Federal Judge Dismisses NASCAR Counterclaim in Legal Dispute
A federal judge ruled in favor of two teams that had filed a lawsuit against NASCAR for allegations of anti-competitive practices. United States District Judge Kenneth Bell issued a summary judgment in favor of 23XI Racing and Front Row Motorsports, dismissing NASCAR’s claim that Curtis Polk, co-owner of 23XI, had illegally conspired with other teams during negotiations for new bylaws. 23XI is owned, among others, by NBA Hall of Famer Michael Jordan and three-time Daytona 500 winner Denny Hamlin. Polk, for his part, has been Jordan’s business manager for a long time. NASCAR argued in its counterclaim that a 2023 boycott of the meeting of the team owners council negatively impacted media rights negotiations and that, by the 15 organizations joining for the charter talks, the teams obtained a better deal than they would have gotten if NASCAR had negotiated separately.Judge Bell also determined that 23XI and FRM did not participate in an “unreasonable restraint of trade,” as NASCAR’s individual meetings with the teams did result in some changes to the charter agreement, and given that all charter agreements would be the same among all teams, that the teams working together in negotiations would be reasonable. Judge Bell must also rule on two other summary judgment motions. One filed by NASCAR seeking a ruling in its favor and another by 23XI and FRM to designate the market as “premier stock-car racing”. Two days of mediation last week failed to end this dispute and the case is still scheduled for a trial date of December 1 in North Carolina. 23XI and FRM are the only two organizations out of 15 that refused to sign extensions of charters, which are the core of NASCAR’s business model. A car with a charter is guaranteed income and access to weekly races, and without them both teams say they would surely go bankrupt.The boycott was a negotiation tactic “that seemed to have little impact” because NASCAR initiated individual negotiations shortly thereafter.
Judge Kenneth Bell
NASCAR indicated in its statement that it still hopes to reach an agreement. The season concludes with Sunday’s championship final in Phoenix and Hamlin is one of the four drivers eligible for the Cup title.Today’s decision has only reaffirmed my clients’ unwavering pursuit of a fairer and more equitable sport. Their determination remains strong as we continue our efforts to achieve a resolution that benefits everyone: teams, drivers, employees, partners, and fans.
Jeffrey Kessler, attorney for 23XI/FRM
“If a resolution is not reached, we intend to appeal the decision at the appropriate time.”We respect the Court’s decision, although we respectfully disagree with its legal reasoning. Our priority remains resolving this matter quickly so that all parties can focus on Championship Weekend and continue to grow the sport.
NASCAR
