Case Summary:

In SZ DJI Technology Co., Ltd. v. DOD (Docket No. 25-5367), argued before the U.S. Court of Appeals for the D.C. Circuit on February 6, 2026, the case involves a high-profile challenge to the Department of Defense's designation of the world's largest drone manufacturer as a "Chinese military company."

The factual record centers on the Pentagon's decision to place DJI on the "Section 1260H List," a designation that identifies entities allegedly supporting the Chinese military and blocks them from securing federal contracts. In the underlying proceedings, the district court issued a split factual finding, rejecting the DOD's claims that DJI was owned or controlled by the Chinese Communist Party but ultimately upholding the "military company" label based on DJI's status as a "National Enterprise Technology Center" in China and the "substantial dual-use applications" of its drone technology in modern warfare. On appeal, the primary factual dispute is whether these general industrial designations and the potential for third-party military misuse constitute sufficient evidence of a "military-civil fusion" connection under the Administrative Procedure Act, or if the DOD's listing was an arbitrary and capricious decision that ignored DJI's internal policies prohibiting combat use.