Federal judges rule in favor of
NASCAR in lawsuit filed by Jordan-owned 23XI and Front Row
[June 06, 2025]
By JENNA FRYER
CHARLOTTE, N.C. (AP) — A three-judge federal appellate panel ruled
Thursday in favor of NASCAR in the antitrust lawsuit filed by two
teams, one owned by Michael Jordan, and vacated an injunction that
required 23XI and Front Row be recognized as chartered teams as
their case snakes through the legal system.
Both race teams sued NASCAR late last year after refusing to sign
new agreements on charter renewals. The charter system is similar to
franchises in other sports, but the charters are revocable by NASCAR
and have expiration dates. 23XI, which is owned by Jordan and
three-time Daytona 500 winner Denny Hamlin, allied with Front Row in
suing NASCAR after 13 other organizations signed the renewals last
September and those two organization refused.
“We are disappointed by today’s ruling by the Fourth Circuit Court
of Appeals and are reviewing the decision to determine our next
steps," said Jeffery Kessler, attorney for 23XI and Front Row. “This
ruling is based on a very narrow consideration of whether a release
of claims in the charter agreements is anti-competitive 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 our fight to create a fair
and just economic system for stock car racing that is free of
anticompetitive, monopolistic conduct.”
The two teams sued and asked for a temporary injunction that would
recognize them as chartered teams for this season. The antitrust
case isn’t scheduled to be heard until December.
The teams said they needed the injunction because the current
charter agreement prohibits them from suing NASCAR. 23XI also argued
it would be harmed because Tyler Reddick’s contract would have made
him a free agent if the team could not guarantee him a
charter-protected car.
The original judge ruled that NASCAR's charter agreement likely
violated antitrust law in granting the injunction. But when they
heard arguments last month, the three judges at the the U.S. Court
of Appeals for the Fourth Circuit in Richmond, Virginia, indicated
they were skeptical of that decision.
The judges said in Thursday's ruling they were not aware of any case
that supports the lower court's theory of antitrust law, so they
vacated the injunction.
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Denny Hamlin waits for the start of a NASCAR Cup Series auto race
Sunday, June 1, 2025, in Lebanon, Tenn. (AP Photo/George Walker IV)
“In short, because we have found no support for the
proposition that a business entity or person violates the antitrust
laws by requiring a prospective participant to give a release for
past conduct as a condition for doing business, we cannot conclude
that the plaintiffs made a clear showing that they were likely to
succeed on the merits of that theory,” the court said. “And without
satisfaction of the likelihood-of-success element, the plaintiffs
were not entitled to a preliminary injunction.”
The teams have 14 days to appeal to the full court. The injunction
also has no bearings on the merits of the case, and the earliest
NASCAR can treat the teams as unchartered — a charter guarantees
their organizations a starting spot each week and prize money — is
one week after the deadline to appeal, provided there is no pending
appeal.
NASCAR has not said what it would do with the six charters held by
the two organizations if they are returned to the sanctioning body.
There are only 36 chartered cars for a 40-car field. If the teams do
not appeal, the six entries would have to compete as “open” cars —
which means they'd have to qualify on speed each week to make the
race and they would receive a fraction of the money.
It's not clear what would happen to Reddick's contract. He goes to
Michigan this weekend ranked sixth in the Cup Series standings. Both
organizations are still seeking a win this season — Hamlin's three
victories are with Joe Gibbs Racing, the team he drives for.
Reddick is last year's regular-season champion and competed for the
Cup title last November.
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