Why Did 23XI-FRM Alliance Lose the Charter Lawsuit Appeal to NASCAR?

23XI Racing and Front Row Motorsports faced a major blow in their battle against NASCAR after the latest verdict by the US Court of Appeals.

Why Did 23XI-FRM Alliance Lose the Charter Lawsuit Appeal to NASCAR?

Denny Hamlin and Michael Jordan (via Getty images)

NASCAR was in a state of upheaval last year when 23XI Racing and Front Row Motorsports filed a lawsuit over the sport’s new charter system. The two teams have suffered a massive blow following the latest verdict on the injunction by the US Court of Appeals, leading to an uncertain future in the series.

The US Court of Appeals for the Fourth Circuit overturned the injunction that was agreed in December 2024. As per the agreement, 23XI Racing and FRM were allowed to compete in NASCAR with the same benefits of charter teams. While the two outfits pursued a legal battle against the sport. Last year, 23XI and FRM had refused to sign the new charter agreement over allegations of monopolistic behavior by the sport.

The judges questioned the teams’ attorney Jeffrey Kessler over the situation. Kessler was asked how 23XI and FRM could enjoy the benefits of charter teams while fighting NASCAR in court. Moreover, the lack of precedence of such a case played a role in the ruling as the court could not find an instance that matched the theory of antitrust law similar to this case.

 [The] theory of antitrust law is not supported by any case of which we are aware, we conclude that it was not a likely basis for success on the merits and vacate the injunction.

The Court’s ruling stated.

Front Row Motorsports and Michael Jordan‘s 23XI Racing also had the provision to purchase one charter each from Stewart-Haas Racing courtesy of this injunction. Now, the two teams have a deadline of 14 days to make another appeal, or else the verdict will be put in place. This would force 23XI and FRM to compete in the Cup Series as open entries and lose out on substantial monetary benefits from NASCAR.

23XI and FRM attorney Jeffrey Kessler responds to court verdict

Kessler, who has represented both teams in the legal battle gave a statement on the court’s decision. The attorney made it clear that his clients will be evaluating the next steps to be taken following this judgement. Despite the situation, both 23XI and FRM remain firm in their stance over ensuring a fairer economic system for NASCAR teams.

This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning the trial scheduled for December 1. We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system…

 Jeffrey Kessler said, via Bob Pockrass
Bubba Wallace
Bubba Wallace (Via IMAGO)

This injunction will not affect the timeline of the lawsuit. The trial for the lawsuit against NASCAR is set to commence in December this year. While 23XI Racing and Front Row Motorsports plan their next course of action, NASCAR has already stated that it has tweaked its payout structure for 32 entries this season, hinting at removing the four charters of these two teams.

It seems that the NASCAR field is going to be riddled in controversy for the coming weeks. More discussions will happen around the situation of 23XI Racing and Front Row Motorsports following this decision. The two teams will fight tooth and nail to save their charter benefits as it plays an important role in financial stability. Fans will certainly be keeping a close eye on this case and the future of NASCAR’s charter system.

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