ANALYSIS: Why 23XI and FRM Lost Their Preliminary Injunction Hearing
After four days of deliberating, Judge Frank D. Whitney ruled on the preliminary injunction request put forward by 23XI Racing and Front Row Motorsports. The request was denied.
"At this time, Plaintiffs have not met their burden as required for a preliminary injunction. Should circumstances change, Plaintiffs may file a renewed motion for preliminary injunction. Therefore, the Court denies Plaintiffs’ motion without prejudice," the decision from the judge reads.
The injunction was filed by 23XI Racing and Front Row Motorsports on October 9, and requests that the court intervene in two ways; by providing both teams (23XI/FRM) two charters under the terms of the 2025 Charter Agreement, and by prohibiting NASCAR from enacting a clause which waives the antitrust rights of the teams that sign.
On Monday, November 4, both sides had the opportunity to plead their case to the judge.
According to court documents, which were reviewed and studied by Racing America OnSI, for a preliminary injunction to be granted, the following four things must be true: "(1) a likelihood of success on the merits; (2) a strong prospect of irreparable harm if the injunction is not granted; (3) the balance of equities favors the movant; and (4) an injunction is in the public's interest."
In pleading their case to the judge, 23XI Racing and Front Row Motorsports made several arguments to demonstrate the irreparable harm that would be cast onto them, should a preliminary injunction not be granted by the court.
23XI Racing, co-owned by Denny Hamlin, NBA superstar Michael Jordan, and Curtis Polk, alleges that not being allowed to compete as Chartered Entries leaves the team at risk of losing not only sponsorship agreements but also drivers -- pointing to a clause in Tyler Reddick's contract which allows him to leave if there is no Charter Agreement for his entry.
The teams also allege that not having the financial benefit and the revenue stream that comes from being a Chartered Entry in the NASCAR Cup Series could threaten their existence, and force them both to shutter operations.
As outlined by the Judge: "Here, although Plaintiffs have alleged that they will face a risk of irreparable harm, they have not sufficently alleged present, immediate, urgent irreparable harm, but rather only speculative, possible harm. That is, although Plaintiffs allege they are on the brink of irreparable harm, the 2025 racing season is months away -- the stock cars remain in the garage."
In his ruling, the Judge states that the Plaintiffs (teams) have made arguments that are "too speculative to give rise to a preliminary injunction", only stating the possibility of losing their drivers and sponsorship agreements, instead of a present threat that they will lose drivers and/or sponsors.
Furthermore, 23XI Racing and Front Row Motorsports have not alleged that their businesses are unable to survive without the preliminary injunction, but again, speculated that their organizations may not be able to survive without it.
When it comes to the request of a preliminary injunction, speculation of the potential adverse impacts it may have on the affected party isn't enough, and there must be some concrete element that the team would be harmed in an irreparable way.
The filing reads: "At this stage, the teams are no closer to irreparable harm than they are to the command, "Drivers, start your engines," at the first race of the 2025 season."
In a statement released Friday, 23XI Racing and Front Row Motorsports, plus their lead attorney Jeffrey Kessler, say that they plan to appeal the decision by Judge Frank D. Whitney. When this appeal happens, they'll have to show that the harm is irreparable and an imminent threat, and not just a possibility.
Statement from 23XI and Front Row Motorsports ownership. pic.twitter.com/1sIr931P4V
— 23XI Racing (@23XIRacing) November 8, 2024
