ATLANTA -- A ruling by a federal appeals court cleared the way for NASCAR to prevent AT&T Inc. from featuring its logo on Jeff Burton's No. 31 Richard Childress Racing Chevrolet.
The 11th U.S. Circuit Court of Appeals said Monday in its order that San Antonio-based AT&T lacks standing to challenge NASCAR's decision.
The court, therefore, threw out a lower court's ruling that prevented NASCAR from stopping AT&T's plans. The appeals court remanded the case to the U.S. District Court in Atlanta for dismissal.
At issue is AT&T's desire to change the Cingular logo on Burton's car to the AT&T logo. AT&T bought Atlanta-based BellSouth Corp. last year, gaining full control of Cingular and has since rebranded the cell phone provider under the AT&T name.
NASCAR has tried to prevent the Cingular logo from being changed to the AT&T logo on Burton's car because AT&T rival Sprint Nextel Corp. sponsors NASCAR's premier series, the Nextel Cup, and has exclusive rights as the telecommunications company for the series.
Attorneys for NASCAR and Sprint Nextel have argued the only exceptions are companies, including Cingular, that already sponsored cars when Nextel reached its agreement with NASCAR.
"Because Cingular 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.
Cingular's parent has argued that its rights included changing its brand name to AT&T.
In May, Shoob issued a preliminary injunction barring NASCAR and any entity affiliated with it from interfering with AT&T's rights as primary sponsor of the Burton car in NASCAR Cup Series races.
In his ruling regarding Burton's car, Shoob said, "The court concludes that the continued appearance of the Cingular brand on the No. 31 car, unaccompanied by any indication that Cingular now does business as AT&T, is likely to confuse NASCAR fans."
Shoob also concluded that AT&T has shown it will suffer irreparable harm in the form of loss of goodwill and loss of exclusive rights to renew its sponsorship agreement unless the court issues the injunction.
But the federal appeals court lifted the injunction Monday, saying in part that under Georgia law AT&T was not a third-party beneficiary of an agreement between NASCAR and Richard Childress racing and, as a result, it lacks standing to challenge NASCAR's interpretation of that agreement.
The case, which includes a $100 million countersuit by NASCAR against AT&T, is still scheduled to go to trial.
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