Appeals court signals it will side with Sen. Mark Kelly in censure and pension fight against Hegseth

A federal appeals panel in Washington, D.C., appeared ready Thursday to uphold a lower-court ruling that blocked Defense Secretary Pete Hegseth from censuring Sen. Mark Kelly and cutting the Arizona Democrat's military retirement pay, a case that has become a high-profile collision between executive authority over retired service members and First Amendment protections.

Most judges on the U.S. Circuit Court of Appeals for the D.C. Circuit threw cold water on the Justice Department's arguments during oral arguments, AZFamily reported. The panel's skepticism suggests the administration faces an uphill fight to reverse the district court's finding that Hegseth's actions were unconstitutionally retaliatory.

The dispute traces back to last fall, when Kelly and other Democratic lawmakers posted a video message reminding active-duty troops that they are not required to follow illegal orders. The Pentagon moved to punish Kelly, a retired Navy captain and former astronaut, by reducing his rank and docking his retirement pension. Kelly sued, arguing the move was designed to silence his speech.

What the lower court found

U.S. District Judge Richard Leon issued a 29-page opinion blocking Hegseth's effort. Leon found that Kelly was likely to succeed on his First Amendment claim and rejected the argument that retired service members can be punished for their speech in this manner. The judge did not mince words. As the Washington Examiner reported, Leon used the word "Horsefeathers!" to dismiss the government's position.

Leon wrote in his opinion:

"This Court has all it needs to conclude that Defendants have trampled on Senator Kelly's First Amendment freedoms and threatened the constitutional liberties of millions of military retirees."

Hegseth responded immediately, vowing to appeal. That appeal is the proceeding the D.C. Circuit heard Thursday.

The appeals hearing

Judge Florence Pan, an appointee of former President Joe Biden, pressed the government's lawyer during Thursday's arguments. Pan pointed to the nature of the speech at issue, retired service members weighing in on the lawfulness of military orders, and the consequences the administration sought to impose.

"These are people who served their country, many put their lives on the line. And you're saying that they have to give up their retired status in order to say something that is a textbook example taught at West Point and the Naval Academy, that you can disobey illegal orders."

Pan's comments reflected the broader tone of the panel. CNN reported that most judges hearing the case were skeptical of the Justice Department's position, raising doubts about whether the government can show the lower court got it wrong.

The friction between Hegseth and other figures at the Defense Department has been a recurring theme of his tenure. Internal leadership tensions at the Pentagon have drawn scrutiny from multiple directions, and the Kelly case adds a constitutional dimension to the questions surrounding his management decisions.

Kelly's response outside the courthouse

After the hearing, Kelly spoke to reporters on the courthouse steps. He framed the case not as a personal grievance but as a test of free-speech protections for millions of military retirees.

"This was a day in court, not just for me, but for the First Amendment rights of millions of us."

Kelly has been more pointed in earlier statements. When Hegseth first announced the appeal, the senator said there was only one reason to continue the fight. As Just The News reported, Kelly stated:

"A federal judge told Donald Trump and Pete Hegseth that they violated my constitutional rights and chilled the free speech of millions of retired veterans. There is only one reason to appeal that ruling: to keep trampling on the free speech rights of retired veterans and silence dissent."

That framing, casting the case as a broad assault on veterans' speech, is the political argument Kelly and his allies have pressed from the start. Whether the courts ultimately agree with his constitutional claims is another matter, but Thursday's hearing gave him reason for confidence.

The criminal track that went nowhere

The censure effort was not the only avenue the administration pursued. The Trump administration also tried to bring criminal charges against the lawmakers who appeared in the video. President Trump characterized the video as seditious and punishable by death, a characterization that Kelly and his defenders treated as evidence of retaliatory intent.

But a grand jury declined to indict any of the lawmakers involved. That outcome weakened the government's position in the civil case, because it undercut the argument that the video constituted a genuine threat to military discipline rather than protected political speech.

The broader legal landscape around these questions remains unsettled. The D.C. Circuit has been active in cases involving the administration, and the Kelly dispute is now one of several high-profile matters where federal judges have drawn lines around executive action.

Hegseth, meanwhile, has been busy reshaping the Pentagon in other ways. He recently launched a 45-day review of military legal offices aimed at cutting what he views as bureaucratic excess, a move consistent with his broader reform agenda but one that critics say reflects a pattern of confrontation with institutional norms.

What comes next

No timeline has been announced for when the appeals court will issue its ruling. If the panel upholds the lower court, Hegseth's options narrow considerably. He could seek rehearing before the full D.C. Circuit or petition the Supreme Court, but Thursday's hearing suggested the three-judge panel is not inclined to reverse Judge Leon's findings.

Kelly, for his part, has turned the legal battle into a political platform. He has floated a 2028 presidential bid even as the case works its way through the courts. The senator clearly sees the dispute as an asset, not a liability, a chance to cast himself as a defender of veterans and constitutional principle against executive overreach.

That political calculation is worth keeping in mind. Kelly is not simply a passive defendant here. He is a sitting Democratic senator who recorded a video aimed at active-duty troops during a period of sharp partisan conflict over military policy. The question of whether that speech crosses any line, or whether the government's response was proportionate, is one the courts are still working through.

But the trajectory is clear. A district judge called the censure unconstitutional. A grand jury refused to indict. And now most of the appeals panel appears ready to agree.

When every branch of the legal system keeps reaching the same conclusion, the government might consider whether the problem is the speech, or the response to it.