23XI Racing, Front Row say NASCAR’s defense is ‘tired, familiar and strident’

23XI Racing, owned by Michael Jordan and Denny Hamlin, and Front Row Motorsports filed a brief Monday morning asking U.S. District Judge Kenneth D. Bell to deny NASCAR’s request for a stay of a preliminary injunction. Unless Bell stays or overturns on appeal to the U.S. Court of Appeals for the Fourth Circuit, the injunction prevents NASCAR from denying the two teams the same terms offered to charter teams and ensures they are not forced to pursue legal claims against NASCAR.

In partially granting NASCAR’s request for expedited review of the requested stay last Friday, Bell directed the plaintiffs, led by attorney Jeffrey Kessler, to file a brief no later than 10 a.m. Monday. Bell indicated he would make a decision on NASCAR’s request for a suspension sometime Monday.

The plaintiffs’ brief, signed by Kessler, escalates an already bitter legal battle accusing NASCAR of abusing monopsony power over racing teams while 23XI Racing and Front Row abused the legal process to renegotiate a failed business deal.

The brief details how NASCAR and co-defendant CEO Jim France resorted to litigation to cover up legal defects.

“If a litigant has neither the law nor the facts on his side, he will pound the table,” the short indictment says, adding: “The defendant’s approach has become tired, familiar and strident.” In the brief alleges that NASCAR is “simply – but more loudly – ​​denouncing the same points that this court has already heard and properly rejected.”

To that end, the brief criticizes NASCAR’s argument that it was not given a fair opportunity to respond to charter transfer issues related to 23XI Racing and Front Row’s plan to acquire two Stewart-Haas Racing (SHR) charters. The charters would allow the two teams to compete against each other. As the brief shows, NASCAR has previously and unsuccessfully made the same argument, except now it uses a “raised tone” as if that were a distinguishing feature.

The brief also argues that when the plaintiffs’ lawsuit was filed several months ago, neither 23XI Racing nor Front Row “had any reason to believe” that NASCAR would block the broadcasts unless they contractually opted out their right to sue. The brief alleges that NASCAR President Steve Phelps “informed Front Row several weeks before the lawsuit commenced that the SHR transfer had been approved,” and all that separated the formal approval, the brief states. “The ministerial task was to submit some documents”. ” But in December, NASCAR told Front Row it would not approve the transfer. The brief states: “The only intervening event was the filing of this lawsuit by Front Row.”

The brief acknowledges that NASCAR has raised “several questions” about “23XI’s compliance with the charter’s team owner and control person requirements,” but emphasizes that those questions are bogus. There can be no “legitimate questions” about whether 23XI owners could be classified as “prohibited persons,” the brief said, because Jordan and Hamlin have had NASCAR-approved charter contracts “for years.”

The brief also cited Phelps’ praise for Jordan and Hamlin as contradicting the idea that they might not be the right people to lead a team. Phelps is quoted as saying, “I love that Michael Jordan is in our sport. Personally, I like Michael and think he’s good for the sport.” Phelps’ praise for Hamlin is also highlighted. “Denny Hamlins…does an excellent job…I would like to have 36 Denny Hamlins.” The brief states that “the only reason” NASCAR could consider Jordan and Hamlin to be “prohibited persons” is “because they have asserted their antitrust rights and filed this lawsuit.” Of course, NASCAR could argue that Phelps’ opinion of Jordan and Hamlin changed because of arguments and statements related to the lawsuit that NASCAR believes are untrue.

If Bell agrees to the stay, the injunction would be suspended until the Fourth Circuit hears NASCAR’s appeal. This can take weeks or months.

If Bell rejects the suspension, 23XI Racing and Front Row will have “won” in the short term as they could compete with charter rights without giving up their legal rights. They could also continue their deal with SHR.

But in that scenario, the Fourth Circuit could still reverse Bell and lift the injunction. Even if the Fourth Circuit upholds Bell, NASCAR could ultimately win the case, which will go to trial next December. Bell ruled only on a preliminary injunction, not on the merits of the plaintiffs’ broader claim that NASCAR violated antitrust law. The parties could also reach an agreement at any time.