21SEP

Pentagon files secret brief against DJI

3 min read

15:34UTC

The Department of Defense submitted classified evidence to Congress opposing DJI's petition to be removed from the FCC Covered List, creating a legal barrier DJI cannot see or challenge.

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Key takeaway

Three independent regulatory layers now foreclose DJI from the US drone market.

The Department of Defense filed a memo on 3 April opposing DJI's petition to the Ninth Circuit (Case 26-1029) for removal from the FCC Covered List. The filing includes a classified intelligence annex submitted to Congress the same day. DJI's reply is due 11 May.

Classified annexes create an asymmetric legal environment where the plaintiff cannot examine the evidence against it. US courts have historically deferred to executive branch national security claims under these conditions. DJI retained a former Solicitor General, but the procedural disadvantage is structural: no amount of legal talent compensates for the inability to see or contest the opposing brief.

This classified opposition completes a three-layer regulatory lock. FAR clause 52.240-1 bars Chinese drones from all federal contracts. The FCC Covered List blocks new product certifications. The DoD annex now effectively neutralises the one judicial mechanism DJI had to contest both. Each layer requires a separate legal or political victory to overturn; together, they foreclose DJI's path to the US market regardless of the Section 232 tariff outcome, which itself remains unresolved 16 days past its statutory deadline.

For the broader US drone market, DJI's exclusion is now functionally permanent. Hundreds of thousands of existing DJI aircraft continue to fly under prior authorisations, but no new models can enter. Domestic manufacturers like Skydio inherit a protected market, though the capability gap with DJI hardware remains real and will take years to close.

Deep Analysis

In plain English

DJI is the world's most popular drone brand, but it has been banned from the US market because the government considers it a Chinese security risk. DJI went to court to try to get that ban overturned. The US military then filed secret evidence with Congress saying DJI is a threat. Because the evidence is secret, DJI's lawyers cannot read it, let alone challenge it. It is like being told you failed a test but not being allowed to see the test paper. US courts have almost always sided with the government when national security secrecy is involved. DJI is likely to lose, which means no new DJI drones in the US market, probably permanently.

Deep Analysis

Root Causes

DJI's three-layer exclusion is the product of three separate institutional actors acting independently: the FCC (administrative), the DoD (legislative via classified annex), and the FAR rulemakers (procurement). No single political decision created the lock; removing it would require simultaneously reversing three independent institutional determinations, each with its own legal standard and political constituency.

The classified annex is structurally different from the other two layers. The FCC Covered List and FAR clause 52.240-1 can in principle be reversed by the administrations that created them. A classified intelligence annex, once submitted to Congress, creates a permanent record that future administrations inherit. DJI's challenge is not merely legal; it is permanent in a way the other restrictions are not.

What could happen next?

Precedent
The DoD's use of a classified annex to neutralise DJI's judicial challenge creates a template for excluding any foreign technology company from US markets without requiring a conviction or an open evidentiary hearing.
Long term · 0.82
Opportunity
DJI's permanent exclusion creates a protected US market for domestic manufacturers; Skydio and Red Cat are the primary beneficiaries of a gap that will take three to five years to close on capability.
Medium term · 0.85
Risk
European regulators have not imposed equivalent restrictions on DJI; a divergent transatlantic standard creates compliance complexity for multinational operators and may drive EU customers toward Chinese hardware while US customers shift to domestic alternatives.
Medium term · 0.74

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: The Huawei FCCban litigation (2020-2023) offers the most direct precedent. Huawei challenged its FCC designation on Fifth Amendment due process grounds, arguing it could not contest evidence it had not seen. The DC Circuit upheld the FCC designation, finding that national security deference applied and that the record evidence (even without the classified annex) was sufficient to support the determination. DJI's Ninth Circuit case is legally identical in structure.

Counter-parallel: The contrast case is ZTE, which was removed from an entity list in 2018 after a negotiated settlement involving a $1.4 billion penalty and compliance monitors. ZTE's path was commercial negotiation, not litigation.

The difference is that ZTE did not face a classified intelligence annex in its judicial challenge; DJI's lawyers had the Huawei precedent before filing, which suggests they assessed the litigation path as viable despite that precedent. Either they have a procedural theory that distinguishes the Ninth Circuit filing from the DC Circuit outcome, or the litigation is a delaying tactic.

Consensus view: The Cato Institute and First Amendment scholars broadly agree that using classified annexes to contest a company's petition before an Article III court creates a due process problem the courts have historically papered over by deferring to executive national security claims. The pattern is well-established in FISA and export control cases; DJI's situation is structurally identical.

Counter-view: The Heritage Foundation and IISS analysts focused on supply chain security argue that the classified annex is not procedurally unusual in national security cases, and that DJI's lawyers can petition for a security clearance to review the annex in a classified setting.

The defence industry framing is that the US government has an obligation not to detail intelligence sources in open filings, and that this procedural inconvenience is a consequence of DJI's decision to seek judicial review of a national security determination.

Key tension: Whether a federal court will demand that DJI be given access to cleared versions of the classified evidence, or whether it will grant summary judgment for the government under national security deference doctrine, will determine whether judicial review of FCC Covered List decisions has any practical meaning.

Sources:DroneDJ

Mentions:DJI →Federal Communications Commission →FAR 52.240-1 →Skydio →Heritage Foundation →IISS →Pentagon →Section 232 UAS Investigation →FCC Covered List →Federal Acquisition Regulation →Cato Institute →

First Reported In

Update #5 · Gulf drone war rewrites procurement

DroneDJ· 13 Apr 2026

Read original →

Causes and effects

Caused by

FCC adds Chinese drones to banned list

FCC Covered List addition is the first regulatory layer; the DoD classified opposition is the third layer added to an existing regulatory stack.

Occurred 21 Dec 2025

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Chinese drones banned from US contracts

FAR clause 52.240-1 is the second regulatory layer; DoD classified opposition completes a three-part lock against DJI.

Occurred 13 Mar 2026

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This Event

Pentagon files secret brief against DJI

major

Led to

DJI puts $1.56bn on Ninth Circuit record

DoD's classified annex opposing DJI's FCC petition on 3 April deepened the regulatory exclusion that DJI's Ninth Circuit brief now quantifies at $1.56B.

Occurred 22 Apr 2026

Read story →

Autel takes FCC to court over secret evidence

DoD's classified annex against DJI's FCC petition established the regulatory framework Autel is now challenging with the same Fifth Amendment argument.

Occurred 19 May 2026

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Different Perspectives

Office for Budget Responsibility

The OBR's 28 October forecast assumed $82 oil for 2026 and 2027, from market prices for the ten working days to 19 August, and blamed dearer wholesale energy on the war without naming Iran. It expects CPI inflation close to 4% in early 2027 even at that price.

Hengaw, Kurdish rights group

Hengaw reported the 3 November hangings of Amirhossein Maleki and Amirhossein Ebrahimi in Isfahan, saying Ebrahimi was tortured into confessing and that nine of 12 people sentenced to death in the case have now been hanged. Iran's judiciary holds that the defendants killed members of the security forces.

FINTRAC, Canada's financial intelligence unit

FINTRAC worked with the US Treasury on the 6 November designation of eight money services businesses in British Columbia, Ontario and Quebec. Treasury says the businesses still operate, some under new names, so closing them falls to Ottawa.

Abdul Qadir al-Dakhil, Governor of Nineveh

Al-Dakhil cancelled three Mosul International Airport contracts on 7 November over alleged links to armed groups, after meeting Prime Minister Ali al-Zaidi in Baghdad. He named no group or company, and said the contracts will go to international companies.

Kuwait

Kuwait condemned the Houthi missile fired towards the Madinah region on 5 November and restated its support for Saudi Arabia, the Qatar News Agency reported. Its state tanker company, Kuwait Oil Tankers Company, is among the Gulf state fleets on Iran's expanded Hormuz list.

Scott Bessent, US Treasury Secretary

Treasury designated an alleged Chandigarh false-flag network on 4 November and eight Canadian exchangers on 6 November, while State sanctioned alleged MANPADS intermediaries. None of the actions touches an oil buyer; they target the paper, cash and procurement around Iran's trade.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.