Federal Judge Dismisses NASCAR Counterclaim Against Suing Teams
A federal judge made a significant decision on Tuesday, dismissing the counterclaim filed by NASCAR against two teams that had filed a lawsuit over 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 to obtain new charters. 23XI is owned, among others, by Michael Jordan, NBA Hall of Famer, and Denny Hamlin, three-time Daytona 500 winner. Polk, in turn, is Jordan’s longtime business manager. NASCAR argued in its counterclaim that a 2023 boycott of the meeting of the team owners council negatively impacted media rights negotiations, and that the unification of the 15 organizations for the talks on the statutes allowed the teams to obtain a better agreement than if NASCAR had negotiated separately with each one. Judge Bell determined that the boycott was a negotiation tactic “that seemed to have little impact” because NASCAR began individual negotiations shortly thereafter. Bell also found that 23XI and FRM did not engage in an “unreasonable restraint of trade” because NASCAR’s individual meetings with the teams did result in some changes to the charter agreement, and because all charter agreements would be the same among all teams, that the teams working together in negotiations would be reasonable.Bell must also rule on two other summary judgment motions, one from NASCAR seeking a ruling in its favor and another from 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 to the charters, which are the core of NASCAR’s business model. A car with a charter has guaranteed income and access to weekly races, and without them both teams say they would almost certainly go bankrupt.“The evidence here establishes that not only were individual negotiations ‘available,’ but NASCAR had such negotiations regularly during the negotiation period,” Bell wrote in his order. “And those individual negotiations achieved concrete results, including the final 2025 Statute agreement that was signed by 13 teams acting individually (and contrary to the supposed ‘joint agreement’)”.
Judge Kenneth Bell
NASCAR said 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,” said Jeffrey Kessler, attorney for 23XI/FRM, in a statement. “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
“We respect the Court’s decision, although we respectfully disagree with its legal reasoning,” NASCAR said. “Our priority remains resolving this matter quickly so that all parties can focus on Championship weekend and continue to grow the sport. If a resolution is not reached, we intend to appeal the decision in due course.”
NASCAR
