23XI and FRM respond to NASCAR, assert ‘irreparable harm’ remains

In a response to a Friday legal filing from NASCAR stating the Sanctioning Body would hold six ownership charters through the results of their antitrust lawsuit for 23XI Racing and Front Row Motorsports, the teams responded on Tuesday in advance of a ruling later in the week that will determine the status of several disputed charters.

23XI and Front Row suggested that NASCAR’s recent actions do not do enough to prevent imminent harm to their business and instead offered an alternative course of action in mediation.

These positions were largely rejected according to the teams in their filing.

The position of the teams over the past calendar year and three different injunctions, is that they want to retain the status quo of how things were in the moments prior to the lawsuit, meaning that they hold de facto chartered status.

That includes the charter each team purchased from the shuttered Stewart-Haas Racing over the winter, which is in a sort of limbo ever since an appeals court overruled that decision, and with SHR no longer in a position to take the charters back.

New charters would be less valuable 

In the filing, the two teams say they would withdraw the motion for a third preliminary injunction request if NASCAR continued to hold six charters available for 23XI and Front Row in the case they win the case.

NASCAR somewhat agreed to do this, but by creating four new charters – 37, 38, 39 and 40. 23XI and Front Row are asking that the six to be held are the six that they had at the start of the season.

Keep in mind that charters have value based on results from the previous season, so new charters would be less valuable than the ones they held up until this summer.

This third injunction is the result of NASCAR indicating that it wanted to move forward with transferring charters over to prospective new entrants. It also indicated last month that it had an agreement with one such new team, should the court allow them to transfer one of those charters.

Ever since the injunction was overturned on appeal, NASCAR no longer recognizes 23XI and Front Row as having possession of those charters, and the two teams want that to change before they withdraw this latest injunction motion.

From the filing:

Michael Jordan, NBA Hall of Famer and co-owner of 23XI Racing

Photo by: Jared C. Tilton/Getty Images

NASCAR represents that it will not challenge the fact that Plaintiffs own the SHR Charters unless and until the Court orders the unwinding and sale of the SHR Charters. NASCAR will not seek to unwind and sell the SHR Charters before the Court rules on any post-trial motions seeking a permanent injunction or other equitable relief.

The teams ask NASCAR not to transfer any charter through the remainder of this season, which it has already agreed to do in the Friday filing.

They also asked that if NASCAR were to issue charters 37-40 to a prospective new buyer, that they adhere to the rules regarding procedures like first right of refusal from the current existing team owners and that all current existing team owners continue to be paid the same base amount.

Stated differently and for clarity, in the event NASCAR is ordered by the Court to issue, sell, convey, or lease additional Charters for the 2026 Cup Series season, the six 2025 Charters offered to or purchased by Plaintiffs will retain their place as six of the original 36 Charters.

NASCAR rejected those terms because, according their own words, it went far beyond maintaining the status quo.

“NASCAR opposes the relief Plaintiffs seek, but stands by the voluntary commitments that NASCAR made in its Notice Regarding Charters, Doc. 205. Plaintiffs’ Notice goes far beyond what Plaintiffs requested in their injunction papers, far beyond addressing any purported irreparable harm that Plaintiffs have identified, and far beyond preserving the status quo.”

“Their new requested relief violates the status quo by requiring any Charter NASCAR issues to be treated as if Plaintiffs hold Charters, even though the Charters “don’t belong to them,” as the Court has made clear.”

Next up, at some point this week, Judge Kenneth D Bell will render a new ruling on the injunction request. In other words, the Judge will once again have to determine whether or NASCAR will have to acknowledge the purchase of the Stewart-Haas Racing charters, if both teams and their six cars should be treated as if they are part of the charter system, and to what extent NASCAR can or cannot sell or otherwise transfer a charter to a new entrant before the trials is concluded.