Federal judges overturn injunction for NASCAR teams 23XI and Front Row

RICHMOND, Va. — A federal appeals panel overturned an injunction requiring NASCAR to let two Cup Series teams run under the charter agreement.

In a blow to 23XI Racing and Front Row Motorsports, a three-judge panel in the Fourth Circuit U.S. Court of Appeals overturned a ruling that let the teams compete under the 2025 Charter Agreement as their antitrust lawsuit against NASCAR continued.

According to court documents, the agreement contained a clause that the teams must drop any antitrust claims against NASCAR. Judge Kenneth D. Bell ruled in December that the clause was anticompetitive. In his ruling, he said the teams were likely to succeed in arguing the release was unlawful, leading to the teams being granted the right to compete under the agreement without being bound to the clause.

“In practical effect, the question before the Court is – Can a monopolist require that a party agree to release the monopolist from all claims that it is violating the antitrust laws as a condition of doing business? The answer is no,” Judge Bell wrote in his ruling from a district court in North Carolina.

The federal judges questioned the district court’s reasoning. The judges argued that while the court found NASCAR had monopoly power, the court didn’t prove how NASCAR acquired or maintained that power in an anticompetitive way when they required the release – a cornerstone, the judges argued, to granting the injunction.

“The court only cited cases holding that it may violate public policy for an agreement to operate ‘as a prospective waiver of a party’s right to pursue statutory remedies for antitrust violations.’ But that case and the others cited were hardly relevant to the plaintiffs’ claims because here there is no agreement,” the judges wrote, highlighting how the teams didn’t sign the agreement. “Unlike the releases in the cases cited by the district court, the release in the 2025 Charter Agreement is not prospective. Finally, the fact that a release may violate public policy by being prospective does not make it anticompetitive, as required for a violation of the antitrust laws.

“The effect of such a release is to eliminate antitrust suits and others between parties doing business with each other, not to eliminate or injure competition.”

The judges also questioned the teams’ motives for seeking the injunction, arguing the teams “requested to participate in the very business that they sought to dismantle.”

Jeffrey Kessler, the attorney for the teams, issued the following statement:

“We are disappointed by today’s ruling by the Fourth Circuit Court of the 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 anti-competitive and does not impact our chances of winning a 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 motion for the injunction initially failed in November. A different district court judge ruled the teams needed to show more evidence regarding why they needed the injunction to avoid any “irreparable harm.”

Both 23XI and Front Row showed evidence, leading to Judge Bell’s ruling in December.

“Plaintiffs’ loss of their contractual rights with their drivers coupled with the uncertainty over racing as an “open” team is what moves the needle over the line… The ‘present prospect’ of the loss of star drivers constitutes irreparable harm that “cannot fully be rectified by the final judgment after trial,” Judge Bell wrote.

The judge also stipulated NASCAR must allow Stewart-Haas Racing to sell a charter each to 23XI and FRM without being bound to the antitrust claims release.

As the judges homed in on the ruling overturning the injunction and changing the course of the case Thursday, they wrote the following:

“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. And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction.”

According to The Associated Press, “the earliest NASCAR can treat the teams as unchartered is one week after the deadline to appeal, provided there is no pending appeal or whenever the appeals process has been exhausted.” The teams plan to appeal. Their deadline is June 19.

Read the full ruling here: