NASCAR Files Motion to Dismiss Antitrust Lawsuit from 23XI, FRM
The National Association for Stock Car Auto Racing (NASCAR) and its CEO, Jim France, have both filed motions to dismiss the antitrust lawsuit that was brought against them earlier this Fall by 23XI Racing and Front Row Motorsports.
In the motion, which was filed on Monday, December 2, the sanctioning body outlines several reasons as to why they believe the lawsuit has no merit, pleading that the court immediate dismiss the case.
NASCAR states that most of the claims made by 23XI Racing and Front Row Motorsports are time-barred by the statute of limitations and laches because they happened more than four years ago. That includes the acquisition of ARCA, acquisition of ISC, the adoption of NextGen car requirements, NASCAR’s exclusivity arrangements with racetracks, and the 2016 Charter provisions.
“Plaintiffs lack antitrust standing to sustain their challenges to the 2025 Charter’s release of claims and noncompete provisions, which are their only claims that arguably fall within the statute of limitations, because Plaintiffs did not sign the Charters and their failure to secure preferred contractual terms is not antitrust injury.”
The sanctioning body cites a specific portion of the law in which the teams propose a market definition that is post-investment rather than pre-investment. Under settled law, a plaintiff is not able to establish a relevant market by claiming to be locked in a market, knowing that doing so would entail sunk costs and other risks.
Finally, NASCAR states that 23XI Racing and Front Row Motorsports failed to demonstrate exclusionary conduct because the sanctioning body didn’t refuse to deal with the Plaintiffs, and that they haven’t pleaded facts that demonstrate either of the challenged Charter provisions reduces competition.
NASCAR’s memorandum of law in support of the motion to dismiss states; “For instance, Plaintiffs concede the Charters are ‘worth millions of dollars’ and NASCAR increased the revenues available to teams after the last round of negotiations. This behaviour is the exact opposite of what one would expect from a monopsonist; if NASCAR truly had market power, it would be decreasing its demand for Plaintiffs’ services and lowering the amount by which it compensates them.”
In a separate filing, which outlines a motion to dismiss coming from Jim France, NASCAR’s CEO who is also mentioned in the lawsuit, the Plaintiffs (23XI Racing and Front Row Motorsports) are said to be improperly dragging France into a legal battle.
“Plaintiffs improperly seek to drag NASCAR’s CEO, Mr. James (“Jim”) France, into a legal battle motivated by Plaintiffs’ inability to secure all their preferred contractual terms from NASCAR during the negotiations over the 2025 Charter,” the filing reads.
“Plaintiffs’ antitrust claims against Mr. France are just as baseless as their claims against NASCAR and should be dismissed for the same reason that the claims against NASCAR should be dismissed. They also fail because Plaintiffs have not provided any factual allegations showing Mr. France “actively and knowingly engaged” in the alleged anticompetitive scheme. The absence of such allegations is fatal and the claims against him should accordingly be dismissed.”
At this stage, 23XI Racing and Front Row Motorsports have filed a second preliminary injunction request, in hopes of having the court rule to allow them to race under the 2025 Charter Agreement for the time in which this lawsuit continues. NASCAR, obviously, is opposed.
23XI and FRM will have until December 16 to respond to NASCAR's motion to dismiss.
