In October 2024, Denny Hamlin did what few would dare as he took NASCAR to court. Partnering with NBA legend Michael Jordan and Front Row Motorsports, Hamlin filed an antitrust lawsuit that shocked the racing world. The claim was bold: NASCAR was abusing monopoly power and cornering teams into unfair deals. “I’m risking a lot… Financially. I’m putting my reputation on the line. It’s all a risk, but it’s all for the better good,” Hamlin said. Denny and Co. argued they were being boxed out. They refused to sign the 2025–2031 charter agreement, while the other teams agreed. It was a stand-off. The stakes were massive. However, in December 2024, a lower court sided with Hamlin’s camp. It granted them an injunction, allowing them to race as chartered teams in 2025 and buy charters from Stewart-Haas Racing. For a moment, it looked like the rebels had won. But now, nearly nine months later, everything has changed.

The Court of Appeals has overturned the earlier ruling. Denny Hamlin and company are back where they started, without charters, without guarantees, and with the threat of a $100 million hit looming over their heads. The gamble they made in court may now cost them everything.

On June 5, 2025, the U.S. Court of Appeals for the Fourth Circuit delivered a stunning blow to 23XI Racing and Front Row Motorsports. The panel of judges reversed the lower court’s injunction. That ruling had allowed the two teams to compete in the 2025 season as chartered teams. Now, that safety net is gone. The court stated the previous decision lacked legal support. The statement said, “Because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory. And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction.” 

Judge Paul V. Niemeyer of the US Court of Appeals removed the injunction, ruling that the lower court “abused its discretion.” He told the teams back in May, making the decision obvious for some, “If you don’t want the contract, you don’t enter into it and you sue. Or if you want the contract, you enter into it, and you’ve given up past releases.” 

NASCAR stripped the teams of the three charters they were awarded, including those they claimed to purchase from the now-defunct Stewart-Haas Racing. NASCAR no longer has any obligation to treat 23XI or FRM as chartered teams. That means no guaranteed race entries, no cut of the media rights pot, and no automatic place on the grid. They’re now “open teams,” meaning they must qualify for each race and will receive no guaranteed revenue. The ruling reaffirms NASCAR’s control over the charter system and undermines the basis of the lawsuit.

Notably, earlier on May 9, NASCAR had argued that allowing two non-signing teams to enjoy charter benefits while suing the organization was unfair. The court agreed. They saw it as an attempt to “have your cake and eat it too.” The appellate judges found the earlier court’s rationale weak and lacking legal foundation. Now, without the injunction, 23XI and FRM are in limbo. Their operation plans for 2025, including marketing, sponsorship, and driver contracts, could unravel quickly. The cost of this reversal could exceed $100 million in lost revenue, branding impact, and team devaluation.

Jeffrey Kessler, attorney for Denny Hamlin and Co. said after the ruling, “We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps.” The teams have 14 days to petition for a rehearing. If that fails, they have until June 26 before the decision becomes final. That’s just two days before the Cup Series heads to EchoPark Speedway in Atlanta. Teams may still appeal to the Supreme Court, though that path is rare and uncertain. Meanwhile, the court encouraged both parties to explore mediation. NASCAR said they’re open to it but made it clear: “We’re not going to rewrite the charter contract.” That leaves limited room for compromise.

Could Tyler Reddick Walk Away?

Tyler Reddick signed with 23XI Racing with big expectations. But those expectations were built on the foundation of a chartered team. Now, with that gone, his future looks uncertain. According to NASCAR insider Bob Pockrass, driver contracts often require a chartered ride. Without one, drivers can legally walk away. When asked about this possibility a few months ago, Pockrass replied, “Team contracts with drivers require a chartered car, so theoretically the drivers could leave.”

In late 2024, there were already whispers. If 23XI lost its charter, Reddick and some key sponsors might exit. Those rumors now carry weight. The court decision just made things very real. Sponsors pay top dollar for guaranteed visibility. Without that, contracts could be renegotiated or terminated. And if financial instability rises, performance on track could dip too, another red flag for drivers. Noah Gragson, who recently joined Front Row Motorsports, sounded calm. “I’m probably not the guy to ask, but I do feel confident we’re going to race,” he said.

But Tyler Reddick’s silence on the matter speaks louder. Losing him would hurt 23XI both in the standings and in the garage. With millions in deals and a high-profile roster, the pressure is now on 23XI to find a way back to stable ground. Whether through appeal or mediation, they need a win soon, or risk watching their top talent walk out the door.