Federal appeals court skeptical over NASCAR antitrust case

Although Michael Jordan’s 23XI Racing team and Front Row Motorsports won a preliminary injunction in their antitrust lawsuit against NASCAR last December, it might not stand up to scrutiny on appeal.
The case went before a panel of three judges in the Fourth Circuit Court of Appeals on Friday in Richmond, Va. The judges appeared to lean toward NASCAR’s argument that the basis of the injunction was flawed.
23XI Racing and Front Row Motorsports were granted an injunction that allowed them to operate as chartered NASCAR teams despite not signing a charter. The two teams had refused to sign a take-it-or-leave-it charter agreement presented last September, which the other 13 organizations in the Cup Series signed.
NASCAR filed its appeal in February. NASCAR asserted that U.S. District Judge Kenneth D. Bell misapplied antitrust laws and portrayed the release of claims as standard business practice, not anti-competitive conduct.
“If you don’t want the contract, you don’t enter into it and you sue,” U.S. Circuit Court Judge Paul Niemeyer said. “Or if you want the contract, you enter into it, and you’ve given up past releases. But I think our Omega observation (referencing a 1997 case between a travel agency and TWA) is you can’t have your cake and eat it too.”
If the injunction is overturned and the two teams can no longer operate as chartered members, they can still compete in the Cup Series as open teams. NASCAR attorney Christopher Yates noted that the teams would have qualified for every race so far this season even without charter status.
However, the attorney representing 23XI and Front Row, Jeffrey Kessler, argued that it would be too disruptive to overturn the initial ruling midstream.
“It will cause havoc to overturn this injunction in the middle of the season, while if it just stays into effect till November, we’re done,” Kessler said. “And then we’ll have a trial and we’ll either win or lose.”
NASCAR’s recent countersuit against 23XI and Front Row said they were engaging in an “illegal cartel” to try to extract more favorable contracts from the racing league.
A trial is set for Dec. 1, but it is unknown whether the panel will make a decision regarding the injunction anytime soon.