CHARLOTTE, N.C. (AP) — NASCAR went before a federal judge Wednesday and asked for the antitrust suit filed against the stock car series to be dismissed. Should it proceed, NASCAR asked that the two teams suing be ordered to post a bond to cover fees they would not be legally owed if they lose the case.
NASCAR also asked U.S. District Judge Kenneth Bell of the Western District of North Carolina to dismiss chairman Jim France as a defendant in the suit filed by 23XI Racing, a team co-owned by NBA Hall of Famer Michael Jordan, and Front Row Motorsports, which is owned by entrepreneur Bob Jenkins.
Bell promised a fast ruling but indicated he was unlikely to dismiss the suit when he closed the 90-minute hearing by saying “this case is going to be tried this year, and deserves to be tried this year.” The calendar he set when he received the case last month calls for a December trial.
Bell replaced Judge Frank Whitney after Whitney heard the first round of arguments in early November. The teams went before Whitney and asked to be recognized as chartered teams this year as the suit progresses. Whitney denied the motion.
The teams appealed and the case was transferred to Bell, who overruled Whitney and granted an injunction that will allow 23XI and Front Row to compete with charter recognition throughout the 2025 season. That led NASCAR to request the teams post a bond to cover all the payouts they will receive as chartered teams as collateral should the teams lose the case.
NASCAR and the teams that compete in the top Cup Series operate with a franchise system that was implemented in 2016 in which 36 cars have “charters” that guarantee them a spot in the field at every race and financial incentives. There are four “open” spots earmarked for the field each week.
The teams banded together in negotiations on an improved charter system in an often contentious battle with NASCAR for nearly two years. NASCAR in September finally had enough and presented the teams with a take-it-or-leave-it offer that had to be signed same day — just 48 hours before the start of the playoffs.
23XI and Front Row were the only two teams out of 15 who refused to sign the new charter agreement. They then teamed together to sue NASCAR and France, arguing as the only stock car entity in the United States, NASCAR has a monopoly and the teams are not getting their fair share of the pie.
Both organizations maintained they would still compete as open cars, but convinced Bell last month to give them chartered status by arguing they would suffer irreparable harm as open cars. Among the claims was that 23XI driver Tyler Reddick, last year’s regular season champion, would contractually become an immediate free agent if the team did not have him in a guaranteed chartered car.
Bell quickly showed he has a much firmer understanding of the case than Whitney did in the first hearing, and Bell peppered both sides with questions regarding payout structures, what harm NASCAR would suffer if the teams were open cars and other issues.
“Why give a charter to anyone?” he at one point asked NASCAR.
NASCAR attorney Christopher Yates of Latham & Watkins replied “NASCAR would be perfectly fine going back to that (pre-charter) model.”
Bell admitted he doesn’t normally hear motions to dismiss but did Wednesday because “we’ve got to get this case moving.” He later said he felt the hearing was beneficial as he was able to “size up” the attorneys and they could do the same with him.
He said he also “despises” discovery motions, but said he would personally handle them, but warned both sides to work together to avoid disputes and promised the losing side will pay the fees for the discovery portion of the case.
With all indications that Bell is not going to dismiss the suit, it appears the only suspense will be if he orders the teams to post bond before the season begins next month. NASCAR argued Wednesday that it needs that money earmarked because it would be redistributed to the chartered teams if 23XI and Front Row lose.
Jeffery Kessler, considered the top antitrust lawyer in the country, argued that NASCAR has made no such promise to redistribute the funds to other teams. Kessler said NASCAR told teams it was up to NASCAR’s discretion how it would use the money and didn’t rule out spending some on its own legal fees.
Jordan and Jenkins attended the first hearing but were not present Wednesday. Only 23XI co-owner Denny Hamlin was present, along with his fiancee and mother. Front Row general manager Jerry Freeze was in attendance, as well.
France and vice chairman Mike Helton were in the gallery with NASCAR’s in-house legal counsel and members of the communications team.
There were some comical moments in court — largely because of Bell’s engagement — and the judge at one point challenged Yates on what NASCAR had to lose in the case. When Yates said that NASCAR is focused on growing the sport and “wants to work with teams that don’t denigrate NASCAR,” Bell quickly responded “you mean teams that don’t sue NASCAR?”
Kessler at one point said NASCAR was arguing one of its weakest points in the motion to dismiss, so Bell asked Kessler what stronger points NASCAR should be making.
“I need to think about that,” Kessler said.
Yates alleged all the teams “acted as a cartel” when they banded together to form the Race Team Alliance to fight as one entity for better terms. NASCAR negotiated with the RTA representatives for some time, but stopped midway through last season and tried speaking to teams individually until it finally strong-armed a charter agreement through in September.
Yates also said that Jordan partnered with Hamlin, a three-time Daytona 500 winner, to launch 23XI as a new investment after selling the Charlotte Hornets even though Jordan “thought the terms were bad, and bought in anyway, eyes wide open. He could have invested in IndyCar or F1. He invested in NASCAR.”
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