A federal judge issues a verdict on NASCAR’s motion to dismiss the lawsuit amid continuing legal confusion

NASCAR has been denied an attempt to dismiss an antitrust lawsuit it is currently involved in with the 23XI Racing and Front Row Motorsports teams.

The two racing teams that initiated the lawsuit accuse NASCAR of monopolistic practices, particularly in its charter contracts. This new ruling by a federal judge, U.S. District Judge Kenneth D., will allow the arguments of those involved in the case to be fully developed.

Judge Bell explained that the two sides of the lawsuit presented their issues very differently.

23XI Racing and Front Row Motorsports describe NASCAR, led by the French family, as enforcing unfair and monopolistic control of the sport under restrictive conditions.

On the other hand, NASCAR and the France family see themselves as founding figures of a beloved racing series that entered into charter agreements in a fair and mutually beneficial manner.

The lawsuit targets NASCAR’s charter system. Introduced in 2016, the system provides guaranteed spots for 36 cars in each NASCAR event, provided teams meet certain performance criteria.

Unlike the single-race entry system that preceded it, charters can be bought, sold and leased under binding contracts that can be revoked by NASCAR.

The current conflict began during negotiations for a new charter agreement that runs through 2031. 23XI Racing and Front Row Motorsports were the only teams to choose not to sign the new agreement, arguing that the terms were anti-competitive and favored NASCAR tracks and suppliers.

A key part of the lawsuit alleges that NASCAR threatened to disband the entire charter system if teams did not sign an agreement by the deadline. This is at the heart of their antitrust allegations against NASCAR.

The refusal to dismiss the lawsuit means the case will now focus on discovery of evidence and a potential trial unless a settlement is reached first.

In his detailed ruling, Judge Bell also addressed NASCAR’s unsuccessful efforts to impose a significant financial deterrent on the plaintiffs. He rejected NASCAR’s demand that 23XI Racing and Front Row Motorsports post a deposit of more than $10 million on the car as a condition to continue racing under charter terms.

According to Judge Bell, at this stage the harm that NASCAR believed it would suffer from allowing these teams to race under charter conditions was neither certain nor quantified. He explained: :

“The parties to this lawsuit present their existential dispute in completely different categories. According to the plaintiffs, NASCAR (led by a dynastic French family) is a monopoly ruler with an iron fist over top stock car racing that has imposed an anti-competitive take-it-or-leave-it policy. “conditions” regarding plaintiffs and other top racing teams.

“According to defendants, NASCAR and the France family are the founders and leaders of a beloved and valuable racing series who have honestly negotiated mutually beneficial ‘Charter Agreements’ that reflect reasonable commercial terms between NASCAR and the racing teams.

“What is the actual evidence and how does it inform a valid legal conclusion? These issues cannot be resolved on motions to dismiss this action where Plaintiffs have sufficiently asserted one or more probable antitrust claims against Defendants within the applicable statute of limitations.

Instead, the answer must be sought when the parties have had a full opportunity to discover the relevant facts, and then at trial, at which the jury will have the opportunity to consider the evidence and assess the credibility of the witnesses (unless the matter is decided in advance by the parties or the Court). Accordingly, the Court DENIES Defendants’ motions to dismiss.”

Commenting on the bond, Bell explained:

“The alleged harm to NASCAR by allowing plaintiffs to race their chartered cars under the same conditions as the other 30 chartered teams is currently uncertain and unquantified.

“Therefore, the Court, in its discretion, will waive the bond requirement of Rule 65(c) and will not require Plaintiffs to post bond in order to issue Preliminary Orders.

“However, by its ruling, the Court does not preclude NASCAR from later seeking reimbursement for the harm it claims to have suffered as a result of the improperly granted injunction.”

Both teams, 23XI Racing and Front Row Motorsports, have attracted a lot of interest, and 23XI Racing is co-owned by a basketball legend Michael Jordan and NASCAR driver Denny Hamlin.

The lawsuit says NASCAR’s moves could unlawfully monopolize the industry, benefiting the France family financially at the expense of fair competition.

Both teams emphasize that the new charter agreement stifles healthy competition and exposes them to vulnerability.

The dispute is scheduled to go to trial in December 2025, although negotiation attempts or further court rulings could change that timeline.

Meanwhile, NASCAR revealed it intends to appeal a preliminary injunction that allowed both race teams to participate in events as charter members under disputed terms for the 2025 season.