CHARLOTTE, N.C. (CN) - Two teams suing NASCAR will not not get emergency relief allowing them to continue racing as chartered teams, a federal judge ruled Thursday evening.
Front Row Motorsports and 23XI Racing - a team partially owned by basketball legend Michael Jordan - had asked the court to issue a temporary restraining order to allow them to continue racing as chartered teams, NASCAR's franchise equivalent, while continuing their lawsuit against the company.
"The court finds that based on two critical representations by NASCAR, plaintiffs cannot show the likelihood of imminent irreparable harm sufficient to support a TRO," the Donald Trump appointee wrote, noting that the teams may still qualify in open races occurring in the coming weeks and it was unlikely sponsorships would suddenly pull out this late in the season.
The court had previously required NASCAR to allow the teams to race under the terms of a charter agreement that grants the teams guaranteed race entry and a cut of pooled profits, without giving up their legal case. But the Fourth Circuit Court of Appeal found in June the court overstepped in granting the teams prior emergency relief.
The teams can still race, but they must do it as open teams, which need to qualify for Cup Series races.
Front Row Motorsports and 23XI Racing had asked the court Monday to issue a temporary restraining order and a preliminary injunction. The teams face immediate and irreparable harm, they said in their filing, including the loss of their sponsors, drivers and revenue, should they not be able to each race three cars in all NASCAR Cup Series races under charter agreement terms.
They also floated the possibility that NASCAR may quickly sell their charters to other racing teams, potentially ending their ability to compete in the Cup Series.
"This is a fair and significant fear; however, NASCAR has agreed that it 'will not sell any Charters before the court can rule on plaintiffs' motion for preliminary injunction,'" Bell wrote.
His decision was based on that assurance, Bell said, and if NASCAR intends to transfer the charters through any method, it must first inform the court. He directed the parties to determine a date to hear their arguments over the teams' request for an injunction, signaling an upcoming court hearing in the tumultuous case.
"NASCAR's filings appear to assert that the Fourth Circuit and other authority has already held that they are effectively immune from antitrust scrutiny," Bell said. "The Court disagrees and therefore will permit the additional briefing."
The potential sale of charters involved in ongoing litigation between two other NASCAR teams has been an escalating factor in a separate legal case.
NASCAR said in its opposition the status quo is the teams not having charters, and the harm the teams claim will befall them is speculative. If the teams choose to race in the upcoming Dover and Indianapolis races, they will be able to race all six of their cars, it said, because fewer than the maximum number of cars are participating, so qualification isn't a factor.
Because a temporary restraining order is restricted to 14 days, NASCAR said, it isn't necessary "to address the parade of horribles plaintiffs hypothesize" because the teams will qualify for the races for the next two weeks, and likely throughout the remainder of the season.
Bell agreed, saying that the teams will be able to race in the two races within the next 14 days. The teams are also not at risk of imminently losing their drivers and sponsors, Bell said, as the season is nearing its end and the teams did not produce evidence that any of their drivers plan to leave within the next few weeks.
Jeffrey Kessler, counsel for 23XI Racing and Front Row Motorsports said in a statement that he was disappointed in the court's decision, but remains confident that the request for a preliminary injunction is "legally warranted and necessary."
"We made the decision to bring this lawsuit to challenge NASCAR's monopolistic practices and bullying tactics, and we are not going to let them push our teams - or others - out of the sport that they love," he said. "We are confident in the merits of our case and the teams remain focused on competing this weekend and continuing their playoff push."
Bell has yet to rule on another request to once again require NASCAR to allow the teams to race under more favorable terms.
23XI Racing and Front Row Motorsports have argued that the Fourth Circuit failed to consider the impacts of NASCAR's monopoly on the industry and appealed the panel's decision, which the Fourth Circuit declined to rehear as a full circuit.
The teams initially sued the racing giant last October, claiming they would be able to enter into much more profitable agreements if there was more competition in their field, and that NASCAR has a monopoly on the industry.
NASCAR has countersued, saying that the teams violated antitrust law in collectively negotiating more favorable terms with NASCAR, resulting in contracts that were more beneficial to them, and less profitable for NASCAR.
All parties have voiced that they have been unable to come to agreeable terms outside of court, despite Bell urging them to come to a settlement agreement.
A representative for NASCAR did not respond to a request for comment made outside of normal business hours.
Source: Courthouse News Service
