This means the teams can’t ask to be forced into a contract they’re also claiming is illegal.
- The teams should either give up their right to sue if they want to join in the contract, or they should remain open teams without the injunction.
- A judge later said to Jeffrey Kessler, the lawyer for the teams, “if you don’t want the contract, you don’t enter into it and you sue. If you want the contract, you enter into it and you give up past releases.”
- Kessler tried to bring up that the district court ruled because the teams would suffer irreparable harm, and the judge told him to “stay away” from the harm argument.
- The judge said, “you can bring those antitrust claims, but that doesn’t mean you get in… they’re letting you in with the preliminary injunction… you can preserve your lawsuit by not entering the contract.”
- In pointing to prior rulings, the judges indicated throughout the hearing that the district court granting the injunction goes against a long line of precedence.
- One judge said, “it’s just hard to see that, in all the history of contract law, when you bring in antitrust, that this is just an issue that’s never come up.”
- He added, “you may be able to show in trial that it’s part of an anticompetitive process, but it seems like a big hill to climb if you don’t have a case that supports you.”
- Kessler pointed out that, without the injunction, drivers could open themselves up to other teams as the season goes on.
- Injunction has some “unappetizing aspects,” according to a judge.
- Near the end of the arguments, a judge said, “I would hope the parties would take mediation seriously.”
- “We are not going to rewrite the Charter contract,” Yates responded. “Certainly we are going to participate in mediation.”
- The panel did not make a decision today, only the hearing took place.
- Reversing the injunction would not take away the lawsuit (or the countersuit) in the district court. It would take away the teams’ ability to run as chartered teams. There was also uncertainty placed on the position of the charters purchased from Stewart-Haas Racing.
Caleb began sports writing in 2023 with The Liberty Champion, where he officially covered his first NASCAR race at Richmond in the spring. While there, Caleb met some of the guys from Frontstretch, and he joined the video editing team after graduating from Liberty University with degrees in Strategic Communications and Sports Journalism. Caleb currently work full-time as a Multi-Media Journalist with LEX 18 News in Lexington, Kentucky and contributes to Frontstretch with writing and video editing. He's also behind-the-scenes or on camera for the Happy Hour Podcast, live every Tuesday night at 7:30!