23XI and FRM Go to Appeals Court in NASCAR Lawsuit

What’s Happening?

Friday Morning, the legal teams of both NASCAR and the two teams suing them, 23XI Racing and Front Row Motorsports, went to court for oral arguments in NASCAR’s appeal of a Dec. 18 ruling that allowed the teams to race as chartered entries in 2025.

The two sides met today as part of the ongoing lawsuit filed by 23XI Racing and Front Row Motorsports on Oct. 2. As part of the early stages of this lawsuit, the two teams, which were held out on signing the 2025 NASCAR Charter Agreement, motioned for a preliminary injunction to compete as chartered teams throughout the lawsuit.

This gives them access to revenue sharing and automatic entry into every NASCAR Cup Series race for each of their three entries. This ruling was in spite of a release in the NASCAR Charter Agreement that said the two teams could not sue NASCAR while racing as chartered teams. The Dec. 18 ruling also allowed the two teams to be granted charters they had purchased from the now-shuttered Stewart-Haas Racing.

During the hearing, each side’s lawyer was allowed 15 minutes to discuss their claims to a panel of judges from the Fourth Circuit of Appeals.

In NASCAR’s Feb. 12 appeal brief, they claimed that the court’s Dec. 18 decision “was fraught with errors, both legally and factually.” They also claimed that the court altered the status quo by making NASCAR grant the teams Charters, though the teams did not agree to “many of the Charter’s material terms.”

NASCAR repeated this sentiment today, with attorney Christopher Yates stating that he was going to focus on three facts:

• “No court has ever held that a release of claims provision can be anticompetitive conduct in violation of section two of the Sherman Act.”
• “A release does not harm competition. A release, of course, just focuses on the claims between the two parties.”
• Yates also stated that the injunction was mandatory and guaranteed payments to teams that did not sign the 2025 charters, thereby harming NASCAR and other racing teams.

23XI and FRM attorney Jeffrey Kessler claims, “there’s no legal dispute, this is a factual dispute.” However, his claims did see pushback, with the main question being whether the teams, by getting the contract but not the release, were attempting to have their cake and eat it too.

Judge Paul Niemeyer said he doesn’t see how the release addresses competition, saying, “If you don’t want the contract, you don’t enter into it, and you sue. Or if you want the contract, you enter into it, and you’ve given up past releases. But I think our Omega* observation is you can’t have your cake and eat it too.”

You can listen to the entire video via YouTube above. Yates (NASCAR) begins at 15:30 and Kessler (23XI and FRM) at 31:00.

The teams and NASCAR are set to meet for a two-week trial in December. However, there are active counterclaims, with NASCAR filing a counterclaim on Apr. 17. Hopefully, this suit should be completed prior to the start of the 2026 season.

If the two teams lose this appeal, they will have to compete as open teams this season. We have covered this lawsuit extensively via the link below.

*Editors note: This is in reference to Omega World Travel vs TWA, a precedent case being used.

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