A three-judge federal appeals panel decided on Thursday to support NASCAR in the antitrust lawsuit brought by two racing teams, one of which is owned by Michael Jordan.
They also removed an injunction that had required 23XI and Front Row to be recognized as chartered teams while their case moves through the legal system.
Both racing teams filed their lawsuit against NASCAR late last year after they declined to sign new agreements for charter renewals. The charter system operates like franchises in other sports, but NASCAR can revoke the charters and they have expiration dates.
23XI, owned by Jordan and three-time Daytona 500 champion Denny Hamlin, joined Front Row in suing NASCAR after 13 other teams agreed to the renewals while they opted out.
“We are disappointed by today’s decision from the Fourth Circuit Court of Appeals and are looking over the ruling to decide our next steps,” said Jeffery Kessler, the attorney for 23XI and Front Row. “This ruling focuses narrowly on whether a release of claims in the charter agreements is anti-competitive and doesn’t affect our chances of winning at the trial set for December 1.
We are still confident in our case and dedicated to racing throughout this season as we continue to fight for a fair economic system in stock car racing that is free from anti-competitive and monopolistic practices.”
The two teams filed a lawsuit and requested a temporary injunction to be recognized as chartered teams for the current season. The antitrust case won’t be heard until December. 23XI and Front Row have 14 days to appeal to the full court, and the injunction does not affect the main issues of the antitrust case.
NASCAR can only treat the teams as unchartered one week after the appeal deadline, assuming there’s no ongoing appeal. A charter ensures that these organizations have a spot in each race and access to prize money.
NASCAR has not disclosed what it would do with the six charters held by these two teams if they are returned. There are only 36 chartered cars available for a field of 40. If the teams choose not to appeal, those six entries will need to compete as “open” cars, which means they must qualify based on speed each week to participate in races and will earn much less money.
The teams stated they needed the injunction because their current charter agreement prevents them from suing NASCAR. 23XI also claimed it would face difficulties since Tyler Reddick’s contract would make him a free agent if they couldn’t promise him a charter-protected car.
It remains unclear what will happen with Reddick’s contract. Last year’s regular-season champion is currently ranked sixth in the Cup Series standings as he heads to Michigan this weekend. Both teams are still looking for their first win of the season—Hamlin has three victories, but all were earned while driving for Joe Gibbs Racing.
