NASCAR Wins Big Appeal, 23XI Racing and FRM NO LONGER Treated as Chartered Teams

What’s Happening?

The United States Court of Appeals for the Fourth Circuit has ruled in favor of NASCAR and overturned a Dec. 18 ruling that allowed the two teams suing NASCAR, 23XI Racing and Front Row Motorsports, to race as chartered entries in 2025.

U.S. Court of Appeals has ruled in favor of NASCAR and vacated the injunction requiring NASCAR to treat 23XI and Front Row as chartered teams.

— Bob Pockrass (@bobpockrass) June 5, 2025

The teams have 14 days to petition for a rehearing. At the earliest the judgment will not take effect until seven days after that 14 day deadline or 21 days from now. This date would be Jun. 26, two days before the NASCAR Cup Series race at EchoPark Speedway in Atlanta.

This ruling overturns the Dec. 18 decision that granted 23XI Racing and Front Row Motorsports their two charters each for the 2025 NASCAR Cup Series season. That Dec. 18 ruling also granted the two teams one charter each that they had purchased from the now-shuttered Stewart-Haas Racing, totaling three charters per team.

In NASCAR’s appeal brief filed on Feb. 12, the sport claimed that the court’s Dec. 18 decision “was fraught with errors, both legally and factually.” The two sides made their case to the appeals court on May 9, and saw the Judges pushed back at the teams claims.

The teams filed their initial preliminary injunction to compete as chartered teams on Oct. 9; they failed to obtain that initial injunction but refiled it on Nov. 27. The teams felt they needed this injunction as a release in the NASCAR Charter Agreement prohibited teams signing the agreement from suing NASCAR.

Today’s ruling stated in regards to that release provision:

“In short, 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.”

23XI and FRM Lawyer Jefferey Kessler has released a statement on the ruling:

“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps. 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.”

Background

NASCAR’s charter system allows charter-owning teams to automatically start in the first position in NASCAR Cup Series races and receive valuable revenue sharing via NASCAR’s media rights deal. By not signing the new NASCAR Charter Agreement last fall, 23XI and FRM forfeited these benefits until the now-overturned Dec. 18 ruling granted them these rights.

This decision, should it not be overturned, could have a ripple effect on the NASCAR world.

For example, a major aspect of the now vacated ruling was the team’s claim that drivers and sponsors could leave the teams if they did not have their charters for the duration of their Oct. 2 lawsuit. The Dec. 18 filing claimed that Bubba Wallace, Corey Heim, Noah Gragson, and Tyler Reddick contacted their teams about free agency if they did not have Charters. Now, with this status gone, the teams could face this issue again.

Furthermore, if there are six combined charters re-entering the market, a limited number of teams could expand to two or even three cars apiece. Either way, this decision by the United States Court of Appeals could have a major impact on the future of NASCAR Silly Season.

We have covered this lawsuit extensively via the timeline linked below. This is a developing story and will be updated as new information is available.

What do you think about this? Let us know your opinion on Discord or X. Don’t forget that you can also follow us on Instagram, Facebook, and YouTube.