NASCAR‘s Countersuit Against 23XI, Front Row Motorsports Advances
The legal battle between these parties has become a familiar topic in sports law.
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Last year, 23XI and Front Row sued NASCAR and its CEO, James France, claiming they've unlawfully monopolized premier stock car racing and used charters, which guarantee teams a starting position in NASCAR-sanctioned races but restrict their opportunities to compete in other circuits, to further their alleged conspiracy. In March, NASCAR countersued, asserting 23XI Racing and Front Row have conspired to use threatened group boycotts and other harmful measures to 'threaten, coerce and extort NASCAR' into acquiescing.
NASCAR's counterclaim included Polk, who owns 23XI with Michael Jordan and Denny Hamlin, as a defendant. Polk is depicted as largely responsible for the alleged conspiracy. Polk has been an advisor and confidant to Jordan since the 1990s and served as vice chairman of Charlotte Hornets Sports & Entertainment when Jordan was the team's majority owner.
Front Row, 23XI and Polk maintain that NASCAR's counter lawsuit is meritless and a 'retaliatory' filing designed to intimidate them and other race teams. A counterclaim raises the possibility that not only could Front Row and 23XI come up short in proving NASCAR violated antitrust law, but they could be found to have violated antitrust law themselves and thus owe NASCAR damages.
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Bell, whose granting of a preliminary injunction in favor of Front Row and 23XI was recently vacated by the U.S. Court of Appeals for the Fourth Circuit, concluded that NASCAR's counterclaim is sufficient to proceed.
Bell determined that NASCAR offers a relevant market for antitrust analysis, namely the market of entry of cars into NASCAR Cup Series races. NASCAR, Bell added, also plausibly alleges teams racing in the Cup Series 'collectively have power in the market,' and the alleged use by Polk, 23XI and Front Row of boycotts and demands for more money could cause NASCAR harm in the market. In other words, Bell found NASCAR to have adequately stated a claim.
But Bell emphasized NASCAR has satisfied a 'low bar' for proceeding past a motion to dismiss. Further, he noted that Front Row and 23XI 'have several responses' to NASCAR's allegations. The judge went so far as to suggest those responses might prove persuasive later in the litigation.
Even so, a win is a win for NASCAR at this early stage of the counterclaim litigation. The advancement of NASCAR's claims could open new terrain for pretrial discovery.
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In a statement shared with media, 23XI and Front Row attorney Jeffrey Kessler said he and his colleagues are 'disappointed' Bell did not dismiss what Kessler blasts as 'NASCAR's meritless, retaliatory counterclaim.' Kessler added that while Bell didn't side for his clients, 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.'
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