23XI, Front Row to seek rehearing before appeal court to keep charter status

CHARLOTTE, N.C. — The attorney for 23XI Racing and Front Row Motorsports said Tuesday that he will seek a rehearing before the full Fourth Circuit Court of Appeals for both organizations to keep their chartered status.

Jeffrey Kessler, lead attorney for 23XI Racing and Front Row Motorsports in its antitrust lawsuit against NASCAR, made the comments after a hearing on another matter Tuesday in federal court.

The teams and Curtis Polk, co-owner of 23XI Racing, sought a dismissal of counterclaims NASCAR made against them. The judge made no decision on the counterclaims Tuesday after a nearly two-hour hearing.

The teams have a key deadline this week in another judicial matter.

A three-judge appellant panel ruled in NASCAR’s favor June 5 to rescind the preliminary injunction that has allowed 23XI Racing and Front Row Motorsports to compete as chartered teams this season.

A three-judge panel ruled Thursday to vacate the preliminary injunction granted 23XI Racing and Front Row Motorsports to run as chartered teams.

A district court judge granted the injunction in December, permitting the teams to receive all the benefits of a chartered team — including financial payments and guaranteed starting spots — despite not signing the charter agreement last year.

The teams have until Thursday to request a rehearing. Kessler confirmed Tuesday that the teams would meet that deadline.

“Unfortunately, I don’t think the three judges, if you read their opinion, actually dealt with the hard issues and that’s what the circuit will need to do,” Kessler said in response to a question from NBC Sports.

“For example, under their decision, Google could go to all of their customers and say if you want to be on my app store, you have to waive your antitrust rights so we never get a Google case. Apple could do the same.

“These types of forced releases by someone who is adjudicated to be a monopoly in some respect … we think they’re anti-competitive. We think if the whole Fourth Circuit looks at that — it’s hard to get a rehearing, may not get a rehearing — but we think it should have a rehearing.”

All six cars for both teams (the cars for Tyler Reddick, Bubba Wallace and Riley Herbst for 23XI Racing and the cars for Todd Gilliland, Zane Smith and Noah Gragson for Front Row Motorsports) would continue to be classified as having a charter as long as the appeal process continues.

NASCAR Commissioner Steve Phelps told drivers before the race: “Together, we are doing something that will be remembered in the history of our great sport.”

Tuesday before federal judge Kenneth D. Bell, both sides argued about about the merits of counterclaims NASCAR had filed. In its original filing on March 5, NASCAR claimed that 23XI Racing, Front Row Motorsports and Polk “embarked on a strategy to threaten, coerce, and extort NASCAR into meeting their demands for better contract and financial terms.”

The judge posed several questions in Tuesday’ session.

At the start of the hearing, the judge asked both sides what they sought from the matter. Kessler said that if the teams win their case — the trial is scheduled to begin Dec. 1 — they could seek to force NASCAR to divest its ownership of tracks, a point he reiterated to reporters after Tuesday’s court session.

“We really won’t decide on the injunctive relief until after the jury verdict because you have to tailor your relief to what the jury finds and what issues come out,” Kessler told reporters. “ … But as I noted to the judge, there are lots of relief that is well known in the antitrust laws, one of which is divesture, which would be to separate the running of NASCAR and the commercial terms and the tracks.

“Another one is getting rid of all these restrictions that stop the tracks from having competing events, stop the other teams from racing in other events, stop the teams from using their Next Gen cars in other events.

“Those are the things where monopolists cannot continue to impose those restrictions and there may be other types of relief in terms making this a competitive market going forward in addition to the treble damages and other relief that we’re seeking.”

NASCAR’s first international Cup points race since 1958 was memorable for some and not so much for others.

Chris Yates, lead attorney for NASCAR, said in court that NASCAR was not seeking to add other teams to the lawsuit. “We’re more than happy to omit it to the named defendants.”

Yates did not speak to reporters after Tuesday’s hearing.

At the end of the hearing, Bell gave a warning to both sides as he looked ahead at the antitrust lawsuit.

“Hard to picture a real winner if this goes to the mat, or the flag, in this case,” he said.

Kessler was asked about the judge’s comments after the hearing.

“We’ve always indicated that if there could be a fair settlement breach, that we could come to something that’s good for everybody, I’m a lawyer, I always am open to settlement,” Kessler said. “I think my clients are always open to settlement.

“The problem here has been NASCAR. If you listened to Mr. Yates at the Fourth Circuit, the Fourth Circuit asked him about this, ‘Oh yes, we’re going to have mediation but don’t expect us to agree to anything.’

“They’re not going to agree to anything, we’ll see them at trial. We are very much open to what all the judges are saying is this is a case that should be settled and worked out so that everyone could go forward racing, the fans don’t have to read and hear about all of this and could have a better system for everyone.”