Federal judge calls on NASCAR, teams to settle bitter antitrust battle

CHARLOTTE, N.C. — A federal judge urged NASCAR and two of its teams, including one owned by retired NBA great Michael Jordan, to settle their increasingly acrimonious legal fight that spilled over into tense arguments during a hearing on Tuesday.

U.S. District Judge Kenneth Bell of the Western District of North Carolina grilled both NASCAR and the teams — 23XI Racing, which is owned by Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by entrepreneur Bob Jenkins — on what they hoped to accomplish in the antitrust battle that has loomed over the stock car series for months.

''It's hard to picture a winner if this goes to the mat — or to the flag — in this case,'' Bell said. ''It scares me to death to think about what all this is costing.''

23XI and Front Row were the only two organizations that refused to sign a take-it-or-leave-it offer from NASCAR last September on a new charter agreement. Charters are NASCAR's version of a franchise model, with each charter guaranteeing entry to the lucrative Cup Series races and a stable revenue stream; 13 other teams signed the agreements last fall, with some contending they had little choice.

The nearly two-hour hearing was on the teams' request to toss out NASCAR's countersuit, which accuses Jordan business manager Curtis Polk of ''willfully'' violating antitrust laws by orchestrating anticompetitive collective conduct in negotiations. NASCAR said it learned in discovery that Polk in messages among the 15 teams tried to form a ''cartel'' type operation that would include threats of boycotting races and a refusal to individually negotiate.

One of NASCAR's attorneys even cited a Benjamin Franklin quote Polk allegedly sent to the 15 organizations that read: ''We must all hang together, or most assuredly we shall all hang separately."

Jeffrey Kessler, an attorney representing the teams, was angered by the revelation in open court, contending it is privileged information only revealed in discovery. Kessler also argued none of NASCAR's claims in the countersuit prove anything illegal was done by Polk or the Race Team Alliance during the charter negotiation process.

''NASCAR knows it has no defense to the monopolization case so they have come up with this claim about joint negotiations, which they agreed to, never objected to, and now suddenly it's an antitrust violation,'' Kessler said outside court. ''It makes absolutely no sense. It's not going to help them deflect from the monopolizing they have done in this market and the harm they have inflicted.''

He added that ''the attacks'' on Polk were "false, unfounded and frankly beneath the dignity of my adversary to even make those type of comments, which he should know better about.''

NASCAR attorneys said Polk improperly tried to pressure all 15 teams that comprise the RTA to stand together collectively in negotiations and encouraged boycotting qualifying races for the 2024 Daytona 500. NASCAR, they said, took the threat seriously because the teams had previously boycotted a scheduled meeting with series executives.

''NASCAR knew the next step was they could boycott a race, which was a threat they had to take seriously,'' attorney Lawrence Buterman said on behalf of NASCAR.

Kessler said outside court the two teams are open to settlement talks, but noted NASCAR has said it will not renegotiate the charters. NASCAR's attorneys declined to comment after the hearing.

Bell did not indicate when he'd rule, other than saying he would decide quickly.

Preliminary injunction status

Kessler said he would file an appeal by the end of the week after a three-judge federal appellate panel dismissed a preliminary injunction that required NASCAR to recognize 23XI and Front Row as chartered teams while the court fight is being resolved.

Kessler wants the issue heard by the full appellate court. The injunction has no bearing on the merits of the case, which is scheduled to go to trial in December. The earliest NASCAR can treat the teams as unchartered is one week after the deadline to appeal, provided there is no pending appeal or whenever the appeals process has been exhausted.

There are 36 chartered cars for the 40-car field each week. If 23XI and Front Row are not recognized as chartered, their six cars would have to compete as ''open'' teams — which means they'd have to qualify on speed each week to make the race and they would receive a fraction of the money guaranteed for chartered teams.

Discovery issues

Some of the arguments Tuesday centered on Jonathan Marshall, the executive director of the RTA. NASCAR has demanded text messages and emails from Marshall and says it has received roughly 100 texts and over 55,000 pages of emails.

NASCAR wants all texts between Marshall and 55 people from 2020 through 2024 that contain specific search terms. Attorneys for the RTA said that covers more than 3,000 texts, some of which are privileged, and some that have been ''deleted to save storage or he didn't need them anymore.''

That issue is set to be heard during a hearing next Tuesday before Bell.

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