The judge warns 23xi and FRM “You cannot have your cake and eat it too”

23xi Racing and Front Row Motorsports faced Nascar on Friday in the last war of words while this tense legal battle continues. It was judge Paul Victor Niemeyer, judge Steven Agee and judge Stephanie Thacker by listening to oral arguments in the United States Court of Appeal located in Richmond, Virginia.

This call focuses on NASCAR tending to overthrow the preliminary injunction, which was granted to 23XI and FRM in December 2024, allowing them to run as approved teams without being held in the press release (capacity to prosecute NASCAR) in the charter agreement 2025. They called the agreement to include these conditions, affirming that they are considered as antitrust violations when they are grouped with other factors.

He was Nascar’s principal lawyer, Christopher Yates, and the main lawyer for the teams, Jeffrey Kessler, arguing their business in turn.

Nascar takes the ground

Yates was first, explaining how nothing prevents the teams from participating even if the injunction was reversed, which would undress 23x and FRM of their charters of the court at mid-season.

“They were offered a contract, they rejected the contract,” said Yates. He continued, saying that there is “no contractual relationship between the parties. However, the injunction of the district court orders a contract, which therefore upset the status quo”.

He also retaliated with the assertion that Nascar operates as an illegal monopoly, citing the way in which charter negotiations went well for more than two years. “Monopolists do not negotiate for two and a half years,” he said. He stressed that the teams have never raised a problem concerning the release (the ability to continue) before rejecting the offer. And it is this press release that the district court quoted as a reason to grant the injunction, considering that it is a conduct of exclusion. He went so far as to say that the district court had misunderstood the situation and did not follow the previous one when granting.

The judges – mainly the Judge Niemeyer – asked several questions clarifying Nascar during this period. The strongest point of Yates was as follows: you cannot ask to be linked to something that you are simultaneously violating antitrust laws. “He also said that the only motivation here was that the teams wanted to withdraw more money from the sanction organization.

Commissioner Nascar Steve Phelps

Photo of: Chris Graythen – Getty Images

The team lawyer collapses with the judges

Kessler failed to introduce himself to his opening comments before judge Niemeyer intervened, saying that he had not understood the point that he was trying to assert. “If you don’t want the contract, you don’t conclude yourself and you continue Costco c. Omega) Observation is that you cannot have your cake and eat it too. “”

Kessler immediately pushed back and things became a little controversial, but remained professional. While trying to take stock of irreparable damage, judge Niemeyer again interrupted. “Stay away from evil. Take away from all of this. Go to the antitrust theory. This is my biggest problem. This is the probability of success.”

The judge also stressed that the liberation with which 23XI / FRM disputes is mutual so that the teams cannot continue NASCAR, but NASCAR cannot continue the teams either. “Is the inclusion of mutual versions in an anti-competitive contract in the direction (that a monopoly cannot include it in its contracts?”

Kessler replied: “If the release has been used to help maintain the monopoly position -“

Judge Niemeyer instantly rejected. “So you don’t enter it. But you don’t sit down there and say” I want “under this contract, but” I want it to be modified to allow me to bring my antitrust complaint “… It is a very difficult antitrust theory that you have.”

This point has been repeated often, but the reason why the teams are even in this position is that they are desperately trying to keep their charters while taking this question in the procedure. It is a difficult balance.

Chase Elliott, Hendrick Motorsports Chevrolet, Austin Dillon, Richard Childress Racing Chevrolet, Bubba Wallace, 23xi Racing Toyota, Noah Gragson, Front Row Motorsports Ford

Photo of: Sean Gardner / Getty Images

An unprecedented fight

The court argued that this charter convention seems to be an “anti-law combination, not anti-competitive”. They said again that if you want to preserve your trial, then do not enter the contract.

Another discussion was focused on the unprecedented nature of all this, which was underlined by the Thacker judge. In 135 years since the Sherman Antitrust Act was introduced, there was no case like that. Kessler conceded that he had never been approached in this way, but he raised a case involving Mitsubishi where release was used to protect antitrust behavior.

But the judges continued their interrogation, trying to link the release to anti -competitive behavior. At one point, the court asks: “What relief do you want for your racing team? You want to run in this series, right?”

Kessler replies: “We could have done it, your honor, under their conditions. It was not the object of this version.”

Judge Niemeyer is quipped: “You want to be a police officer, right?”

Car transport in the row

Photo of: Chris Graythen – Getty Images

Kessler tried to use an analogy of a monopolistic apple producer that could harm consumers of apples in the same way, aimed at simplifying the argument. “The injury is that you get too little,” Kessler said. “The relief we want is to get damage to -“

But he was again interrupted by the bench. “They do not sign the contract and do not continue, and get your relief. But the assertion that you are entitled to the contract without liberation is really an omega problem (you want to have your cake and eat it too).”

Kessler tried to plead in the event of irreparable damage, declaring that “it is not economically viable to have to qualify each week”. According to Kessler, introducing himself as open teams would be a huge financial success and could put their sponsor relationships and his driver contracts in Jeopardy. This could also harm their track performance while losing the positive aspects of the charter agreement while their league rivals still benefit.

What happens to the SHR charters if the injunction is reversed?

The Agee judge tried to put things in progress, focusing on the question to be accomplished while the debate began to derive in the base of the trial itself. “I can see this at the trial and it will be a very interesting trial, but to happen,” said Agee. “But the only thing we are here today is the preliminary injunction.”

Judge Niemeyer noted that the injunction is very close, based only on the question of liberation and that the injunction has “unappetizing things on this subject”.

Kessler again mentioned the case of Omega, claiming that it does not apply because the teams do not try to invalidate the entire charter agreement. But perhaps its most interesting point was the training effect that would occur if they suddenly lose their charters.

Cole Custer, Haas factory team

Photo of: Jared C. Tilton / Getty Images

Kessler said that overthrowing this mid-season would not hurt them, but third parties like Stewart-Haas Racing. SHR sold a charter at 23X and another Charter in FRM before closing. Everything is left is an effort in a car from Gene Haas under the factory team Haas. Kessler highlighted this, saying that you cannot simply return the charters to SHR because the organization no longer exists.

“(SHR) has no more operation to manage a team. So, if we returned the teams, he has no drivers, he has no crew at the stand, he has nothing in the middle of the Nascar season. This would take the ravages to overthrow this injunction in the middle of the season,” said Kessler. “If this remains in force until November, (then) we have finished and then we have a lawsuit and we win or lose.”

NASCAR refutation

Yates’ refutation denied that there were anti-trust violations committed by Nascar. He reiterated certain previous points on the fact that Nascar does not prevent them from participating in the Racing series. However, he then focused on his own plug regarding irreparable damage.

“Nascar and the teams are injured every day, this injunction remains in place,” said Yates. “Nascar is injured because it is forced to a contractual relationship with a consideration with which he does not want to be in a long -term contractual relationship. Other teams are injured, (because without) the injunction, other teams would have obtained more money. Other chartered teams would have obtained more money, they would have obtained a larger part of the charter pie.”

The Agee Judge asked a question focused on the open points and how many are available each week. Most weeks beyond Daytona 500 rarely see a full field and Yates argued that the teams in 23Xi and FRM would have no problem qualifying on the pace.

Signaling of the NASCAR CUP series

Photo of: Chris Graythen – Getty Images

“Two -thirds of the season are left,” said Yates. “We urge this court to act quickly because Nascar and other teams are injured.” He then repeated the sentence “having your cake and eating too” which appeared several times throughout the audience.

He also agreed with the judges, just like Kessler earlier, with regard to the need for mediation. But Yates did not seem full of hope, saying that these are the terms of the 2025 charter agreement and that Nascar does not want to change it. “We are not going to rewrite the charter contract,” said Yates.

A decision has not yet been made regarding the legitimacy of the injunction, but the clock runs while the NASCAR season takes place in the background. You can listen to the whole audience here.