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 the 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 NASCAR after signing.
In order to be granted a preliminary injunction, the teams had to 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 8 November as the judge noted their failure to prove irreparable harm would come as a result of losing the charters.
23XI and 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 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 NASCAR is resolved.
It also means that they can complete their purchase of a third charter each from the now defunct Stewart-Haas Racing, subject to NASCAR approval. 23XI has already announced a third car with Riley Herbst while FRM is expected to expand as well with Zane Smith rumoured as the favourite for the team's third seat.
Another key 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" and adds that Formula 1 and IndyCar are not substitutes, while "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 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", citing 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 organisation.
Several other drivers under the 23XI and FRM umbrella have expressed similar concerns over the uncertainty of their contracts.
NASCAR can still choose to appeal the decision, which would likely be heard before the start of the 2025 season.
