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Due to the controversial nature of DADT, it was the subject of numerous legal challenges during its lifespan. The US Court of Appeals for the First Circuit has dismissed two lawsuits challenging DADT, one brought by the Servicemembers Legal Defense Network (SLDN) in 2006 and the other filed by 12 gay and lesbian former US military members who had been dismissed from service in 2008. Several other individual challenges, including one filed by a discharged Air Force officer in August 2010 in the US District Court for the District of Idaho, have also found their way into the federal courts.

However, the US Court of Appeals for the Ninth Circuit was the major legal battleground over DADT between 2008 and 2011. In May 2008, the court ruled that the military must demonstrate that the specific dismissal of a service member was necessary to further an important government interest, applying the Supreme Court precedent of Lawrence v. Texas to impose a higher standard of scrutiny on the policy. The most prominent challenge to DADT in the Ninth Circuit was Log Cabin Republicans v. US. The case began in the US District Court for the Central District of California in July 2010 and was brought by the Log Cabin Republicans (LCR), who argued that DADT violated both First Amendment and due process rights under the US Constitution. The district court ultimately struck down DADT, with Judge Virginia Phillips ordering the military to suspend its enforcement of the policy in October 2010.

This ruling forced the Obama administration into the difficult posture of having to simultaneously oppose the suspension of the law within the courts while working to repeal it within Congress. The Obama administration entered an emergency motion to temporarily stay the injunction from the district court. The Ninth Circuit then granted the stay in October 2010 and later indefinitely extended it in November 2010. However, the court subsequently again ordered an immediate end to the military's enforcement of DADT. However, the court temporarily reinstated the law a few days later in anticipation of the pending repeal.

For its part, the Supreme Court has been cautious about dealing directly with the issue of DADT. The court denied a petition for certiorari in Pietrangelo v. Gates, a case challenging DADT from the First Circuit in June 2009. The court also declined to vacate an order issued by the Ninth Circuit which allowed the military to continue to enforce DADT.

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