23XI Racing and Front Row Motorsports's attempt to secure a foothold in NASCAR's charter system has hit a roadblock as NASCAR appeals a court ruling which approved the preliminary injunction request from the teams.
The lawsuit, initiated by 23XI Racing and Front Row Motorsports, targets what they refer to as monopolistic practices by NASCAR, specifically focusing on NASCAR's charter system, implemented in 2016, which guarantees teams a spot in races and promises financial stability.
The controversy began after negotiations over the 2025 agreements failed, prompting the teams to file their legal dispute on October 2, 2024, in the Western District of North Carolina. This action was taken against NASCAR and its CEO, Jim France, accusing them of using the charter system to enrich themselves at the expense of competitive fairness.
At the heart of the lawsuit is a preliminary injunction that was granted, allowing the teams the ability to acquire charters from Stewart-Haas Racing to compete in the 2025 season as chartered teams.
However, NASCAR has responded by filing an emergency appeal to stay this injunction, citing severe consequences. In NASCAR's emergency motion, the organization argued that the injunction would bind them into a lasting contractual relationship, stating:
"Pursuant to Rule 62(c) of the Federal Rules of Civil Procedure, Defendants move this Court to stay its December 18, 2024 Order granting Plaintiffs a preliminary injunction.
"NASCAR will suffer irreparable harm without a stay. The Court's decision forcing NASCAR to approve Plaintiffs' SHR Charter transfers is not a 'limited' injunction for the 2025 Cup Series season. Instead, it will effectively force NASCAR into a seven-to-fourteen-year contractual relationship with Plaintiffs with respect to these Charters..."
This response reveals NASCAR's concern that the injunction could undermine their operational control and future league policies. The organization is keen to reduce the number of chartered teams from 36 to 32 by the 2025 season.
The legal proceedings are being overseen by U.S. District Court Judge Bell, who intends to resolve the lawsuit before the 2025 racing season begins if a settlement is not reached. Judge Bell explained:
"A Case Management schedule will be set by the Court which, in the absence of a voluntary resolution of this dispute among the Parties, provides for a trial on Plaintiffs' claims to be concluded in advance of the beginning of the 2026 NASCAR race season."
Bell later provided a deadline for a response from 23XI Racing and FRM, stating:
"With respect to the timing of Plaintiffs' response to that motion the court finds that it would be unreasonable to require Plaintiffs to respond in a single day. Plaintiffs shall have until December 23, 2024 at 10:00 a.m. to file any response to Defendants' Motion to Stay Pending Appeal, and Defendants shall not file a reply."