Listening. Sounds to me like the appeals court is not impressed with the claim that a district court cannot review the government's motives, even when the district court thinks it has been lied to.
Barr defence is always the same. The government will disclose as little as possible, but its decision cannot be challenged because Article Two says so (in Barr's opinion).
Judges trying to show how the government's Article Two claims are exaggerated, and that the technical defence fails the fundamental interests of justice. Also that the government's argument diminishes the powers of the courts unreasonably, where the government's motives appear questionable or make a mockery of the court.
Exception to Fokker sounds likely.