DJI Loses Its Lawsuit Against the Pentagon, Remains Designated a Chinese Military Company in US
A United States judge rejected DJI’s request to be removed from the U.S. Department of Defense (DoD) list of Chinese military and military-associated companies. This means, pending an appeal, the U.S. government can continue to call DJI a Chinese Military Company, a ruling that comes with significant risks to DJI’s business operations.
Update 9/26: DJI has provided a statement concerning the ruling. It has been added to the end of this article.
On the Department of Defense’s list of “entities identified as Chinese Military Companies,” last updated in January, DJI is listed as Shenzen DJI Innovation Technology Co., Ltd. (DJI). Following today’s ruling by U.S. District Court Judge Paul Friedman, DJI will remain on the list, despite the company’s insistence that it is “neither owned or controlled by the Chinese military.”
In his 49-page ruling, Judge Friedman concludes that while the DoD’s evidence to support its designation of DJI as a Chinese Military Company is not bulletproof, the Court nonetheless should “give significant deference to the DoD’s finding because it relates to national security, and because evidence of DJI’s ownership is difficult to discern.”
Ultimately, the judge determined that the Department of Defense has wide-ranging discretion to “determine which entities” to place on its list. While the judge reaches slightly different conclusions than the DoD regarding DJI’s ownership and its connection to the Chinese government and military, he agrees with the DoD that it has broad overreach in maintaining its list.
He does agree with the DoD that there is sufficient evidence that DJI may be a “military-civil fusion contributor,” however, which is a good enough justification for the DoD to put the company on its designated list.
Furthermore, there is evidence to support the claim that DJI is, at least in part, supported by the Chinese government through direct monetary support and other forms of special financial assistance. This is enough reason for the DoD to label DJI however it sees fit, the judge writes.
DJI would be well within its rights to appeal Judge Friedman’s decision, although given the far-reaching authority he attributes to the Department of Defense, DJI’s legal hill may be a tough one to climb.
DJI argues that its designation by the Pentagon has cost the company business deals, harmed its public image, and led to its products being banned within various federal government agencies in the U.S.
This is in addition to DJI’s other ongoing issues in the United States. DJI has urged the government to conduct its mandated security audit of the company, then lawmakers tried to rush the audit, and the company’s retail presence in the U.S. is downright weird. DJI has faced significant challenges in the United States lately, particularly in its relationship with the American government, and the situation shows no signs of improvement.
Following publication, a DJI spokesperson provided PetaPixel the following statement:
“While DJI is pleased that the Court agreed with DJI and rejected most of DoD’s purported justifications for listing DJI, we are disappointed that the Court nonetheless upheld the listing. This decision was based on a single rationale that applies to many companies that have never been listed. DJI is currently evaluating its legal options in light of this decision.
“DJI’s success is built on relentless innovation, and the market continues to choose our products for their reliability, safety, and accessibility. We remain committed to serving our U.S. customers and partners, and we call for fair competition in the United States. This is the approach that truly benefits the economy, the industry, and, most importantly, the operators who use our technologies to strengthen businesses and enhance public safety in communities across the country.”
Image credits: DJI
