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In a unanimous decision, a three-judge panel from the Fourth Circuit Court of Appeals has nullified a previous preliminary injunction that allowed 23XI Racing and Front Row Motorsports to compete as chartered teams, thereby accessing the associated financial perks. The judges criticized the original ruling, stating that the district court judge overstepped by granting the injunction.

Attorney Jeffrey Kessler, representing both 23XI Racing and Front Row Motorsports, expressed disappointment with the decision. "We are reviewing the ruling to determine our next steps," he said. Kessler emphasized that the decision is primarily focused on a narrow aspect of the case—whether a release of claims in the charter agreements is anti-competitive. He maintained that the ruling does not hamper their chances of winning the trial scheduled for December 1. "We are committed to racing this season and fighting for a fair economic system free of anticompetitive conduct," Kessler added.

The decision will not impact the teams' participation in the upcoming race at Michigan International Speedway. Co-owned by Michael Jordan and Denny Hamlin, 23XI Racing, along with Front Row Motorsports owned by Bob Jenkins, plan to continue their legal battle. They have the option to file a petition for rehearing before the entire Fourth Circuit Court of Appeals by June 19. If they choose this route, the earlier decision will remain on hold until June 26.

The appellate court criticized the district court’s reasoning, stating that the plaintiffs, 23XI Racing and Front Row Motorsports, wanted to benefit from NASCAR's system while simultaneously seeking to dismantle it. This primarily revolved around a clause in the charter agreement that barred teams from suing NASCAR. Last December, U.S. District Court Judge Kenneth D. Bell granted the preliminary injunction, arguing that fans had an interest in seeing the best teams compete.

During a May 9 hearing, an appellate judge remarked that plaintiffs couldn't selectively agree to contract terms. Citing this, the panel concluded that the theory of antitrust law used by the district court did not hold sufficient grounds. "Because that theory of antitrust law is 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 judges noted.

The case remains scheduled for trial in December, and both racing teams are determined to continue their fight. 23XI Racing currently fields three Cup teams with drivers Tyler Reddick, Bubba Wallace, and Riley Herbst, while Front Row Motorsports has drivers Todd Gilliland, Zane Smith, and Noah Gragson.