Anthropic asks the full appeals court to rethink its Pentagon blacklist loss

Anthropic filed a petition on Tuesday asking the DC Circuit to rehear its challenge to the Pentagon's decision to label the Claude maker a "supply chain risk," after a 2-1 panel ruling on September 25 let the designation stand and barred the military and its contractors from using Claude. Anthropic's lawyers at WilmerHale argue the majority gave Defense Secretary Pete Hegseth power that can be "aimed at virtually any American company, exercised without notice, justified in a sentence, and wielded to punish speech," citing skipped notice, due process and free speech grounds and Judge Karen LeCraft Henderson's dissent. The September ruling stays on hold while the court considers the request, which requires a majority of the court's active judges; if it fails, Anthropic could appeal to the Supreme Court.

Anthropic CEO Dario Amodei at TechCrunch Disrupt, pictured in 2023. Image: TechCrunch https://commons.wikimedia.org/wiki/File:Dario Amodei at TechCrunch Disrupt 2023 01.jpg / Wikimedia Commons, CC BY 2.0 https://creativecommons.org/licenses/by/2.0/ , cropped Anthropic has asked a federal appeals court in Washington to take a second look at its fight with the Pentagon. In a petition filed on Tuesday https://storage.courtlistener.com/recap/gov.uscourts.cadc.42923/gov.uscourts.cadc.42923.01208897389.0.pdf , the Claude maker asked the three judges who ruled against it last month, or the full DC Circuit, to rehear its challenge to the Defense Department’s decision to brand it a “supply chain risk.” What Anthropic is asking for The petition targets the court’s 2-1 ruling on September 25 https://madrobot.blog/2026/09/25/appeals-court-pentagon-anthropic-supply-chain-risk-ruling/ , which let the Pentagon keep the label and bar the military and its contractors from using Claude. Anthropic’s lawyers at WilmerHale argue the majority handed Defense Secretary Pete Hegseth a power “that can be aimed at virtually any American company, exercised without notice, justified in a sentence, and wielded to punish speech.” The filing opens with Anthropic’s account of the dispute: Hegseth labelled it a national security risk “because it declined to permit its models to be used for mass surveillance of Americans or lethal autonomous warfare and publicly explained those AI-safety commitments.” It says the panel ignored “straightforward evidence the designation was retaliation for Anthropic’s speech about AI safety,” pointing to Hegseth’s own posts attacking the company’s “sanctimonious rhetoric” and “ideology.” Four reasons to rehear - The law itself. The 2018 statute targets the risk that someone may “sabotage, maliciously introduce unwanted function, extract data, or otherwise manipulate” a product. The majority read “otherwise manipulate” to cover ordinary design choices, whatever the motive. Anthropic says that clashes with the Supreme Court’s 2024 Fischer ruling and has “no limiting principle,” since every contractor controls its own products. - Skipped notice. The law requires a warning and a chance to respond before a designation. The Pentagon skipped both, citing an urgent national security interest in a single sentence, and the panel called that harmless. - Due process. Anthropic says it got less protection than suspected foreign terrorist organisations, which the same court has said must normally be warned first. - Free speech. It points to a federal judge in San Francisco who found in August “direct evidence” that Anthropic’s speech drove a parallel designation, on what it calls a near-identical record. “Agree to the Secretary’s demands” The petition leans heavily on Judge Karen LeCraft Henderson’s dissent, quoting the choice she said every contractor now faces: Agree to the Secretary’s demands or risk being designated a national security threat. Judge Karen LeCraft Henderson, DC Circuit, in dissent Anthropic notes the law had never been publicly used before its case, and that 15 amicus briefs, one of them from 149 former judges, backed its side. It warns a designation “can be crushing, even fatal” for a contractor, and that because the DC Circuit alone hears these challenges, the panel’s ruling would be “the last word short of Supreme Court review.” Anthropic declined to comment beyond the filing, CNBC reports https://www.cnbc.com/2026/10/13/anthropic-wants-court-in-dc-to-rehear-appeal-of-pentagon-blacklist-.html . The Pentagon hasn’t commented. What happens next The court held off on making its September ruling final so Anthropic could ask for a rehearing, and it stays on hold while the judges consider the request. Full-court rehearings are rarely granted: a majority of the court’s active judges must vote for one. If the request fails, Anthropic could take the case to the Supreme Court. A second label the Pentagon applied under a different law remains struck down by the San Francisco court. In practice the split has changed little: on October 5 the Pentagon said it had stopped using Claude https://madrobot.blog/2026/10/05/pentagon-stops-using-anthropic-claude-maven-supply-chain-risk/ altogether, even as President Trump invited Anthropic CEO Dario Amodei to a private White House dinner https://madrobot.blog/2026/09/27/trump-dario-amodei-white-house-dinner-anthropic/ days after the ruling. Why it matters This is the first big test of whether the US government can blacklist an AI lab over the limits it puts on its own models. A final loss would keep Anthropic, which is preparing to go public https://madrobot.blog/2026/10/01/anthropic-ipo-2-trillion-valuation-date-how-to-buy-stock/ , out of military work, and give the Pentagon a powerful lever over every other AI company it buys from. Sources: Anthropic’s petition for rehearing DC Circuit, via CourtListener https://storage.courtlistener.com/recap/gov.uscourts.cadc.42923/gov.uscourts.cadc.42923.01208897389.0.pdf , DC Circuit docket 26-1049 https://www.courtlistener.com/docket/72380208/anthropic-pbc-v-united-states-department-of-war/ , CNBC https://www.cnbc.com/2026/10/13/anthropic-wants-court-in-dc-to-rehear-appeal-of-pentagon-blacklist-.html .