Release-of-Past-Conduct Clause by Monopolists Not an Anticompetitive Practice Under Section 2 of the Sherman Act

Introduction

This commentary examines the Fourth Circuit’s decision in 2311 Racing LLC v. National Association for Stock Car Auto Racing, 24-2245 (4th Cir. June 5, 2025). 2311 Racing LLC (d/b/a 23XI Racing) and Front Row Motorsports, Inc. challenged NASCAR’s requirement that chartered teams sign a mutual release of past claims—including antitrust claims—as a condition to participate in the NASCAR Cup Series under the new 2025 Charter Agreement. The district court granted a mandatory preliminary injunction to allow the plaintiffs to race without signing the release. On appeal, the Fourth Circuit vacated the injunction, holding that conditioning access to a monopolized market on a release of prior claims does not, without more, constitute anticompetitive conduct under Section 2 of the Sherman Act.

Summary of the Judgment

The district court had preliminarily enjoined NASCAR and its CEO from enforcing the release clause in the 2025 Charter Agreement against the plaintiffs, finding the release itself to be anticompetitive conduct by a monopolist likely to succeed under Section 2.
On interlocutory appeal, the Fourth Circuit applied its “exacting” review of a mandatory preliminary injunction, which must be supported by an “indisputably clear” showing that the plaintiff will succeed on the merits.
The court concluded that no precedent supports the notion that a release of past claims—mutual or otherwise—constitutes anticompetitive conduct or maintenance of monopoly power under Section 2. Such releases eliminate multiple potential lawsuits between contracting parties but do not injure competition itself.
Because the plaintiffs failed to demonstrate that conditioning entry on a release of past claims is anticompetitive, they could not satisfy the “likelihood of success” prong. The Fourth Circuit therefore vacated the preliminary injunction.
The court expressly declined to address the merits of the broader antitrust challenge to NASCAR’s business model, limiting its ruling to the release‐clause theory.

Analysis

1. Precedents Cited

Grinnell Corp. v. United States, 384 U.S. 563, 570–71 (1966): Defines the two elements of a Section 2 monopolization claim—possession of monopoly power and willful acquisition or maintenance through anticompetitive conduct.
Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 605 (1985): Explains “anticompetitive conduct” as exclusion of rivals on grounds other than efficiency.
Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438, 448 (2009): Affirms freedom of contracting parties to set prices, terms, and conditions of dealing.
Va. Impression Prods. Co. v. SCM Corp., 448 F.2d 262, 266 (4th Cir. 1971): Holds that antitrust statutes do not prohibit a general release of claims between business parties.
Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22 (2008): Requires a “clear showing” of likelihood of success before granting a preliminary injunction.
In re Microsoft Corp. Antitrust Litig., 333 F.3d 517, 525 (4th Cir. 2003): Establishes heightened scrutiny for mandatory injunctions, demanding an “indisputably clear” showing.

2. Legal Reasoning

The Fourth Circuit’s opinion, authored by Judge Niemeyer, proceeds in three principal steps:

Standard of Review. The court emphasized that a mandatory preliminary injunction—which compels the defendant to take positive action—requires an “exacting” review and “indisputably clear” evidence that the movant will prevail on the merits.
Character of the Release. The release clause in the 2025 Charter Agreement is mutual, covering any claim “arising out of or relating to” prior conduct, including antitrust claims. The court noted that such mutual releases are commonplace in commercial contracts.
Antitrust Analysis. Under Section 2, a monopolist’s anticompetitive conduct must aim to exclude competition rather than simply limit legal claims between two contracting parties. Requiring a release of past claims does not foreclose rivals or raise barriers to entry, nor does it injure the competitive process itself. The court found no authority treating a release of past conduct as anticompetitive “conduct” in the statutory sense.

3. Impact

This decision clarifies that:

A monopolist’s insistence on a broad mutual release of disputes as a condition of entering or renewing a commercial relationship does not, by itself, violate Section 2.
To obtain preliminary relief against a monopolist, plaintiffs must identify specific conduct that harms competition, not merely the ability to sue the monopolist for prior wrongdoing.
Future challenges to business models relying on release or waiver clauses must focus on whether those clauses foreclose competitive alternatives or maintain monopoly power by excluding rivals on non‐efficiency grounds.

Complex Concepts Simplified

Section 2 Monopolization: An antitrust claim under Section 2 requires (1) monopoly power in a defined market, and (2) willful acquisition or maintenance of that power through actions that harm competition.
Mandatory vs. Prohibitory Injunction: A mandatory injunction orders a party to do something (e.g., allow entrants to race). It is disfavored and requires a stronger showing of likely success than a prohibitory injunction, which merely bars conduct.
Mutual Release Clause: A contract provision whereby each party agrees to waive all claims—legal or equitable—related to past dealings. Such releases streamline commercial relationships by avoiding multiple lawsuits.
Anticompetitive Conduct: Conduct that harms the competitive process itself (e.g., tying, price fixing, refusal to deal for anticompetitive reasons), not merely contracts limiting litigation between the parties.

Conclusion

The Fourth Circuit’s decision in 2311 Racing LLC v. NASCAR establishes that a monopolist’s insistence on a release of past claims as a condition of participating in a market does not amount to anticompetitive conduct under Section 2 of the Sherman Act. By vacating the district court’s mandatory preliminary injunction, the appellate court reaffirmed the principle that contracting parties are free to set the terms of their relationship, including mutual releases, so long as those provisions do not themselves erect barriers to competition or exclude rivals on non-efficiency grounds. This ruling narrows the scope of antitrust challenges to release or waiver clauses and underscores the heightened burden plaintiffs face when seeking early injunctive relief against monopolists.