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Palou attorneys move to bring Ganassi case to federal court, may seek counterclaim for defamation

INDIANAPOLIS (WISH) — The battle over Alex Palou’s contract may soon move to the federal courthouse.

Attorneys for the reigning IndyCar champ have filed to have the case against Chip Ganassi Racing moved from a Marion County superior court to the U.S. District Court for the Southern District of Indiana.

According to court documents, Palou’s attorneys argue that there is “diversity of citizenship” in the case as Palou is a citizen of Spain, his co-defendant ALPA Racing SL is a Spanish company, and Chip Ganassi is a resident of Pennsylvania.

Filings also state that the dollar amount being argued over exceeds $75,000, which attorneys say exceeds the jurisdictional threshold.

“Plaintiff brings, among other claims, clams for breach of contract and seeks as remedies injunctive relief and specific performance, seeking to force Alex Palou to drive for Chip Ganassi Racing, LLC in the 2023 IndyCar Season. Here, at a minimum, the contracts that Plaintiff purport to seek to enforce are worth in excess of the jurisdictional threshold of $75,000,” Palou’s attorneys claim. “Further, the amount at stake for Plaintiff is at least the value of Alex Palou’s driving efforts in 2023 and Defendants’ pecuniary stake in complying with Plaintiff’s requested relief is, at least, the difference in value between Alex Palou’s potential contract payments from Ganassi for 2023 and potential contract payments earned by racing for different racing team for the 2023 season and beyond. These amounts exceed $75,000.”

Court filings acquired by News 8 also show that Palou’s attorneys intend to file a counterclaim for defamation.

“Defendants currently anticipate asserting non-contractual counterclaims, including at least for defamation,” court documents state. “The damages Defendants will seek on these counterclaims will exceed $75,000.”

The notice for removal from a Marion County superior court was filed on July 29.

On Sunday, attorneys for Chip Ganassi Racing filed for a preliminary injunction. Ganassi’s legal team includes notable Indianapolis attorney James Voyles.

“Ganassi brings claims for breach of contract and breach of duty of loyalty / fiduciary duty and seeks preliminary injunctive relief to remedy irreparable harm,” Ganassi attorneys argue.

Ganassi attorneys want a hearing on preliminary injunction by Aug. 30.

Controversy over Palou’s contract exploded on July 12. Hours after Chip Ganassi Racing issued a press release announcing it had picked up an option for Palou to drive for the team in 2023, Palou denied the announcement and said he would be joining McLaren Racing. McLaren racing has teams in series including IndyCar, Formula One and Formula E. The team has not said which series they intend to place Palou in for 2023.

In a statement released to News 8 on July 28, one of Palou’s attorneys revealed Formula One aspirations for the IndyCar champ.

“We are disappointed that Chip Ganassi Racing would attempt to keep Alex from an opportunity to compete in Formula One, and even more so with CGR’s public court filings and continued commentary to the press on this matter. Alex has consistently given his very best effort to CGR and it is unfortunate that CGR would attempt to deny Alex this opportunity. We would hope the parties can resolve this amicably, but if not, we look forward to resolving this matter in a private arbitration, as CGR has requested.”

Rachel E. Epstein, partner, Quinn Emanuel Urquhart & Sullivan, LLP

Ganassi filed suit against Palou on July 25. In the lead-up to the Gallagher Grand Prix at Indianapolis Motor Speedway, Palou said he had not spoken directly to Ganassi since the contract battle began.

Palou finished 10th in the Gallagher Grand Prix and is currently sixth in the IndyCar standings.