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FERKO v. NATIONAL ASSOCIATION OF STOCK CAR RACING

April 3, 2003

FRANCIS FERKO, AS SHAREHOLDER OF SPEEDWAY MOTORSPORTS, INC., PLAINTIFF, VS. NATIONAL ASSOCIATION OF STOCK CAR RACING, INC., INTERNATIONAL SPEEDWAY CORPORATION, AND SPEEDWAY MOTORSPORTS, INC., DEFENDANTS.


The opinion of the court was delivered by: Richard A. Schell, District Judge

ORDER DENYING OPPOSED MOTION AND BRIEF IN SUPPORT TO REALIGN DEFENDANT SPEEDWAY MOTORSPORTS, INC. AS A PLAINTIFF AND TO DISMISS PLAINTIFF FRANCIS FERKO
This matter is before the court on National Association of Stock Car Racing's ("NASCAR") "Opposed Motion and Brief In Support to Realign Defendant Speedway Motorsports, Inc. as a Plaintiff and To Dismiss Plaintiff Francis Ferko" filed on November 4, 2002 (Dkt. #62-1, #62-2), plaintiff Francis Ferko's ("Ferko") response in opposition filed on November 25, 2002 (Dkt. #69), defendant Speedway Motorsports, Inc.'s ("Speedway") response in opposition filed on November 27, 2002 (Dkt. #71), NASCAR's reply to Ferko's response filed on December 6, 2002 (Dkt. #77), NASCAR's reply to Speedway's response filed on December 6, 2002 (Dkt. #76), and Speedway's sur-reply filed on December 16, 2002 (Dkt. #80), in the above-styled and numbered cause. After careful consideration, the court is of the opinion that NASCAR's motion for realignment and dismissal should be DENIED.

Facts*fn1

This action arises out of the refusal of NASCAR to provide a second NASCAR Winston Cup race to the Texas Motor Speedway ("TMS"), a race track owned and operated by nominal defendant Speedway.

According to Plaintiff, TMS was built after assurances from NASCAR that in addition to transferring one Winston Cup race to TMS from a track in North Carolina, another Winston Cup race would also be created for TMS in the future.

As of yet, an additional Winston Cup race has not been created for TMS. Ferko, a shareholder of Speedway, demanded that the company enforce its rights and file suit against NASCAR. Speedway opted not to file suit. Consequently, Ferko brings this lawsuit as a derivative action pursuant to Federal Rule of Civil Procedure 23.1 to enforce Speedway's right to damages, specific performance, injunctive relief and other remedies for the injury to Speedway caused by NASCAR's failure to provide TMS with an additional race.

NASCAR filed the present motion to (1) realign Speedway as the true plaintiff in this action, and, as a consequence of realignment, (2) dismiss Ferko from the case as an irrelevant and unnecessary plaintiff. More specifically, NASCAR contends that:

[B]ecause [Speedway] has adopted all of Ferko's allegations and claims on its behalf against NASCAR, the Court should realign [Speedway] as a plaintiff according to its real interests in the outcome of this litigation. It is evident that (i) [Speedway] wholly supports and adopts Ferko's allegations and claims, (ii) [Speedway] is adequately equipped and financially capable of representing the corporation's interest in prosecuting its claims, (iii) no "antagonism" exists between [Speedway] and Ferko, (iv) [Speedway] has not colluded with either NASCAR or ISC to compromise this action, (v) [Speedway] has retained able counsel to represent it in this litigation, and (vi) nothing in the allegations or the nature of this action supports a presumption or determination that the Board is biased or incapable of discharging its duties to exercise its business ...

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