NASCAR lawsuit: District court makes decision on countersuit against 23XI Racing, Front Row Motorsports

Another decision in the NASCAR lawsuit saga. The motion to dismiss NASCAR’s counterclaim against 23XI Racing and Front Row Motorsports has been denied. While this isn’t a decision on the merits of that counterclaim, it will allow it to go forward.

The NASCAR lawsuit continues with its many twists and turns. In the Western District of North Carolina, Judge Kenneth Bell has made a decision on the motion to dismiss NASCAR’s countersuit against the teams. That motion was denied.

The countersuit from NASCAR states that it was the teams who illegally colluded against the sanctioning body while negotiating the charter agreements. Of course, 23XI and FRM did not sign the charter agreements while the other Cup Series organizations did sign.

NASCAR filed the countersuit earlier this year. In response, the teams filed a Motion to Strike the counterclaim. While determining whether to dismiss a claim, the court accepts the claims as fact rather than making a ruling on the actual legal standing of the claims. Instead, the court has determined that the counterclaim will go forward and be assessed on its merits in Summary Judgement.

“Of course, Plaintiffs (23XI and Front Row) have several responses to these allegations that will be considered at Summary Judgment … but the Court’s task at this stage of the proceedings is simply to determine if there is a ‘plausible’ claim. And, NASCAR has satisfied that (relatively) low bar. Therefore, the Court will allow NASCAR’s Counterclaim to proceed towards a merits decision on its Rule of Reason Sherman 1 claim.”

This is not a win or a loss for either side. But if you wanted to apply those terms, this is a small win for NASCAR in the overall lawsuit. That’s simply because the countersuit wasn’t thrown out.

Jeffrey Kessler responds to district court ruling

The teams released a statement today through their attorney. Jeffrey Kessler is expressing confidence despite the district court ruling on the counterclaim.

“Judge Bell’s decision today is encouraging even though we are disappointed that he did not dismiss NASCAR’s meritless, retaliatory counterclaim,” Kessler said. “The judge’s recognition of many of our arguments, including the efficiency and necessity of joint negotiations and lack of credible evidence, reinforces our confidence that we will prevail in summary judgment. This counterclaim is a tactic by NASCAR to divide and distract. We remain confident in our case and motivated by our original intent – to ensure a competitive and fair sport for all drivers, fans, teams, and partners.”

It feels like momentum has swung in the lawsuit. NASCAR has had a couple of small wins recently.

NASCAR lawsuit likely heading for trial in December

Unless the two parties find a way to reach a settlement, this NASCAR lawsuit is going to go to trial on December 1. There is a lot that can happen between now and then. 23XI Racing and Front Row Motorsports are currently attempting to appeal a decision made by the U.S. Court of Appeals.

If the appeal is denied or the appeal fails upon being heard by the court, then 23XI and FRM will lose charter status for 2025. That is a matter of millions of dollars in revenue that they will lose per car. Not to mention, they could lose the charters that they purchased from Stewart-Haas Racing last year. A lot is on the table on this appeal.

The NASCAR lawsuit could change the sport as we know it, no matter which side wins at trial or in a settlement situation. I have a feeling neither side is going to budge and give in before December.