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This Day in Legal History: The Neutrality Act of 1935

On August 31, 1935, President Franklin Roosevelt signed the first of what would become a series of Neutrality Acts—laws designed to keep the United States out of the wars gathering in Europe and Asia. This first act imposed a mandatory embargo on shipping arms and ammunition to any nation the president declared to be at war, and it put America’s armaments industry under a measure of federal control. It was a legal expression of the deep isolationism that gripped the country between the world wars.

Here’s the constitutional wrinkle that makes it interesting, and that Roosevelt himself chafed against. FDR wanted flexibility—he asked Congress for a law that would let him embargo arms to an aggressor nation while still selling weapons to its victim. Congress refused. Instead, it wrote a rigid, evenhanded rule: once the president declared that a state of war existed, he had to embargo arms to all sides, aggressor and victim alike. That was a deliberate congressional choice to tie the executive’s hands in foreign affairs, to prevent a president from drawing the country toward one belligerent or another. Roosevelt signed it reluctantly, believing he could get it revised—and over the next several years, as the threat from fascism grew undeniable, the Neutrality Acts were indeed loosened, culminating in Lend-Lease and, ultimately, American entry into the war.

The significance of August 31, 1935 is as a case study in the perennial struggle between Congress and the president over foreign affairs, and in the moral limits of legal neutrality. The mandatory embargo’s great flaw was exactly its neutrality: by treating aggressor and victim the same, it arguably aided aggressors, who were already armed, against victims who were not. That’s the tension in today’s opening quote from Desmond Tutu—the idea that neutrality in the face of injustice is not really neutral at all. It’s a fitting backdrop for a day that includes a story about the government’s power over foreign companies, and one about whether the state can suppress speech it dislikes.

A federal judge has dealt a significant blow to the administration’s campaign to deport noncitizen students over pro-Palestinian activism, ruling that the effort is unconstitutional. In a lengthy 90-page opinion, U.S. District Judge Noël Wise in San Jose found that the administration’s use of existing immigration law to cancel foreign students’ visas and put them into deportation proceedings—based on their campus advocacy and criticism of Israel—violates the First Amendment right to free speech. The ruling traces the policy back to March 2025, when the government began revoking visas and detaining noncitizens for pro-Palestinian advocacy, starting with the high-profile arrest of Columbia graduate Mahmoud Khalil. The lawsuit was brought, notably, by the Stanford Daily, Stanford’s student newspaper. Here’s the core legal principle, and it’s an important one that surprises people: noncitizens physically present in the United States have First Amendment rights. The government has broad power over immigration, but the judge found it can’t use that power as a pretext to punish people for protected speech—that would be viewpoint discrimination, targeting people precisely because of the ideas they express. Judge Wise sharply criticized the State Department and Homeland Security for deploying immigration law to suppress views they didn’t like. The significance connects to threads we’ve followed all summer—the pressure on universities, the Comey prosecution, the fights over dissent. This is a court drawing a hard line: the immigration system is not a loophole around the First Amendment, and the government cannot deport people for saying things it wishes they hadn’t. Expect an appeal, but as a statement of principle, it’s a forceful one. Judge deals blow to Trump moves to deport pro-Palestinian activists | ReutersAl Jazeera · The Hill

Now a story about the business of law: U.S. law firm office leasing surged 17% in the first half of 2026, with firms signing leases for nearly 12.2 million square feet, according to Cushman & Wakefield—and the second quarter was up a striking 27% over the same period last year. This is a boom, concentrated in the big legal markets of New York, Chicago, and Washington, and it includes some eye-popping deals, like Simpson Thacher’s roughly 916,000-square-foot Manhattan lease—the same firm we discussed back in July over its rare malpractice trial. What’s driving it is worth unpacking, because it contains a real paradox. Firms say their caseloads are exploding under a combination of forces: rising regulatory uncertainty, a more litigious business climate, and—here’s the twist—the surge in artificial intelligence. AI adoption in law has rocketed, with something like 62% of firms now using it, up from just 17% a few years ago. And here’s the paradox worth sitting with: we covered, a few weeks ago, how AI is thinning out entry-level hiring by automating the document review and first drafts that junior associates used to do. So how are firms leasing more space while hiring fewer juniors? The answer seems to be that the high end of legal work is booming—more complex, higher-stakes matters that generate demand for experienced lawyers and premium space—even as the bottom of the pyramid gets automated. The significance is a snapshot of a profession in transition: Big Law is physically expanding and financially thriving at the top, while the traditional on-ramp for young lawyers narrows. The office towers are filling up; it’s just less clear who will be sitting in the entry-level offices a decade from now. US law firm leasing jumped 17% in first half, report says | ReutersCushman & Wakefield · Law360

And finally, China’s largest memory chipmaker, ChangXin Memory Technologies—CXMT—has sued the Pentagon to get itself off a U.S. government blacklist of companies it says are tied to China’s military. The list in question is the Defense Department’s roster of “Chinese military companies,” maintained under a provision of federal defense law, and landing on it carries real consequences: restrictions on government contracting and significant reputational damage that can spook customers and partners worldwide. CXMT’s argument is straightforward—it says it’s not affiliated with the Chinese military at all, and that it designs and sells its DRAM memory chips purely for civilian and commercial use. The most interesting piece of the lawsuit, legally, is a procedural one. CXMT alleges that the Pentagon actually published a notice in February saying the company would be removed from the list—then withdrew that notice the very same day, and later relisted the company in June without adequately explaining why it reversed course. That’s the heart of an administrative-law claim: under the standards that govern federal agency action, the government generally can’t act arbitrarily or capriciously, and a sudden, unexplained reversal is exactly the kind of thing courts scrutinize. And CXMT isn’t alone—Alibaba filed a similar suit in June, and Xiaomi actually won removal from the list through U.S. litigation back in 2021. The significance is a reminder that even in the highly deferential arena of national security, designations like this are reviewable in American courts—foreign companies can, and increasingly do, use U.S. administrative law to challenge being branded a security threat, and sometimes they win. CXMT sues Pentagon over inclusion on list of companies tied to China’s military | ReutersUS News · Benzinga

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