Federal Appeals Court Gives DJI Hope in Pentagon Blacklist Challenge

A recent federal appeals court decision has given DJI, the world’s largest drone manufacturer, a glimmer of hope in its ongoing legal battle against the US Pentagon’s blacklist designation. The ruling, issued on August 14, found a critical flaw in the government’s case, forcing a lower court to revisit the decision. Although DJI remains blacklisted for now, the appeals court’s decision represents the strongest judicial challenge yet to the Pentagon’s justification for keeping the company on its list of alleged Chinese military-linked entities.

## The Appeals Court Ruling

The US Court of Appeals for the District of Columbia Circuit partially reversed an earlier decision that had sided with the Department of Defense in DJI’s lawsuit. The appeals court did not remove DJI from the blacklist but ruled that the lower court had erred by upholding a key part of the Pentagon’s reasoning without properly examining the evidence. The case has been sent back to the district court for further review, marking a procedural victory for DJI.

The three-judge panel rejected three of DJI’s four arguments, agreeing with the lower court that the company was not denied due process, that the Pentagon had sufficient grounds to conclude DJI received Chinese government assistance, and that the Defense Department did not improperly single out DJI compared to similar companies. However, the judges disagreed on whether DJI contributes to China’s defense industrial base, a critical point in the case.

## The Key Issue: Lack of Public Evidence

The appeals court highlighted a significant issue: the Pentagon’s report included a section titled “DJI Contributes to the Chinese Defense Industrial Base,” but the entire section was redacted in the public version. Judge Bradley Garcia wrote in the opinion that the lower court could not accept the government’s conclusion without reviewing the actual reasoning behind it. The appeals court emphasized that government lawyers could not later fill in the gaps with their own explanations, and the lower court must now evaluate the Pentagon’s reasoning, including reviewing classified evidence if necessary.

## DJI’s Response and the Broader Impact

DJI welcomed the ruling, calling it an important step toward overturning what it has long described as an unjust designation. A DJI spokesperson stated that the company is a privately held civilian technology firm, not a military business, and has consistently opposed the use of its drones in combat. The spokesperson added that DJI remains committed to the responsible development of civilian technologies and looks forward to continuing its legal fight.

The blacklist designation, first imposed in 2022, does not prevent Americans from buying DJI drones. Popular models like the DJI Mini 5 Pro, Air 3S, Flip, and Mavic 4 Pro remain widely available in the US. However, the designation restricts the federal government’s ability to do business with DJI, including prohibiting direct contracts and broader procurement restrictions scheduled to take effect in 2027. DJI has argued that the designation has caused significant commercial damage, including lost business opportunities and exclusion from federal contracts.

## The Road Ahead

The case now returns to the district court, where the judge will reconsider the issue identified by the appeals court. This time, the court may examine classified evidence that was not part of the public record in the earlier decision. The review could either uphold the Pentagon’s position or require the government to better justify its designation. DJI’s legal battle is far from over, but the latest ruling provides the company with a renewed opportunity to challenge the US government’s actions against it.