Judge Blocks Pentagon Lobbying Restriction as Applied to Alibaba, Citing First Amendment
A federal judge in San Jose has blocked the Defense Department from enforcing a lobbying restriction tied to its list of "Chinese military companies" against Alibaba, ruling that the law likely violates the company's First Amendment rights.
U.S. District Judge Eumi K. Lee of the Northern District of California granted Alibaba a preliminary injunction on Monday, Oct. 26, according to the 26-page order reviewed by The Digital Free Press. The order bars the department from refusing to contract with any company because it shares a lobbying firm with Alibaba. It applies only to Alibaba.
The law, 10 U.S.C. § 4663, was enacted as Section 851 of the fiscal 2025 defense authorization act and took effect June 30, 2026. It bars the Pentagon from contracting with companies that retain the same lobbyist as a company on the department's Section 1260H list. The department listed Alibaba on Feb. 13 and kept it on an updated list issued June 8.
The Court's Reasoning on Alibaba
According to the order, Alibaba's lobbyists, including some who had represented the company for almost a decade, began withdrawing after the designation, and multiple firms told Alibaba the law was the reason. By June 30, the company says, it had no registered lobbyists.
Lee concluded that strict scrutiny applies because the law "restricts political speech based on the speaker's identity." The government argued the law serves two interests: keeping listed companies "from accessing sensitive military information through their relationships with lobbyists" and ensuring they "cannot subtly influence" Pentagon national security decisions.
The judge called national security a compelling interest but wrote that "there is no evidence in the record of Congress determining that access to military information or improper influence were problems to be addressed." She noted that government lawyers could not confirm at the August hearing whether a report Congress requested from the Comptroller General, due by Dec. 23, 2025, had been submitted. She added that the government's showing would fall short "even under intermediate scrutiny."
The government had argued that Alibaba could still hire in-house lobbyists or find firms willing to give up defense contractor clients. The court found the company's speech was burdened anyway.
What the Order Does Not Do
Lee declined Alibaba's request to remove it from the 1260H list, calling that step premature before the court reviews the administrative record, and she did not block the law for other companies. Alibaba's challenges to the designation itself remain pending, and the judge called for immediate briefing on summary judgment. She set a nominal $100 bond, the amount the government requested at the hearing, with proof due Oct. 30. The docket also lists an order and a notice filed Oct. 29 whose contents are not available on the free public docket.
Other companies on the list remain covered by the law. Earlier this month, The Digital Free Press reported that Tencent, which is also on the 1260H list, hired a new Washington lobbying firm, Platinum Advisors DC, after four firms filed termination reports for its U.S. arm in late June.
Sources: U.S. District Court for the Northern District of California, Alibaba Group Holding Limited et al. v. U.S. Department of Defense et al., No. 5:26-cv-06227-EKL, Order Granting Preliminary Injunction, ECF No. 51 (Oct. 26, 2026): https://cases.justia.com/federal/district-courts/california/candce/5:2026cv06227/472746/51/0.pdf ; case docket: https://www.courtlistener.com/docket/73518992/alibaba-group-holding-limited-v-united-states-department-of-defense/ ; The Digital Free Press, "EXCLUSIVE: Tencent Hires New Washington Lobbying Firm on Pentagon's Chinese Military List After Four Firms Quit" (Oct. 23, 2026): https://www.thedigitalfreepress.com/post/exclusive-tencent-hires-platinum-advisors-lobby-pentagon-1260h-list . Cover photo: aerial view of the Pentagon by mariordo59 via Wikimedia Commons, CC BY-SA 2.0.
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