Michael Jordan’s Racing Team Loses NASCAR Charter in Appeal (2)

Michael Jordan’s racing team lost its bid to compete in the 2025 NASCAR season under a coveted charter designation, after the Fourth Circuit reversed a injunction granted by a district court judge last year.

The appeals court said the injunction unfairly forced NASCAR into a deal with Jordan’s team, 23XI, and another team, Front Row Motorsports Inc., that provided both of them with favorable terms but excluded a litigation release clause that is standard for such agreements.

Both the plaintiffs and the district court failed to show how the litigation release would have injured competition, the Thursday opinion by Judge Paul V. Niemeyer of the US Court of Appeals for the Fourth Circuit said.

“Absent anticompetitive conduct in the service of monopoly power, the law recognizes that parties are ‘free to choose the parties with whom they will deal, as well as the prices, terms, and conditions of that dealing,’” the opinion said.

The decision is a setback for the NBA Hall of Famer, whose racing team sued NASCAR last year claiming the organization holds a monopoly over premier stock car racing in the US and that its “charter agreements” are unlawful. Chartered teams are guaranteed racing spots and earn money for performance.

Jeffrey Kessler, a Winston & Strawn LLP attorney who represents 23XI and FrontRow Motorsports, said in a statement Thursday that he is disappointed by the appellate court ruling and is reviewing the decision to determine 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 doesn’t impact the racing team’s chances of winning at a trial scheduled for Dec. 1, Kessler said.

“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,” Kessler said.

A NASCAR representative didn’t immediately respond to a request for comment.

In granting the injunction that allowed Jordan’s team to compete under the charter designation, the district court didn’t support its conclusion that NASCAR acquired or maintained monopoly power through anticompetitive conduct when it required a release to do business, the opinion said.

“The court proposed that the release itself constituted anticompetitive conduct, but the release did not address competition,” the appellate court said. “Rather, it was a standard release provision that released all claims based on all sorts of prior conduct, including, NASCAR maintains, claims that it violated the antitrust laws.”

Niemeyer’s opinion also said the injunction was “not supported by any case of which we are aware, we conclude that it was not a likely basis for success on the merits and vacate the injunction.”

The decision comes after Niemeyer raised doubts about the injunction at oral arguments in May. Niemeyer’s opinion was joined by Judges Steven Agee and Stephanie D. Thacker.

The injunction would have allowed the teams to race under charter agreements, which promises entry into high-profile NASCAR racing events and pay for performance. Open teams are disadvantaged as they are not promised spots.

NASCAR argued the teams’ lawsuit is an attempt to misuse the judicial system to try to get better terms than the teams that chose to sign the 2025 charter agreements last year.

NASCAR is represented by Latham & Watkins LLP.

The case is 2311 Racing LLC v. NASCAR, 4th Cir., No. 24-2245, 6/5/25.