D.C. Circuit Panel Signals Skepticism of Pentagon Action Against Sen. Kelly

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit signaled May 16 that it is unlikely to reverse a lower court ruling that blocked the Defense Department's administrative effort to reduce Sen. Mark Kelly's (D-Ariz.) retired military rank and retirement pay. According to POLITICO, the panel questioned Justice Department lawyers sharply and appeared unlikely to depart from the district court's February holding. The government's appeal tests whether the executive branch may use military retirement law to discipline a sitting U.S. senator for political speech made after leaving active duty.

The dispute traces to November 2025, when Kelly and five other Democratic lawmakers, all veterans or former intelligence officials, released a video reminding service members of their duty to refuse unlawful orders [POLITICO]^[1][2]. The video contained no reference to specific operations, but it was published against a backdrop of U.S. military strikes on vessels suspected of drug trafficking in the Caribbean and Eastern Pacific and a military buildup in the region ^[3][4]. Defense Secretary Pete Hegseth characterized Kelly's statements as "seditious" and, in January 2026, invoked 10 U.S.C. § 1370(f), the federal statute governing retirement-grade determinations, to initiate proceedings that could reduce Kelly's retired grade from captain and cut his pension accordingly ^[5][6]. Hegseth also issued a formal letter of censure, which was placed in Kelly's permanent military personnel file ^[7][8]. Kelly is the only member of the group subject to Pentagon jurisdiction because he formally retired from the Navy after 25 years of service and continues to draw retirement pay, making him subject to the Uniform Code of Military Justice; the other five lawmakers separated from service rather than retiring and therefore do not fall under UCMJ jurisdiction ^[9][10].

Kelly filed a civil complaint in the U.S. District Court for the District of Columbia in January 2026, arguing the Pentagon's actions constituted unconstitutional retaliation for protected speech and invoked the Speech or Debate Clause of Article I ^[11][12]. He also raised a First Amendment challenge, contending that restricting the post-retirement political speech of a sitting senator exceeded any authority military retirement statutes confer on the Secretary of Defense ^[13]. U.S. District Judge Richard Leon held a hearing in February 2026 and ruled that the proposed punishment would represent an unconstitutional limitation on free speech ^[14]. Leon noted at the hearing that no court had previously sustained the government's theory, telling Justice Department counsel: "That's never been done" and that the government had not offered a single precedent in support ^[14]. Hegseth announced the ruling would be appealed immediately ^[15].

The statutory theory the government advanced is contested on its face. Legal experts have questioned whether retirement-grade determinations under 10 U.S.C. § 1370, which tie a retired officer's grade to the highest rank in which the officer served on active duty satisfactorily, can be reopened based on post-retirement political speech rather than conduct during active service. Under the statute's plain terms, grade determinations at retirement are final, and revisitation is authorized only in cases of fraud, newly discovered misconduct committed while on active duty, or other good cause related to conduct during active service. The Pentagon's invocation of the provision to address speech made by a retired senator in his legislative capacity produced no governing precedent on either side.

The five other Democratic lawmakers who appeared in the video faced no adverse action from the Defense Department because they do not draw retirement pay from the U.S. military. That jurisdictional asymmetry underscores the narrowness of the Pentagon's theory: only Kelly's formal retired status, not the content of any participant's remarks, distinguished his exposure from that of his co-participants. The lawsuit places a rarely litigated question squarely before a federal court: whether the executive branch can use military retirement law to discipline a sitting senator for speech made years after leaving active duty.

The political dimensions of the case are substantial. Kelly has alleged that he was punished for protected speech and that his criticisms of Hegseth are at the core of the Constitution's Speech or Debate Clause, which provides immunity to lawmakers for legislative acts. Kelly is also considered a potential 2028 presidential candidate, and POLITICO reports the dispute has generated $25 million in fundraising for him [POLITICO]. If the D.C. Circuit affirms Judge Leon's ruling, the administration's effort to deploy military retirement statutes against a sitting senator's political speech will have failed at every federal level it has reached, and the decision could set a durable limit on executive authority over retired officers engaged in civilian public life.

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