A three-judge federal appeals court panel expressed skepticism Friday morning over the grounds used by Michael Jordan’s race team and one other to win a preliminary injunction against NASCAR in their ongoing antitrust lawsuit.

23XI Racing and Front Row Motorsports were previously granted an injunction from a North Carolina district court to race this season under the terms of NASCAR’s “charter agreements,” which guarantee entries and payouts into each race, after both teams refused to sign new agreements last year.

But NASCAR argued the basis of the injunction was flawed — and during a hearing at the Fourth Circuit Court of Appeals panel in Richmond, Va., the judges’ questioning leaned toward agreement. Judge Paul Niemeyer said the injunction was narrowly focused on a standard release clause that would have prevented the teams from bringing a lawsuit, but questioned why that would prompt antitrust action.

“If you don’t want the contract, you don’t enter into it and you sue,” Judge Paul Niemeyer said. “Or if you want the contract, you enter into it, and you’ve given up past releases.

But I think our Omega observation (in a 1997 case between a travel agency and TWA) is you can’t have your cake and eat it too.”

While the judges said the race teams may very well have a viable case at trial, which is scheduled to begin Dec. 1, they said the issue before the appeals court did not concern the facts in the case.

Their entire focus hinged on the release clause the teams wanted removed before they would sign the charters, because the teams had argued it would require them to waive their rights to bring an antitrust lawsuit.

“I can see all this at trial, and it’d be a very interesting trial yet to happen, but the only thing we’re here on today is the preliminary injunction — and the only basis the district court ruled on for success on the merits was a release,” Judge Steven Agee said. “So it seems like to me it’s the release and the release only that’s determinative for today’s purposes.”

Judge Stephanie Thacker noted NASCAR’s argument that in more than 125 years of the Sherman Antitrust Act, no court has ruled in favor of the teams’ argument that signing a release constitutes a monopoly. Attorney Jeffrey Kessler acknowledged that, but said that the precise situation has never been adjudicated previously.

“The precise question as to whether or not a monopolist may use a release to help maintain its conduct has not been approached either way,” Kessler said. “It’s not like there’s a case one way or the other.”

Responded Niemeyer: “You may be able to show at a trial that it’s part of an anti-competitive process, but it just seems like a big hill to climb if you don’t have a case that supports you.”

The judges also questioned Kessler on what the teams hoped to achieve from their antitrust claim, but he struggled to articulate precisely what the teams sought.

“Set aside the releases in the contract; what relief did you want?” Niemeyer said. “You want to be a policeman?”

Kessler said NASCAR has “set below-competitive market prices to buy our services,” comparing it to the NCAA providing too little compensation for college athletes.

The injury to the teams, he said, was “getting too little. The relief we want is to get damages for pain.”

“Then don’t sign the contract,” Niemeyer responded. “Don’t sign the contract and sue and get your relief.

But to claim that you’re entitled to the contract without the release is really an Omega problem (of having their cake and eating it, too).”

NASCAR attorney Christopher Yates said the court should swiftly revoke the preliminary injunction because it was harming both NASCAR and the other race teams who weren’t involved in the suit.

“NASCAR is being hurt because it’s forced into a contractual relationship with a counterparty that it doesn’t want to be in a long-term contractual relationship with,” Yates said.

“Other teams are being hurt because, but for the injunction … other charter-holders would have gotten more money. They would have gotten a bigger part of the charter pie.”

If NASCAR prevails, it would raise the question of what happens to the teams’ drivers, sponsors and charters.

Previously, it was disclosed that drivers Bubba Wallace and Tyler Reddick would be allowed to join a different team if 23XI did not provide charters (and thus guaranteed entries to races) for them.

It would also call into question the status of purchased charters from the now-defunct Stewart-Haas Racing (one each to 23XI and Front Row) in the offseason, which are being used for drivers Riley Herbst and Noah Gragson.

Kessler said pulling those charters at this point in the season would cause “havoc.”

“(SHR) no longer has any operation to run a team,” Kessler said. “So if we gave him the teams back, he has no drivers, he has no pit crew, he has nothing. …

If (the injunction) just stays in effect until November, we’re done. And then we have a trial, and either we win or we lose.”

The judges urged both parties to settle in mediation.

Niemeyer noted this would be “a wonderful case for mediation” because “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.”

But while Kessler said he’s “in favor of a settlement,” Yates wasn’t as convinced.

“We’re not going to rewrite the charter contract,” Yates said. “That’s what they really want at the end of the day. They don’t like the terms.”

A ruling is expected later this month.

(Photo of Michael Jordan: Jeffrey Vest / Icon Sportswire via Getty Images)