NASCAR wins in battle to kick ATT out NASCAR won a major court decision Monday as the U.S. 11th Circuit Court of Appeals overruled a temporary injunction issued by a district court judge that had allowed AT&T logos to be placed on the No. 31 Richard Childress Racing car under NASCAR's grandfather clause for telecommunication sponsors.
"Because Cingular [now AT&T Mobility] was neither a party to nor an intended beneficiary of the [grandfather clause], it has not itself suffered a legally cognizable injury as a result of NASCAR's interpretation," the three-judge panel wrote in its unanimous decision to overturn the May 18 decision of U.S. District Court Judge Marvin Shoob.
The decision by the Atlanta-based court could result in removal of the AT&T logos from the No. 31 Chevrolet driven by Jeff Burton as soon as the Aug. 17-19 race weekend at Michigan International Speedway. AT&T still has the option of asking the court to reconsider.
"Obviously we're pleased," NASCAR spokesman Ramsey Poston said. "This is good news for every driver and team in the sport, which benefits from our exclusive relationships.
"As we've always said, there are three key sponsors that benefit everyone in the industry - the tire manufacturer, the fuel supplier and the [series] title sponsors. This decision confirms those relationships."
NASCAR, citing its exclusivity agreement with Sprint Nextel for the sponsorship of its premier series, had barred AT&T from using its logos to replace Cingular on the RCR car.
AT&T and Cingular merged in December 2006. AT&T went to court, arguing that NASCAR's grandfather clause (which went into effect in 2004 when Nextel signed a 10-year deal to replace Winston as the Cup Series sponsor) in its annual contract with RCR did not preclude the change in logos.
The appeals court ruled that NASCAR did not intend for AT&T Mobility to benefit, and therefore couldn't be a third-party beneficiary to the NASCAR-RCR agreement, which included the grandfather clause in an addendum.
Because RCR was not required to renew its relationships with Cingular, AT&T did not have a legal right for its logos to be put on the car, the court ruled.
"The Addendum to the RCR Agreement was intended to protect RCR from the potential harm caused by a sudden loss of sponsorship due to Sprint Nextel's exclusivity," the three-judge panel wrote. "Any benefit to Cingular (now AT&T Mobility) resulting from NASCAR's commitment to grant RCR the option to continue and renew its sponsorship agreement was merely incidental to NASCAR's intended purpose of preserving RCR's choice of sponsorship."
The decision likely ends the injunction phase of the case. The case, which includes a $100 million countersuit by NASCAR against AT&T, still is scheduled to go to trial. Scenedaily.com