Anthropic asks D.C. Circuit to reconsider Pentagon supply-chain ruling

Anthropic filed a petition on October 13 asking the U.S. Court of Appeals for the D.C. Circuit to rehear its 2-1 September 25 ruling upholding the Pentagon's designation of Anthropic as a national-security supply-chain risk, which allows the Department of War to exclude Anthropic's Claude systems from its supply chain. Anthropic argues the majority misread the Federal Acquisition Supply Chain Security Act of 2018, that Secretary of War Pete Hegseth designated the company without required notice and an opportunity to respond, and that the designation retaliated against its limits on Claude's use in fully autonomous lethal warfare and mass surveillance of Americans. The D.C. Circuit has withheld its mandate while the petition for panel rehearing or rehearing en banc is pending, and a separate August 27 ruling by a federal judge in California rejected a related designation under a different statute.

Anthropic asks D.C. Circuit to reconsider Pentagon supply-chain ruling - Anthropic filed a petition for panel rehearing or rehearing en banc on October 13, challenging the D.C. Circuit’s 2-1 ruling upholding the Pentagon’s supply-chain designation. <sup \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ </sup - The company argues that the majority read federal law too broadly, excused the government’s failure to provide pre-designation process and overlooked evidence that the action was retaliation for Anthropic’s AI-safety positions. <sup \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ </sup <sup \ 3\ https://www.investing.com/news/world-news/anthropic-seeks-rehearing-of-case-over-pentagons-security-risk-branding-4947806 </sup - The September ruling permits the Pentagon to exclude Anthropic’s products from its supply chain, while a separate August ruling in California rejected a related designation under a different statute. <sup \ 4\ https://www.washingtonpost.com/technology/2026/08/27/federal-judge-overturns-pentagon-ban-claude-chatbot-maker-anthropic/ </sup <sup \ 5\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ </sup - A rehearing would allow the three-judge panel or the full D.C. Circuit to revisit the judgment. The court has withheld its mandate while the petition is pending. <sup \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ </sup <sup \ 2\ https://www.govinfo.gov/content/pkg/USCOURTS-caDC-26-01049/pdf/USCOURTS-caDC-26-01049-0.pdf </sup Anthropic has asked the U.S. Court of Appeals for the D.C. Circuit to reconsider its decision upholding the Pentagon’s designation of the AI company as a national-security supply-chain risk, extending a fight over whether the government can penalize a contractor for refusing to remove restrictions on military uses of its models. \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ The petition, filed October 13, challenges a 2-1 ruling issued September 25 that allowed the Department of War, the current statutory name used in the case for the former Department of Defense, to exclude Anthropic’s Claude systems from its supply chain. Anthropic is seeking both panel rehearing and rehearing en banc. \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ \ 2\ https://www.govinfo.gov/content/pkg/USCOURTS-caDC-26-01049/pdf/USCOURTS-caDC-26-01049-0.pdf Anthropic’s objections to the September ruling Anthropic argues that the majority misinterpreted the Federal Acquisition Supply Chain Security Act of 2018. The company says the statute addresses risks such as sabotage, data extraction and malicious manipulation, and that the panel improperly treated ordinary control over a product as enough to trigger the law even without a subversive purpose. \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ \ 3\ https://www.investing.com/news/world-news/anthropic-seeks-rehearing-of-case-over-pentagons-security-risk-branding-4947806 The petition also challenges the government’s procedure. Anthropic says Secretary of War Pete Hegseth designated the company without giving it the notice and opportunity to respond that the law required. It argues that the majority wrongly treated that omission as harmless even though the designation removed Anthropic from the Pentagon’s procurement pipeline. \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ Anthropic separately maintains that the designation was retaliation for its public and contractual limits on the use of Claude in fully autonomous lethal warfare and mass surveillance of Americans. The company points to an August 27 ruling by a federal judge in San Francisco, who found that a parallel designation under a different Defense Department authority was unlawful and that Anthropic’s speech was a substantial factor in the government’s action. \ 4\ https://www.washingtonpost.com/technology/2026/08/27/federal-judge-overturns-pentagon-ban-claude-chatbot-maker-anthropic/ \ 5\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ What the appeals court decided The D.C. Circuit majority, in an opinion by Judge Gregory Katsas joined by Judge Neomi Rao, concluded that the Pentagon had sufficient support for treating Anthropic’s continued integration into military systems as a statutory national-security risk. The court emphasized the company’s ability to shape Claude’s behavior through model training and its history of refusing some government requests because of its restrictions. \ 2\ https://www.govinfo.gov/content/pkg/USCOURTS-caDC-26-01049/pdf/USCOURTS-caDC-26-01049-0.pdf The majority rejected Anthropic’s claims under the First and Fifth Amendments and denied its petitions for review. Judge Karen LeCraft Henderson dissented, arguing that the supply-chain statute did not cover Anthropic’s good-faith enforcement of disclosed usage restrictions and that the government’s action raised serious retaliation concerns. \ 2\ https://www.govinfo.gov/content/pkg/USCOURTS-caDC-26-01049/pdf/USCOURTS-caDC-26-01049-0.pdf \ 6\ https://media.cadc.uscourts.gov/opinions/docs/2026/09/26-1049-2194984.pdf The dispute began after negotiations in February 2026 over the Pentagon’s demand for access to Claude for “all lawful uses.” Anthropic agreed to support several defense applications but kept restrictions on mass domestic surveillance and fully autonomous lethal weapons. The Pentagon then moved to designate the company as a supply-chain risk and ordered its removal from relevant procurement channels. \ 2\ https://www.govinfo.gov/content/pkg/USCOURTS-caDC-26-01049/pdf/USCOURTS-caDC-26-01049-0.pdf \ 7\ https://www.govinfo.gov/content/pkg/USCOURTS-caDC-26-01049/pdf/USCOURTS-caDC-26-01049-0.pdf What rehearing would change A petition for rehearing does not itself erase the September judgment. Under Federal Rule of Appellate Procedure 40, the panel may reconsider its decision, while rehearing en banc generally requires a question of exceptional importance or a conflict with controlling precedent. \ 8\ https://uscode.house.gov/view.xhtml?edition=prelim&req=granuleid%3AUSC-prelim-title28a-node6&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGUyOGEtbm9kZTYtbm9kZTEyLXJ1bGU1%7C%7C%7C0%7Cfalse If rehearing is granted, the court could order new briefing, revise the panel decision or issue another ruling. The D.C. Circuit’s mandate has been withheld while the rehearing process proceeds. <sup \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ </sup If the petition is denied, the September ruling would remain in force and Anthropic could ask the Supreme Court to review the case, although the Supreme Court would decide whether to take it. \ 1\ https://www.unite.ai/anthropic-asks-d-c-circuit-to-rehear-pentagon-supply-chain-risk-case/ \ 8\ https://uscode.house.gov/view.xhtml?edition=prelim&req=granuleid%3AUSC-prelim-title28a-node6&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGUyOGEtbm9kZTYtbm9kZTEyLXJ1bGU1%7C%7C%7C0%7Cfalse The government’s position in the underlying case is reflected in the September opinion: the Pentagon argued that Anthropic’s restrictions could prevent the military from relying on Claude for lawful missions and that the company’s ability to influence model behavior created a supply-chain risk. As of October 14, no public government response to the rehearing petition was identified in the sources reviewed. \ 2\ https://www.govinfo.gov/content/pkg/USCOURTS-caDC-26-01049/pdf/USCOURTS-caDC-26-01049-0.pdf \ 9\ https://fourweekmba.com/ai-anthropic-asks-full-court-to-rehear-2-1-pentagon-ban-ruling/ Companies mentioned Further sources The stories that matter, in one email. Free — unsubscribe anytime.