A three-judge panel has urged the parties involved in an antitrust lawsuit to participate seriously in mediation after a Friday morning appeals hearing.
"If I can add one thing as unsolicited observation from where I sit," Judge Steven Agee said. "I would hope the parties would take mediation seriously."
Attorneys representing NASCAR, 23XI Racing, and Front Row Motorsports met with the panel at a Fourth Circuit Court of Appeals hearing. The lead attorney representing NASCAR had time to present arguments stating why the Fourth Circuit Court of Appeals should overturn the injunction granted to 23XI Racing and Front Row Motorsports last December.
This preliminary injunction requires NASCAR to allow 23XI Racing and Front Row Motorsports to race as chartered organizations while continuing with an antitrust lawsuit. The current charter agreement removes the ability for teams to pursue legal action against NASCAR.
The lead attorney representing the two Cup Series teams then had time to present his side of the argument. The three-judge panel did not make a ruling, but they explained why mediation could be best for this antitrust lawsuit.
"Don't you think that this would be a wonderful case for mediation," Judge Paul Niemeyer asked. "Both sides have major issues, and if the parties recognize a little bit of give and take, it looks to me like it's something that could be worked out."
Jeffrey Kessler, lead attorney for 23XI Racing and Front Row Motorsports, indicated that his side is open to mediation. He said that he is in favor of a settlement for the two teams pursuing the antitrust lawsuit and the defendant (NASCAR).
Christopher Yates, the attorney representing NASCAR, said that they would participate in mediation but also pushed back against the recommendation.
"Certainly, but we're not going to rewrite the charter contract. I mean, the charter contract exists, and that's what they really want at the end of the day.
"They don't like the terms. They call all the terms, they call them all below competitive. We are not going to rewrite the charter contract, Your Honor. But certainly, we're going to participate in mediation."
The Appeals hearing in Richmond, Virginia, began with the attorneys presenting their sides of the lawsuit and the previously granted injunction, but it quickly turned to a back-and-forth discussion as the three judges asked numerous questions.
Judge Agee first asked Yates what would happen if the panel agreed with NASCAR and overturned the preliminary injunction. He asked about the qualifying process and the number of open teams allowed each week.
Yates said that the panel should quickly revoke the preliminary injunction, saying that it was harming both NASCAR and the teams that signed the charter contract.
"Other racing teams would receive more money if NASCAR had not been ordered into this contractual relationship with these plaintiffs," Yates argued. "So this injunction very clearly offends the status quo."
Judge Niemeyer was the vocal judge during Kessler's time presenting his side of the argument. Judge Niemeyer appeared skeptical of the teams' side while saying that 23XI Racing and Front Row Motorsports wanted to have their cake and eat it too by filing an antitrust lawsuit and continuing to race.
"If you don't want the contract, you don't enter into it, and you sue," Judge Niemeyer said. "Or if you want the contract, you enter into it, and you've given up past releases."
Another key part of the hearing was the potential fallout of any decision. Kessler argued that revoking the preliminary injunction could cause havoc midway through the season. He said that the teams could lose their drivers and sponsors due to their respective contracts.
Kessler also said that revoking the preliminary injunction would cause harm to Stewart-Haas Racing, the now-inactive team that sold charters to 23XI Racing and Front Row Motorsports.
"If we gave him the teams back, he has no drivers, he has no pit crew, he has nothing," Kessler argued. "In the middle of the NASCAR season, it will cause havoc to overturn this injunction in the middle of the season.
"While if it just stays into effect till November, we're done. And then we have a trial, and either we win or we lose."
The expectation is that a ruling from the Fourth Circuit Court of Appeals will come later this month.