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NASCAR has been denied its attempt to dismiss the antitrust lawsuit it’s currently involved in with teams 23XI Racing and Front Row Motorsports.
These two racing teams, who initiated the lawsuit, are accusing NASCAR of monopolistic practices, particularly concerning their charter agreements. This new ruling by the federal judge, U.S. District Judge Kenneth D., will allow the argument from those involved to be fully fleshed out.
Judge Bell explained that both sides of the lawsuit portrayed their issues quite differently.
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23XI Racing and Front Row Motorsports describe NASCAR, led by the France family, as enforcing unfair and monopolistic control over the sport with restrictive terms.
On the other hand, NASCAR and the France family view themselves as the founding figures of a beloved racing series who have established these charter agreements in a fair and mutually beneficial manner.
The lawsuit revolves around NASCAR’s charter system. Introduced in 2016, this system offers guaranteed spots to 36 cars in each NASCAR event as long as teams meet specific performance criteria.
Unlike the one-race-at-a-time entry system that preceded it, charters can be bought, sold, and leased, with binding contracts that can be revoked by NASCAR.
The current conflict began during the negotiation of a new charter agreement, which extends to 2031. 23XI Racing and Front Row Motorsports were the only teams that chose not to sign the new agreement, arguing that the terms were anti-competitive and favored NASCAR’s tracks and suppliers.
A key part of the lawsuit is based on the assertion that NASCAR threatened to disband the entire charter system if the teams failed to sign by the deadline. That forms the crux of their antitrust allegations against NASCAR.
The refusal to dismiss the lawsuit means the case will now move towards evidence discovery and a potential trial unless a settlement is reached before then.
In his detailed ruling, Judge Bell also addressed NASCAR’s failed effort to impose a significant financial deterrent on the plaintiffs. He denied NASCAR’s request that 23XI Racing and Front Row Motorsports post a bond exceeding $10 million per car as a condition of continuing to race under charter terms.
According to Judge Bell, the damage NASCAR claimed it would suffer from permitting these teams to race on charter terms was neither certain nor quantified at this stage. He explained:
“The parties to this action cast their existential dispute in starkly different terms. According to Plaintiffs, NASCAR (led by the dynastic France family) is the iron-fisted monopolistic ruler of premier stock car racing that has imposed “anticompetitive ‘take it or leave it’ terms” on Plaintiffs and other top-tier racing teams.
“In Defendants’ telling, NASCAR and the France family are the founders and guiding lights of a beloved and valuable racing series, who have fairly negotiated mutually beneficial “Charter Agreements” that reflect reasonable commercial terms between NASCAR and the race teams.
“What is the actual evidence and how does it inform a correct legal conclusion? These questions cannot be determined on motions to dismiss in this action, where Plaintiffs have sufficiently alleged one or more plausible antitrust claims against Defendants within the applicable period of limitations.
“Instead, the answers must be found when the parties have a full opportunity to pursue discovery of the relevant facts and then at trial, where the jury will be able to weigh the evidence and assess the credibility of the witnesses (unless the case is resolved sooner by the parties or the Court). Therefore, the Court will DENY the Defendants’ Motions to Dismiss.”
Commenting on the bond, Bell explained:
“The alleged harm to NASCAR of allowing Plaintiffs to race chartered cars on the same terms as the other 30 chartered teams is presently both uncertain and unquantified.
“Therefore, the Court, in its discretion, will waive the security requirement of Rule 65(c) and will not require Plaintiffs to post a bond for the issuance of the Preliminary Injunctions.
“However, by this ruling, the Court does not foreclose NASCAR’s ability to later pursue reimbursement for harm it contends that it has suffered as a result of a wrongfully entered injunction.”
The two teams, 23XI Racing and Front Row Motorsports, have gained plenty of attention, with 23XI Racing being co-owned by basketball legend Michael Jordan and NASCAR driver Denny Hamlin.
The lawsuit suggests NASCAR’s moves could unlawfully monopolize the industry, benefitting the France family financially at the expense of competitive fairness.
Both teams stress that the new charter agreement stifles healthy competition and leaves them vulnerable.
The dispute is set to go to trial in December 2025, although attempts at negotiation or further court rulings could alter this timeline.
Meanwhile, NASCAR has revealed its intention to appeal a preliminary injunction, which allowed both racing teams to participate in events as chartered members under the disputed terms for the 2025 season.