CHARLOTTE, N.C. -- A contingent of lawyers representing 12 teams not wanting to be involved in a lawsuit against NASCAR appeared in District Court on Tuesday afternoon. They said they want to move forward as partners of NASCAR, but they are "torn to pieces" after being put in a position to fight against subpoenas.
This hearing was part of a discovery dispute involving the teams not involved in the antitrust lawsuit filed by 23XI Racing and Front Row Motorsports last year.
Adam Ross, the attorney speaking for the 12 teams, presented one side of the argument during a hearing in front of Judge Kenneth D. Bell, which the teams said was a breach of the charter agreement. According to Ross, the charter agreement calls for disputes to be settled in arbitration. This keeps confidential information from ending up in stories from media members.
Ross called this a "fishing expedition" and said that NASCAR was trying to find a "poster child" team that it could point to as successful.
David Johnson represented NASCAR during this hearing. He argued that Judge Bell does indeed have jurisdiction in this discovery dispute and that the arbitration part of the charter agreement only applies to disputes related to said agreement. Johnson indicated that subpoenas over financial data were a different situation.
Kaulig Racing was not involved in this contingent after accommodating NASCAR and presenting "five pages" worth of requested financial data in response to the subpoenas.
Johnson spoke first and requested that the Court compel the 12 teams not involved in 23XI Racing and Front Row Motorsports' lawsuit to provide them with requested financial data, so that experts could examine it before trial in December. Johnson did not reveal the identity of the expert -- this will happen as part of discovery -- but he noted that they are a PHD economist.
What information does NASCAR want from such teams as Hendrick Motorsports, Team Penske, and Trackhouse Racing? This is a sizable list that covers 11 years and includes revenue from OEM partners, costs associated with purchasing Goodyear tires, and revenue from sponsors.
NASCAR also seeks data associated with Xfinity teams, Truck Series teams, and teams in other racing series. Team Penske was used as an example during the hearing given its ties to IndyCar and IMSA. The subpoenas also sought 11 years worth of emails and texts to go along with the financial data.
Ross said during the hearing that NASCAR's legal team specifically wants financial data from Hendrick Motorsports about the Garage 56 program, which it did in partnership with NASCAR, and Kyle Larson's attempts to complete the Indy 500 and the Coca-Cola 600 on the same day.
This information is highly confidential, and as such, the teams do not want to share it with each other or NASCAR. Ross compared this information to the recipe for Coca-Cola while saying that these subpoenas were the "most broad and intrusive" that he had seen in his career lasting 22 years.
Judge Bell repeatedly asked NASCAR why it needed such "granular" financial information from the teams and why it couldn't just use top-level data to defend against 23XI Racing and Front Row Motorsports in a December trial. He also asked about anonymous data. This part is key considering that the 12 teams repeatedly voiced concerns about confidentiality.
According to Johnson, NASCAR needs specific data for multiple reasons. One is to compare the numbers with estimates teams provided during charter negotiations. Another reason is to counter allegations from 23XI and Front Row that it takes "$18 million to operate" a Gen 7 car for one year. He mentioned during the hearing that some teams could be spending "in excess," which prompted Judge Bell to ask if this was an efficiency argument.
NASCAR said it would redact sponsor identities and list teams anonymously during the trial. This comment was met with some skepticism from team attorneys. They argued that it would not be difficult for people to figure out which team is which. Part of this argument is that teams don't run the same number of cars.
Judge Bell did not deliver an immediate ruling, but promised he would make one quickly. He also closed the nearly two-hour hearing by delivering another message about this ongoing legal battle.
"I am amazed at the effort going into burning this house down over everybody's heads," Bell said. "But I'm the fire marshal and I will be here in December if need be."