DJI Sues Pentagon

[mavic3usa]

A NOTICE OF DESIGNATION OF RELATED CIVIL CASES was filed with the court. It indicates that two similar cases are pending in the same DC District Court which arise from the same facts and share common issues of law:

Hesai Technology Co., Ltd. and Hesai Inc. v. U.S. Department of Defense et al., No.1:24-cv-01381;

Advanced Micro-Fabrication Equipment Inc. China et al. v. U.S. Department of Defense et al., No. 1:24-cv-02357

So, its not just DJI suing the DOD. There are at apparently least two other entities who object to their DOD listing as military companies.

CCP will alert all their companies to jump on board. You know, sort of like a class action lawsuit. Oh the irony.

 

[Meta4]

CCP will alert all their companies to jump on board. You know, sort of like a class action lawsuit. Oh the irony.

Where do you get your expertise on corporate activities in China or do you just make stuff up?

 

[mavic3usa]

Where do you get your expertise on corporate activities in China or do you just make stuff up?

How the state runs business in China

The long read: Much of modern China’s epic growth was driven by private enterprise – but under Xi Jinping, the Communist party has returned to being the ultimate authority in business as well as politics

www.theguardian.com

 

[Chip]

A few more notes:

One of the other companies which sued the DOD, Hesai Technology Co., Ltd., is involved with LIDAR research and development.

CCP will alert all their companies to jump on board. You know, sort of like a class action lawsuit. Oh the irony.

Lawfare is a real thing for sure. But, successfully challenging the action of an administrative agency in DC federal court can be very difficult due to legal presumptions and burdens of proof which favor the government. Having said that, I must note for the record, that DJI's 50+page complaint cites several prior cases where courts ruled that DOD designations were not rationally based on facts and were therefore void and unenforceable. It may be a month or two before we hear or see the DOD's response. I am assuming the DOD will file an administrative record which explains its decision, at least to some degree. This case should be very educational and informative. It will just take a while to get to hearing and resolution.

 

[Chip]

DJI v Pentagon: Update: The federal judge in DC is reviewing two summary judgment motions in the case. He said in July that he may have to review classified information to make rulings and DJI's counsel could see it. The judge referred to a ruling he made in a similar case against HESAI which I believe may relate to Pentagon/DODs discretionary authority or quantum of proof needed to ban companies based on alleged ties to China's PLA.

 

[MS Coast]

The PRC is the ultimate and final authority for the biggest decisions and whether it's 1984 or 2024, nothing has changed with that regard. For example, should the US ban DJI drones in America starting in 2025, how DJI responds must be approved by Chairman Xi.

Saratoga, N.Y. - Congresswoman Elise Stefanik released the following statement on Barack Obama’s former Attorney General suing the United States Department of Defense (DoD) on behalf of Communist Chinese drone company DJI in an attempt to remove DJI from the DoD’s list of Chinese Military Companies.

Are you supporting your assertion with a statement from Representative Stefanik? We'll need something a bit more reality based to be convinced.

 

[Chip]

Elise Stefanik and Skydio may get too much credit/blame for the DJI drone ban. The persons most directly responsible work for the Department of Defense. The DOD created a list and put DJI on it. Not Skydio not Stefanik. The federal judge handling DJI vs. DOD made a recent decision against Hesai (LIDAR technology) which he indicated may be used to focus arguments in the next round of DJI briefing.

 

[Chip]

Here are a few verbatim excerpts from the court decision in Hesai. As you can see, the federal regulations use various terms such as Chinese defense industrial base, Chinese military company, and military-civil fusion enterprise zones.

"The DoD argues that it has proffered substantial evidence demonstrating that Hesai’s LiDAR technology has substantial military application. Specifically, the DoD identifies two potential military applications or benefits of LiDAR (including) LiDAR is critical to the development of autonomous driving vehicles which have substantial military use…

The Court concludes that an entity contributes to the Chinese defense industrial base if it produces a product or technology that has substantial military application or benefit.

(Hesai argues that) the DoD must – at some point in its analysis – be required to find that a particular entity has a meaningful connection to the Chinese military before the DoD can list the entity as a Chinese military company. But the plain terms of Section 1260H(d)(2)(E) do not appear to contain such a requirement. Indeed, Hesai appears to acknowledge as much, failing to point to a particular portion of Section 1260H(d)(2)(E) requiring the DoD to make a finding related to a specific contribution an entity makes to the Chinese military."

Condensed:
The DoD provided a detailed explanation setting forth evidence that demonstrates that the two enterprise zones in question – Chongqing Economic Development Zone and Jiading Industrial Zone – are focused in part on promoting military-civil fusion, and that Hesai has built or plans to build facilities in these enterprise zones.

 

[Felix le Chat]

Here are a few verbatim excerpts from the court decision in Hesai. As you can see, the federal regulations use various terms such as Chinese defense industrial base, Chinese military company, and military-civil fusion enterprise zones.

"The DoD argues that it has proffered substantial evidence demonstrating that Hesai’s LiDAR technology has substantial military application. Specifically, the DoD identifies two potential military applications or benefits of LiDAR (including) LiDAR is critical to the development of autonomous driving vehicles which have substantial military use…

The Court concludes that an entity contributes to the Chinese defense industrial base if it produces a product or technology that has substantial military application or benefit.

(Hesai argues that) the DoD must – at some point in its analysis – be required to find that a particular entity has a meaningful connection to the Chinese military before the DoD can list the entity as a Chinese military company. But the plain terms of Section 1260H(d)(2)(E) do not appear to contain such a requirement. Indeed, Hesai appears to acknowledge as much, failing to point to a particular portion of Section 1260H(d)(2)(E) requiring the DoD to make a finding related to a specific contribution an entity makes to the Chinese military."

Condensed:
The DoD provided a detailed explanation setting forth evidence that demonstrates that the two enterprise zones in question – Chongqing Economic Development Zone and Jiading Industrial Zone – are focused in part on promoting military-civil fusion, and that Hesai has built or plans to build facilities in these enterprise zones.

Your 'condensed' paragraph is interesting. The industrial quarter of the city near where I live has one general engineering business sub-contracted to supply parts for submarines, meaning that a crappy, run-down mid-Victorian factory district could be equally defined as being a "...military/civil fusion enterprise zone...": a catch-all definition if I've ever heard one.

 

[Chip]

Your 'condensed' paragraph is interesting. The industrial quarter of the city near where I live has one general engineering business sub-contracted to supply parts for submarines, meaning that a crappy, run-down mid-Victorian factory district could be equally defined as being a "...military/civil fusion enterprise zone...": a catch-all definition if I've ever heard one.

The meaning of MCF Enterprise Zone is summarized by Google AI below.

AI Overview of MCF Enterprise Zone

"A Military-Civil Fusion (MCF) enterprise zone, in the context of China's MCF strategy, is a designated area where civilian and military sectors collaborate to accelerate technological innovation and development, often with a focus on dual-use technologies. These zones aim to integrate China's civilian economy with its military modernization efforts, fostering a synergistic relationship between the two.

Key aspects of MCF enterprise zones:

• Dual-use technologies:
  These zones prioritize the development of technologies with both civilian and military applications, such as advanced materials, artificial intelligence, and aerospace.
  
  
• Integration of sectors:
  The goal is to break down barriers between civilian and military research, development, and production, allowing for the seamless transfer of knowledge and resources.
  
  
• Economic and military development:
  The strategy aims to simultaneously advance China's economic growth and its military capabilities, particularly in areas like intelligent warfare.
  
  
• Government support and coordination:
  The Chinese Communist Party (CCP) and the Central Military Commission oversee MCF initiatives, with various government bodies at the central and local levels providing guidance and support.
  
  
• Examples:
  Examples include the Chengdu Hi-Tech Industrial Development Zone, which has partnerships with companies like Huawei, and the Shanghai aviation and aerospace industrial base, which incorporates military requirements into its development.
  

In essence, MCF enterprise zones are a key component of China's broader MCF strategy, aiming to create a powerful synergy between its civilian and military sectors to achieve technological dominance and global influence."

 

[Chip]

This is why IMHO whether the drone sends data back to China is not the real issue. DJI has excellent legal counsel. It will be interesting to see what they do in the case given the judge's analysis in Hesai.