23XI Racing and Front Row Motorsports have been granted the preliminary injunction to keep their charters for the 2025 season while the antitrust lawsuit against NASCAR and the France family continues. The ruling is just for next year and states that the disputed sections of the 2025 Charter Agreement that caused this lawsuit are not enforceable while the legal battle is ongoing. Cited in Wednesday's court ruling was the release clause of the new charter agreement, which prevents teams from bringing antitrust claims against the sport after signing.
The court order read as follows: "The Court hereby enters a limited preliminary injunction only for the duration of the 2025 NASCAR Cup season as follows: Defendants (NASCAR) and their agents, servants, employees, attorneys, and all persons in active concert or participation with Defendants, must allow Plaintiffs (23XI/FRM) to each enter two race cars in all NASCAR Cup races under the 2025 Charter Agreement terms applicable to all charter teams, with the exception that the "release" language in Section 10.3 of the 2025 Charter Agreement shall not be enforceable to the extent that it would release or bar Plaintiffs' claims in this action.
"Further, NASCAR is preliminarily enjoined from refusing to approve Plaintiffs' purchases of two Stewart-Haas Racing, LLC charters, which Plaintiffs will be entitled to use to race in all 2025 NASCAR Cup races on the same terms as other charter teams, again with the exception of the application of the release language to Plaintiffs' claims in this action; and 3. A Case Management schedule will be set by the Court which, in the absence of a voluntary resolution of this dispute among the Parties, provides for a trial on Plaintiffs' claims to be concluded in advance of the beginning of the 2026 NASCAR race season."
Attorney Jeffrey Kessler, who represents 23XI and FRM, reacted to the news with the following statement: “We welcome today's decision by Judge Bell granting a preliminary injunction in our favor. The court's ruling allows 23XI and Front Row Motorsports to race existing cars as chartered teams in next year's Cup Series. The decision also requires NASCAR to approve both teams' purchases of a third charter from Stewart-Haas Racing and allow these cars to also race as chartered teams in the 2025 season. We are confident in the strength of our case and will continue to fight so that racing can thrive and become a more competitive and fair sport in ways that benefit teams, drivers, sponsors and, most importantly, our fans.”
23XI co-owner and 3x Daytona 500 winner Denny Hamlin was more direct with his feelings after the ruling:
YESSSSSSS!!!!!!!
— Denny Hamlin (@dennyhamlin) December 18, 2024
In order to be granted a preliminary injunction, the plaintiff (in this case the race teams) must demonstrate the following: Are likely to succeed on merits, likely to suffer irreparable harm without the relief of the injunction, the balance of equities tips in its favor, and the injunction would be in the public interest.
The teams originally lost in their motion for a preliminary injunction on November 8th as the judge noted their failure to prove irreparable harm would come as a result of losing the charters. 23XI/FRM then moved to appeal but due to changing circumstances, they chose to drop the appeal and re-file the motion for a preliminary injunction from a new approach. Rather than asking the court to grant them the charters, they requested that they be allowed to compete under the 2025 Charter Agreement with the exception of the release clause.
Of note, this case moved from Judge Frank D. Whitney, who rejected the initial motion for an injunction in November, and is now in the hands of Judge Kenneth D. Bell.
Wednesday's ruling will allow 23XI and FRM to keep their charters until their ongoing antitrust lawsuit against the sport is resolved. It also means that they can complete their purchase of a third charter each from the now defunct Stewart-Haas Racing, which NASCAR now has to approve. 23XI has already announced a third car with Riley Herbst while FRM is expected to expand as well with Zane Smith rumored as the favorite for the team's third seat.
Another interesting part of the ruling is the court's finding that "NASCAR possesses monopoly/monopsony power in the relevant market, which is the market for premier stock car racing teams in the United States." It goes on to say that Formula 1 and IndyCar are not substitutes and that "NASCAR fully controls which race teams can compete at the highest level of stock car racing -- effectively, it has a 100% market share." This supports the team's primary argument of the antitrust lawsuit, which accuses NASCAR of being an unlawful monopoly.
The ruling also posed the following question in relation to the anticompetitive nature of the disputed release clause: "Can a monopolist require that a party agree to release a monopolist from all claims that it is violating the antitrust laws as a condition of doing business. The answer is no."
The court also found that in contrast to the first failed injunction request, the teams have proven that the likelihood of immediate harm has shifted from "remote and speculative to present and immediate." They cited the fact that 23XI's Tyler Reddick will have his contract voided if they compete as open teams and will be able to be leave for a rival organization. Several other drivers under the 23XI/FRM umbrella have expressed similar concerns over the uncertainty of their contracts. The lack of charters has also impacted the teams' relationship with key partners Monster Energy and Love's Travel Stops.
NASCAR will appeal the ruling and has asked for a delay in enforcing the injunction until after its appeal hearing.
