A United States appeals court on Thursday vacated a preliminary injunction that allowed Michael Jordan’s 23XI Racing and another NASCAR team to be treated as chartered teams, putting the teams’ futures in NASCAR in question.
23XI Racing — whose owners include Jordan and NASCAR driver Denny Hamlin — and Front Row Motorsports refused to sign a take-it-or-leave-it charter agreement NASCAR presented in September, while the other 13 organizations in the Cup Series proceeded to sign.
The two holdouts filed an antitrust lawsuit against NASCAR the following month. In December, U.S. District Judge Kenneth D. Bell granted the teams’ request for a preliminary injunction to be recognized as chartered teams while their lawsuit was active.
NASCAR slammed that decision and brought an appeal to the Fourth Circuit Court of Appeals in Richmond, Va. On Thursday, a three-judge panel unanimously ruled in NASCAR’s favor and vacated the preliminary injunction.
“In short, because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory,” the decision read in part. “And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction. … We therefore conclude that the district court abused its discretion in entering the preliminary injunction that it did.”
23XI Racing and Front Row are still allowed to compete in the Cup Series, but having charter status guarantees them automatic spots in races and they would earn more money with a charter than as “open” teams. An open team must qualify their way into each race.
They can also file for a petition for rehearing.
–Field Level Media
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