Case Analysis: 2311 Racing LLC v. Nat'l Ass'n for Stock Car Auto Racing, LLC, No. 24-2245, 2025 WL 1584984 (4th Cir. June 5, 2025)

The Fourth Circuit vacated a preliminary injunction in the antitrust lawsuit brought by Michael Jordan–backed 23XI Racing and Front Row Motorsports against NASCAR. Here are my thoughts.

On June 5th, the Fourth Circuit Court of Appeals issued a short opinion that vacated a preliminary injunction in the NASCAR antitrust case brought by the Michael Jordan–backed 23XI Racing and Front Row Motorsports. Here’s the opinion: https://www.ca4.uscourts.gov/opinions/242245.P.pdf. In this post, I want to give some of my initial thoughts about the decision. (I am hoping to do a lot more posts like this in the future. If there is a decision you think I should analyze, please email or message it to me.)

The facts in 2311 Racing LLC v. Nat'l Ass'n for Stock Car Auto Racing are quite simple. NASCAR demanded that companies sign contracts (called charters) to race in their circuit. Among many problems with the 2025 Charter NASCAR offered the racing teams, including a broad non-compete provision that restricted racers from racing in events outside of NASCAR’s circuit, it required them to waive past antitrust claims and (according to the complaint) was so vaguely worded that it could prevent the “right to assert future antitrust claims against NASCAR with respect to the anticompetitive terms that NASCAR has imposed upon the teams in the 2025 Charter Agreement.” 23XI Racing and Front Row Motorsports (hereinafter “the Plaintiffs”) refused to sign, but they wanted to keep racing while litigating their claims.

The district court granted a narrow injunction that authorized the Plaintiffs to race under the terms of the 2025 charter, but without enforcing the antitrust claims release. The Fourth Circuit reversed that decision.

The Fourth Circuit reasoned that because the Plaintiffs never signed the 2025 Charter, there is no agreement in place. Without an agreement, the court concluded there is no coercive contract to challenge, no likely antitrust violation under the theory of harm presented, and therefore no basis for a preliminary injunction. In the court’s view, the mere offer of a deal with objectionable terms without the other party agreeing to them, even by an accused monopolist, doesn’t amount to unlawful conduct worthy of a court issuing preliminary relief. Here’s what the Fourth Circuit said:

But here’s the odd twist: the teams were fine with all the terms except the one that absolved NASCAR of past antitrust violations. That wasn’t enough though.

Part of the problem was that the lower court focused heavily on the injunction standards required by the Supreme Court but barely developed the antitrust theory concerning the conduct’s harm to competition. The court was quite strident in its opinion when it said that the district court’s statement asserting “[m]arket aspirants should not be forced to choose between participation in a market and the later assertion of their ongoing/future antitrust rights, nor should a monopolist be permitted to include in the market only those who consent to the monopolist’s alleged wrongdoing” was “not an appropriate inquiry or observation.”

The Fourth Circuit’s conclusion is an unfortunate consequence of the specific requirements for antitrust lawsuits. Special standing requirements demand that only a particular type of plaintiff initiate the lawsuit. Special injury is required for the plaintiff to incur, regardless of the economic damage done to them. Special everything. It’s a real problem in antitrust litigation. Here, the district court and the plaintiffs needed to show much more detail concerning how this conduct “harmed competition” (an admittedly empty phrase, which I discuss in a little more detail here).

Plaintiffs in antitrust litigation, in other words, are required to operate like they are the lead harmed party in a class action, representing everyone in the specific market, except they are the only ones who have to initiate and litigate the entire lawsuit. Epic Games, the video game developer that created Fortnite, recently discovered this fact when, after a half-decade, their antitrust victory forced Apple to open its closed App Store payment system, allowing developers to link to alternative payment systems (thereby avoiding Apple’s onerous 30% tax on in-app transactions). Epic Games’ victory is also a victory for its competitors, but it had to foot the entire bill and navigate the whole legal rigmarole on its own.

The practical result of the Fourth Circuit’s ruling is that the Plaintiffs must endure some harm before their case can meaningfully proceed. So the Fourth Circuit is saying the Plaintiffs only have two options: (1) sign the 2025 Charter Agreement, which includes a broad release of current antitrust claims, and, given how vague the release is, could arguably chill future claims as well, thereby forcing them to abandon their lawsuit before it begins; or (2) refuse to sign, preserve their right to litigate, but lose guaranteed access to NASCAR races, putting their business in serious jeopardy.

This position violates a long-held principle of Section 2 of the Sherman Act, whereby a party does not have to endure harm for a violation to trigger so long as the conduct tends toward an unlawful result. The Supreme Court articulated this principle in Fashion Originators' Guild of America v. FTC. In that decision, the Supreme Court stated:

“Nor is it determinative in considering the policy of the Sherman Act that petitioners may not yet have achieved a complete monopoly. For ‘it is sufficient if it really tends to that end and to deprive the public of the advantages which flow from free competition.’”¹

The kind of tendency that Section 2 proscribes is precisely what the Plaintiffs alleged. NASCAR knew how much power it had when it tried to impose strict, non-negotiable terms on the Plaintiffs. Just read the complaint. Some excerpts are below.

It’s analogous to being in a one-hospital town, where the hospital says, “We’ll treat you, but only if you agree not to sue us for anything we did in the past, even if it almost killed you. We won’t guarantee that the same thing won’t happen again, and if it does, you’ll have to give up future care or fight us from the outside without treatment.”

The kicker is that the 2025 Charter was not permanent. Even if the plaintiffs were to file a new lawsuit after signing the charter, nothing is stopping NASCAR from updating the agreement again and attaching a new liability release, effectively eliminating any new claims before they ever reach a courtroom. This is particularly true given that antitrust litigation often takes an absurdly long time to obtain a final judgment. To be clear, the Fourth Circuit did not explicitly endorse this strategy, but by refusing to intervene, it has implicitly allowed it to continue.

Courts might be persuaded by broader public policy concerns about monopolists using contractual releases to shield themselves from legal scrutiny. However, in this case, the Fourth Circuit, relying on its own precedent, held that a general release of antitrust claims is not inherently unlawful and is not enough to justify preliminary relief without more evidence on how the policy harms competition more generally.

The Fourth Circuit did acknowledge that there are important distinguishing elements between retrospective and prospective releases of liability. Citing Supreme Court precedent,² the Court recognized that prospective waivers of liability can violate public policy and would be subject to judicial sanction. But by declining judicial intervention, the Fourth Circuit has effectively enabled a legal game of cat and mouse, where NASCAR can continue revising its charter and requiring new releases faster than the courts can resolve the underlying litigation.

The Fourth Circuit found it problematic that the Plaintiffs sought to “participate in the very business they sought to dismantle.” But, of course, the Plaintiffs think this because they believe it's illegal under the law, but they still need money for their livelihoods.

Perhaps most striking is the court’s statement that “[t]he effect of such a release is to eliminate antitrust suits… not to eliminate or injure competition.” So, according to the Fourth Circuit, an accused monopolist can use its market power to block/suppress lawsuits that are specifically designed to punish firms for injuring competition. This is a classic case of formalism over substance. So long as a release targets legal claims and not competitors in a clear and direct way, it may not trigger antitrust scrutiny, even if the conduct functionally insulates a monopolist from accountability.

The Fourth Circuit, in other words, appears to sidestep another well-established principle of antitrust law that states businesses cannot use their resources or access to specific commercial or resource channels as a “trade weapon” and that the ability of a corporation to conduct business “is neither absolute nor exempt from regulation.” Rather than confronting that principle head-on, the court concluded that mandating a release as a condition for doing business doesn’t, on its own, amount to unlawful conduct under the antitrust laws worthy of preliminary protection. This narrow reading risks undermining the broader protections those principles were meant to ensure. Keep in mind that the Plaintiffs were not the only ones who were required to sign these agreements; they were just the only ones who didn’t and sought to challenge those agreements in court.

Fortunately, the Fourth Circuit’s opinion doesn’t adversely affect the merits of the litigation. Its ruling is limited to determining whether the district court properly issued a preliminary injunction. The Plaintiffs’ lawsuit can still proceed. But, since they didn’t sign the 2025 charter, I suspect that they will not be able to participate in races this year. NASCAR has said that they don’t know what they are going to do with the six charters held by the Plaintiffs. It’s worth watching to see what the Plaintiffs do next.

I hope the Plaintiffs keep fighting, and post-decision interviews indicate they are likely to. Denny Hamlin, co-owner of 23XI Racing, stated that the setback is “just such a small part of the entire litigation.”

If the case eventually reaches a final judgment, it could have major implications for how monopolists use contracts not only to insulate themselves from legal challenges but also for their ability to coerce their dependent trading partners.

At its core, the Plaintiffs’ lawsuit is about power. NASCAR, like other dominant firms, is using contract terms not only to shield itself from legal accountability but also to unilaterally dictate the economic terms of participation in an entire industry. If the courts decide they won’t intervene early, the legal system risks reinforcing the very monopolistic power Congress designed the antitrust laws to restrain.

NASCAR’s charter agreements lock in teams with take-it-or-leave-it terms, ban them from competing in competitor races, and force them to waive legal claims. Does this scenario sound familiar? It’s the same kind of coercive contracting used to suppress worker rights (think non-competes and arbitration provisions that prevent workers from obtaining better employment and fighting their legal claims in court). If antitrust policy is to remain effective in curbing monopolistic control, it should be able to address conduct like this.

Thanks for reading.

1. Fashion Originators' Guild of Am. v. FTC, 312 U.S. 457, 466 (1941) (quoting United States v. E.C. Knight Co., 156 U.S. 1, 16 (1895); citing Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 237 (1899)).

2. Specifically citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 n.19 (1985).