A FEDERAL court has overturned a major ruling in Michael Jordan’s lawsuit against Nascar.
Front Row Motorsports and 23XI racing are battling against Nascar in court, but were just handed a major setback.
GettyMichael Jordan’s Nascar team is at risk of getting kicked out[/caption] GettyAn appeals court ruled that 23XI’s ability to race without a charter should not have been granted[/caption]Nascar runs off charter agreements, allowing teams to race in the series.
However, Michael Jordan’s 23XI — which is co-owned by current driver Denny Hamlin — argued that these charters were unfair.
They refused to sign the charter and took Nascar to court, claiming they were a monopoly.
In December, a US District Court allowed 23XI and Front Row to race as charter teams without being subject to a clause that prevents teams from suing Nascar.
That changed on Monday, thanks to a US Court of Appeals ruling.
The ruling stated that the lower court “abused its discretion” with the first injunction.
This gives Nascar a clear path to strip 23XI and Front Row of their charters, which each team has three of.
Those charters are valued in the tens of millions of dollars.
Without a charter, 23XI and Front Row would be forced to race as “open” teams, meaning they could fail to qualify for races.
It also means the teams would earn significantly less money from races.
“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps,” Jeffrey Kessler, attorney for 23XI and Front Row, said in a statement.
“This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for December 1.
“We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”
The teams claimed that Nascar having a release clause in charter agreements was a monopolistic practice.
“Because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory,” the court said.
“And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction.”
When appeal was heard in May, judges warned that 23XI’s claim sounded like “having your cake and eating it too.”
“If you don’t want the contract, you don’t enter into it and you sue,” Judge Paul Niemeyer said at the time.
“Or if you want the contract, you enter into it, and you’ve given up past releases.”
The ruling will not immediately go into affect, as 23XI and Front Row have the right to appeal the ruling on Nascar’s appeal.
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