DJI Gets a Partial Win in Pentagon Blacklist Appeal—But Remains Listed

The U.S. Court of Appeals for the District of Columbia Circuit gave Chinese drone maker DJI a partial procedural victory on August 14, 2026. The court did not remove DJI from the Pentagon’s Section 1260H list of companies identified as “Chinese military companies.” Instead, it reversed part of the lower court’s ruling and sent the case back for further proceedings.

That distinction matters: DJI won another opportunity to challenge the designation, but it did not win a final ruling clearing it of the Pentagon’s classification.

Why the appeals court ordered a reconsideration

The central issue was how the lower court reviewed the Pentagon’s justification for listing DJI. The Pentagon asserted that DJI contributes to China’s defense-industrial base. The appeals court held that the district court should not have accepted that assertion without examining the classified material supporting it.

The lower court must now reconsider the designation using the full administrative record, including classified evidence submitted to the judge ex parte and in camera. In practical terms, the remand requires a more complete judicial review of the government’s underlying case rather than relying only on the unclassified record.

The D.C. Circuit otherwise affirmed parts of the lower court’s judgment against DJI. As a result, the company’s Section 1260H designation remains in effect while the lower court conducts the further review.

What the Section 1260H listing means for DJI

Placement on the list carries concrete restrictions. A listed company cannot contract with the U.S. Department of Defense or the Department of Homeland Security. The designation also restricts access to specified Energy Department grants, contracts, and loans.

The listing can also create reputational and commercial consequences. DJI has said that its designation as a Chinese military company has cost it business deals. Earlier court materials described the listing as stigmatizing the company, in addition to limiting access to certain forms of government support.

DJI’s denial and what the ruling does—and does not—establish

DJI denies having military ties and maintains that it is a consumer and commercial-drone manufacturer. The appeals court’s decision gives the company another chance to contest the Pentagon’s conclusion, but it does not establish that DJI’s denial has been proven or that the designation was unlawful.

The immediate result is therefore procedural rather than a clean exoneration: the Pentagon’s listing survives for now, while the lower court must revisit a key part of the evidence behind it.