# DJI legal challenge to Pentagon designation > Live situation record from CLSTR: https://clstr.news/situations/dji-legal-challenge-to-pentagon-designation > Updated: 2026-08-18T16:52:53.000Z. Sources: 8. Developments: 2. DJI, the world’s largest drone manufacturer, has been engaged in legal challenges against its designation by the U.S. Department of Defense as a ‘Chinese military company’ under Section 1260H. The company argues the designation is “unlawful and misguided,” asserting it is “neither owned nor controlled by the Chinese military.” A U.S. appeals court has partially reversed a lower court ruling regarding this challenge. While the court rejected several of DJI’s arguments, including those concerning due process, it ruled that the district court erred by relying solely on unclassified records to determine if DJI “contributes” to China’s defense industrial base. The case has been sent back to the district court, which is now permitted to examine classified records to determine whether to uphold the Secretary of Defense’s designation. Despite the legal proceedings, DJI remains on the Pentagon’s list and continues to face U.S. market restrictions. ## Timeline ### 2026-08-18: D.C. Circuit partially reverses DJI challenge to Pentagon designation The D.C. Circuit partially reversed a ruling in DJI’s challenge to its Department of Defense designation, sending the issue of its contribution to the Chinese defense industrial base back to district court. 2 sources. https://clstr.news/cluster/dc-circuit-partially-reverses-dji-challenge-to-pentagon-designation ### 2026-08-14: DJI appeals Pentagon designation as Chinese military company A U.S. appeals court has ordered a reconsideration of DJI’s placement on a Pentagon list of Chinese military companies, citing the need to examine classified evidence regarding its ties to China’s defense base. 6 sources. https://clstr.news/cluster/dji-appeals-pentagon-designation-as-chinese-military-company --- Cite as: DJI legal challenge to Pentagon designation. CLSTR, https://clstr.news/situations/dji-legal-challenge-to-pentagon-designation