A federal judge refused to throw out a lawsuit against Defense Secretary Pete Hegseth brought by a Coast Guard contractor fired over his comments about conservative activist Charlie Kirk's killing.
U.S. District Judge Timothy J. Kelly turned down the government's attempt to move the case out of his court in a memorandum opinion issued Friday.
The opinion says Peter Souders can now press his claim that federal officials forced his employer to fire him. He sued Hegseth, Homeland Security Secretary Kristi Noem, the Departments of Defense and Homeland Security, and two lower-ranking officials.
Government lawyers wrongly argued Kelly had no power to hear the case at all, according to the ruling.
Souders's complaint was really a contract dispute, they told the court, so it belonged in the Court of Federal Claims under the Contract Disputes Act, a law that channels contract disputes to that court.
They pointed to a section of the Coast Guard's contract with Souders's employer that lets the agency bar people from the job when it considers their employment "contrary to the public interest for any reason, including, but not limited to, carelessness, insubordination, incompetence, or security concerns," the opinion says.
"Defendants are wrong for several reasons," Kelly wrote.
Souders cannot claim rights under a contract he never signed, the judge wrote, because the agreement is between the Coast Guard and Advanced Concepts Enterprises Inc., the company that employed him. The Contract Disputes Act covers only the parties to a government contract, so it does not reach a contractor's employee, the opinion said.
Souders is not suing over a broken contract term, Kelly continued. He says the government violated his right to speak freely, and those rights "exist prior to and apart from rights created under [any] contract," the judge wrote.
Kelly cited a 2009 case in which a federal contractor lost her work after appearing in a YouTube video protesting the Iraq War. The court in that case found the government's use of its "contracting powers as a means to retaliate" did not turn her claim into a contract dispute, according to the opinion.
What mattered was not whether the contract forbade the termination, the court in that case held, but "whether the Constitution forbids it."
"So too here," Kelly wrote.
The government also asked the judge to dismiss the case on the grounds that Souders had not pleaded enough facts, but the opinion says it spent a single line of its motion on that point.
"The Court will decline to do the government's work for it," Kelly wrote.
The judge did grant part of the government's motion, throwing out Souders's separate request for a declaratory judgment, the ruling shows. A declaration is a form of relief rather than a claim on its own, the judge wrote. Souders does not need one, Kelly wrote, because his First Amendment claim can already win him everything he is seeking.
The case traces back to the days after Kirk was shot and killed on Sept. 10, 2025, while speaking at a college event in Orem, Utah. Souders, an engineer and project manager who had started at Coast Guard headquarters in Washington that July, posted comments about the killing on Facebook, NBC News reported.
Comments attributed to Souders spread on X the next day, the outlet said. They called Kirk a "noted Islamophobe," a "Putin operative" and a "Nazi."
"You can't be pro-punching Nazis and then pretend it's a bad thing when someone actually does," another comment read.
A week later, Michael Cogar, deputy assistant secretary of defense for civilian personnel policy, contacted Greyson McGill, chief of staff to the Homeland Security under secretary for management, about "inappropriate behavior" by a Coast Guard contractor.
McGill replied that he would "take care of the . . . matter," according to the ruling. He then emailed department staff about a social media post linked to Souders and ordered them to offboard him "without delay."
Souders was fired the next day.
His employer told him it had received "an email from the federal government directing that Souders's work for the Coast Guard be terminated" and that it would have to let him go entirely.
Mark Zaid, an attorney for Souders, confirmed his client wrote the comments but said it is still unclear which posts "were specifically seen, sent to or known by the government and then relied upon or caused the firing," NBC News reported.
Souders is asking the court to restore his ability to work for the Coast Guard.
"This case addresses a much broader issue than just one plaintiff but challenges unconstitutional efforts by the Trump Administration to censor individuals' private views, which represents an ongoing threat to everything we value sacred in our country," Zaid told NBC News.
Hegseth directed staff to identify and discipline service members who mocked Kirk's killing, two defense officials told NBC News.