Disparaging the lawsuit brought by Michael Jordan-owned 23XI Racing and Front Row Motorsports as a “misguided attempt to dress up private business frustrations in antitrust garb,” NASCAR this week motioned a federal judge to dismiss the case altogether. NASCAR CEO Jim France, a co-defendant, separately filed a motion to dismiss, arguing that his inclusion is a “baseless” and “improper” attempt to add antitrust claims that require multiple defendants.
Although only two months old, the litigation pitting billionaire Jordan against the multi-billion-dollar enterprise that is NASCAR has generated numerous court filings, ranging from an aborted appeal by Jordan’s group to the U.S. Court of Appeals for the Fourth Circuit to fiery barbs over the impact of the Thanksgiving holiday on filing deadlines. Both sides have retained prominent counsel and appear willing to spend any amount necessary to prevail.
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The core of the case is fairly simple. 23XI Racing and Front Row Motorsports mainly object to NASCAR’s use of a particular style of charter system. By signing a charter, a team is guaranteed a starting position in NASCAR-sanctioned races. In exchange, the team agrees to refrain from competing in other circuits and relinquishes any potential legal claims it might have against NASCAR. The two plaintiffs argue that charters are anticompetitive and reflect NASCAR’s excessive control over the market for premier stock racing.
NASCAR’s motion to dismiss, which U.S. District Judge Frank D. Whitney will review, lays out the counterarguments.
First, NASCAR contends that the plaintiffs “confess” the charters are in fact equitable, even preferential, to these two teams. As NASCAR tells it, the charters’ broadcast revenue split is “undeniably fair and advantageous” to the 23XI Racing and Front Row Motorsports.
Second, NASCAR urges Whitney to find that, although the plaintiffs depict their case as about far-reaching principles grounded in justice and equity, when “stripped of its bluster” the complaint “reflects nothing more than dissatisfaction with business negotiations that didn’t go their way.”
To that end, NASCAR asserts 23XI Racing and Front Row Motorsports seek for the court to effectively “renegotiate” only “two terms” from NASCAR’s charter offer: a release of claims and a provision referring to covenants not to compete. And NASCAR says those terms don’t impact the plaintiffs because they didn’t sign charters.
