After a quiet week to end the month of May, a major turn in the antitrust lawsuit case between 23XI Racing and Front Row Motorsports versus NASCAR took place this week following a ruling favoring NASCAR from the U.S. Court of Appeals.
Here’s a breakdown of what happened this week.
- On Thursday (June 5), the U.S. Fourth Circuit Court of Appeals in Richmond ruled to vacate the preliminary injunction given to 23XI and FRM by the North Carolina Western District Court.
- This ruling was handed down following oral arguments that took place on May 9. You can refresh yourself on those points here.
- Circuit judge Paul Niemeyer published the court’s opinion, and he noted preliminary injunctions require “exacting standards” to be granted.
- Judge Niemeyer further detailed the difference between prohibitory injunctions, which preserve the status quo, versus mandatory injunctions, which alter the status quo.
- Because of this, showing requirements to get the injunction must “be indisputably clear,” and Niemeyer said, “it is not clear, let alone indisputably so,” that the teams had showed a likelihood of success on the merits “as necessary for a preliminary injunction.”
- A phrase that appeared in the oral arguments was that the teams can’t “have their cake and eat it too. As Niemeyer put it, the teams “requested to participate in the very business they sought to dismantle.”
- He added, the teams and the court did not show “how the release would have injured competition.” Ultimately for the teams to succeed, Niemeyer said they needed to show “that NASCAR used its monopoly power ‘…to gain a competitive advantage, or to destroy a competitor.’”
- “We therefore conclude that the district court abused its discretion in entering the preliminary injunction that it did. This is all the more true in view of the heightened standard for issuing a mandatory preliminary injunction and because the one here required two parties to engage in a business that one party claims to be illegal.”
- This opinion exclusively applies to the injunction aspect of the lawsuit.
- Jeffrey Kessler, attorney for the teams, said in a release:
“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps. This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anticompetitive and does not impact our chances of winning at trial scheduled for Dec. 1. We remain confident in our case and committed to racing for the entirety of this season as we continue to fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”
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!