Federal Court Sides With Pentagon in Anthropic Dispute

A federal court ruled in favor of the Department of Defense in a lawsuit over the Department’s decision to label Anthropic a supply-chain risk earlier this year. In a split 2-1 decision, Judge Gregory Katsas of the Washington D.C. Circuit Court, an appointee of President Trump, wrote for the majority that Anthropic’s constitutional claims in its lawsuit against the Department of Defense were “without merit.”

Friday’s ruling comes just a month after a federal district judge ruled in favor of Anthropic in a similar lawsuit. In that case, brought before the Northern District of California, Judge Rita Lin wrote that “The empty invocation of national security is not a blank check to punish and retaliate against government critics.” Both rulings could still be challenged, and the broader case could end up at the Supreme Court.

Though the case before the D.C. Circuit Court dealt with different statutory authorities than the California lawsuit, the two cases raised similar legal questions as to whether the Defense Department’s decision to label Anthropic a supply chain risk violated the company’s constitutional rights.

In Friday’s ruling, Judge Katsas wrote that Anthropic’s due-process claim failed because the Defense Department promptly notified the company of its exclusion and supporting rationale and gave it the opportunity to contest the exclusion. Furthermore, Anthropic’s First Amendment claim failed because the Department excluded Anthropic from its supply chain due to the company’s refusal to agree to contract terms that the Defense Department deemed essential.

“This case raises profoundly difficult questions about the appropriate military uses of an almost unimaginably powerful new technology,” wrote Katsas. “But in our Republic, it is the President and the Secretary of War who must determine how best to balance the competing risks.”

“We remain confident in our position and are considering all options, including further review,” an Anthropic spokesperson said.