Palou/Ganassi lawsuit enters next phase

Joe Skibinski/Penske Entertainment

Palou/Ganassi lawsuit enters next phase

IndyCar

Palou/Ganassi lawsuit enters next phase

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Alex Palou and his Chip Ganassi Racing car were plenty fast on Sunday as the No. 10 Honda raced to third place at the Nashville Grand Prix IndyCar event.

The driver and team owner even embraced after the win and spoke together briefly for the first time since Ganassi sued Palou and his business ALPA Racing two weeks ago. But the olive branch was a temporary indulgence as new motions were filed on Monday, with competing requests to expedite and slow the legal proceedings.

Palou’s lawyers have filed a motion with the federal court in Indianapolis asking to stretch the process over the next 2.5 months — once the season ends on September 11 as not to distract their client – starting with:

1. Motion to Dismiss: Wed., Sept. 14
2. Discovery Requests Served: Mon., Sept. 19
3. Responses to Discovery Requests: Mon., Sept. 26
4. Substantial Completion of Document Production: Tues., Oct. 4
5. Completion of Fact Deposition (& Fact Discovery Closes): Tues., Oct. 11
6. Expert Reports: Fri., Oct. 14
7. Rebuttal Expert Reports: Fri., Oct. 19
8. Completion of Expert Depositions: Fri., Oct. 21
9. Plaintiff’s Updated PI Brief: Mon., Oct. 24
10. Defendants’ PI Opposition: Fri., Oct. 28
11. PI Hearing: Week of Oct. 31

On the other side, Ganassi’s lawyers are seeking to accelerate the lawsuit through its filings of a Motion For Prompt Status and Scheduling Conference, Request For Prompt Hearing On Preliminary Injunction, and Motion For Expedited Discovery. Magistrate Judge Debra McVicker Lynch of the United States Southern District of Indiana has set a new date of August 11 for a status call with both parties.

But all of that could be preempted by a line in a new filing on Tuesday from Palou’s camp that revealed, “Defendants note that the parties have an all-day mediation scheduled for August 10, 2022.”

This is scheduled for a face-to-face meeting between both sides in Indianapolis that could, if both parties so choose, end in a resolution that halts the case and leads to whatever outcome is agreed upon. It could also lead nowhere and see the case play out in the weeks and months ahead, depending on what timeline the judge prefers to ratify.

The only question of importance is what Ganassi wants to get out of mediation. Coming off his third-place run, Palou’s closed from 53 points out of the championship lead prior to Nashville to 33 points shy of leader Will Power. At the same time, Palou is ranked third among the Ganassi drivers in the standings, with Nashville winner Scott Dixon holding a close second (six points behind) and Marcus Ericsson in third (12 points adrift).

Would Ganassi agree to sever ties with Palou, effective immediately, while he is in the mix for earning a second consecutive championship? It wouldn’t make sense from a competitive standpoint, but who knows what might be offered from McLaren/Palou to let him go. If a release were granted, parting ways at the end of the season would be the most logical path, but at the same time, and with their active dislike for each other, how important might it be for Ganassi to deny McLaren Racing CEO Zak Brown access to Palou?

Brown has gone on the record with NBC Sports to state McLaren would not pay Ganassi to gain control of Palou’s contract/future, but would he go back on that statement if the price was right? There’s dozens of possibilities that could come from mediation, and with the amount of revelations that have been produced in the last month from the IndyCar paddock, there’s no reason to believe anything normal will emerge on Wednesday. A request by Palou’s lawyers asks for the meditation to use Thursday, Aug. 11 as a fallback date if any travel issues arise.

Where the mediation, which Palou’s side says comes at the request of Ganassi’s lawyers, takes a few more interesting turns is in Ganassi’s preference to push the timeline to resolve the contractual dispute to a resolution as quickly as possible. Absolutely no one believes Ganassi intends to continue racing with Palou in 2023, which could be one motivating factor for expediency.

It’s highly unlikely that Palou will remain in the No.10 next year, but he and Ganassi might have to follow a winding path towards their eventual split. Gavin Baker/Motorsport Images

“As explained below, Plaintiff’s expressed need for urgency is in direct contrast with Plaintiff’s several-month delay in filing this matter, Plaintiff’s actions since filing this matter, and Plaintiff’s own pleadings indicating that this matter involves the 2023 IndyCar season,” Palou’s lawyers wrote in their Tuesday filing.

“Further, while Defendants do not oppose an expedited schedule, Defendants have counter-proposed to Plaintiff a schedule that will allow for the necessary discovery, avoid distracting Mr. Palou in the midst of the current racing season, and still provide for a prompt hearing well in advance of 2023.”

The longer the case plays out, the fewer top-tier drivers Ganassi will have left to pursue. If there’s no desire to keep Palou in the No. 10, solving the question of who will drive the car would be all-important in order to keep or sign new sponsors. Being embroiled in a lingering dispute with Palou into November or December has no obvious upside for the team.

If the case isn’t resolved quickly and Ganassi ends up winning the rights to Palou’s services, it’s unknown how the team would move forward with a driver who has made it clear he does not want to drive for Ganassi and cannot be forced to do so. Would Ganassi make the No. 10 car available for Palou, per his contract, and wait to see if he leaves for Spain, which has been listed as a motivating factor to exit Ganassi, and abandon the car?

And would Ganassi then place someone like reserve driver Ryan Hunter-Reay in the car next season? Or for the next round on August 20 at World Wide Technologies Raceway if Palou gets his release through mediation? With this case, nothing seems impossible.

One last item stood out from Tuesday’s submission by Palou’s lawyers, and it’s the line “Plaintiff’s several-month delay in filing this matter.”

It’s worth a fast run-through of the lawsuit’s timeline to understand its potential meaning. The first filing from Ganassi’s lawyers was made on July 25, 2022. In the Tuesday filing, more dates of interest were revealed, including:

* Plaintiff has known since at least June 15, 2022 that Mr. Palou wished to race for another team that would provide him the ability to pursue a Formula 1 opportunity (and the return to Europe that would accompany such opportunity) after the 2022 IndyCar Season, and the parties discussed the possibility of Plaintiff reverting with a revised contract proposal that would include an exit clause for same.

* On July 7, 2022, having not received any revised proposal or other communication from Plaintiff on the matter, Mr. Palou informed Plaintiff in writing that, having further considered the matter in the interim, he did not intend to drive for Plaintiff after the 2022 IndyCar season. Mr. Palou further informed Plaintiff that he was providing early notice of his decision in order to allow Plaintiff time to find a replacement driver for 2023.

* On July 12, 2022, one day after Plaintiff purported to exercise an option to force Mr. Palou to drive for Plaintiff for the 2023 IndyCar season, Defendants’ counsel wrote to Plaintiff reiterating Mr. Palou’s intent not to drive for Plaintiff. Defendants’ counsel further informed Plaintiff that Defendants did not approve any press release suggesting otherwise, or any proposed quote from Mr. Palou regarding the matter.

Where things don’t add up, but might shed some light on a rumor, is the statement “Plaintiff’s several-month delay in filing this matter” where Palou’s lawyers define alerting Ganassi of his desire to leave on June 15 and then cite the lawsuit as being filed by Ganassi’s lawyers a little over one month later. Not several months, but one month and 10 days later, to be exact.

Rumors have circulated that Palou was looking to leave Ganassi months ago and that he might have signed with McLaren in April or May which, if this was made known to Ganassi, would align with the allegations of Ganassi waiting several months to pursue a legal recourse with Palou. If the citation of a ‘several-month delay in filing’ is unrelated to when Palou signed with McLaren, it’s unclear what it’s in reference to.

The bullet points also highlight a testy sequence where Palou’s lawyers claim to have formally notified of their client’s desire to leave at the end of the 2022 season but stopped short of saying whether that notification triggered an exit clause in his contract. The Ganassi team responded five days later by exercising its option in order to keep Palou for 2023. From there, the matter soon became the responsibility of lawyers and judges to rectify.

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