{"slug": "why-the-pentagon-s-claude-ban-survived-in-washington-after-losing-in-california", "title": "Why the Pentagon's Claude ban survived in Washington after losing in California: the two laws, the 2-1 ruling, and what it means for defense contractors", "summary": "The U.S. Court of Appeals for the D.C. Circuit ruled 2-1 on September 25, 2026, to deny Anthropic's petitions against the Department of War's exclusion of Claude from its supply chain, in Anthropic PBC v. US Department of War, No. 26-1049. Judges Gregory Katsas and Neomi Rao formed the majority, with Judge Henderson dissenting, holding that the Department had \"ample support\" to treat Claude as a national security risk under 41 U.S.C. 4713, the Federal Acquisition Supply Chain Security Act, which covers manipulation by \"any person\" and requires no bad motive. The ruling stands alongside an August 27 decision by the Northern District of California that set aside a separate supply chain risk label under 10 U.S.C. 3252, which requires an \"adversary\"; the exclusion followed Anthropic's refusal to drop contract limits barring use of Claude for lethal autonomous warfare and mass surveillance of Americans, and a March 6 Department memo ordered Anthropic products off its systems within 180 days.", "body_md": "# Why the Pentagon's Claude ban survived in Washington after losing in California: the two laws, the 2-1 ruling, and what it means for defense contractors\n\nOn September 25 the D.C. Circuit denied Anthropic's petitions against the Department of War's decision to pull Claude from its supply chain. A month earlier a federal judge in San Francisco set aside a different 'supply chain risk' label on the same company. This page explains why both rulings can stand at once, what the ban covers, and what is still open.\n\n**This explains reporting by**\n\n[US Court of Appeals for the D.C. Circuit, Anthropic PBC v. US Department of War, No. 26-1049, decided September 25, 2026 (opinion PDF)](https://media.cadc.uscourts.gov/opinions/docs/2026/09/26-1049-2194984.pdf).\nRead the original first:\n\n[https://media.cadc.uscourts.gov/opinions/docs/2026/09/26-1049-2194984.pdf](https://media.cadc.uscourts.gov/opinions/docs/2026/09/26-1049-2194984.pdf)\n\n## In one minute\n\n- The D.C. Circuit ruled 2-1 on September 25 that the Secretary of War acted within his power when he excluded Claude from the Department's supply chain. Judges Katsas and Rao formed the majority; Judge Henderson dissented.\n- The exclusion followed Anthropic's refusal to drop two contract limits: no use of Claude for lethal autonomous warfare and no mass surveillance of Americans. The Department wanted 'all lawful uses'.\n- A March 6 Department memo ordered Anthropic products off its systems within 180 days and barred contractors from using them in their work for the Department.\n- The California ruling from August 27 set aside a label under a different law, 10 U.S.C. 3252, which requires an 'adversary'. The D.C. court said the law used here, 41 U.S.C. 4713, is broader and needs no bad motive.\n- Anthropic says it is 'considering all options, including further review.' Nothing in the ruling limits ordinary commercial use of Claude outside Defense Department work.\n\n## What the court decided\n\nThe opinion, written by Circuit Judge Gregory Katsas and joined by Judge Neomi Rao, rejects all three of Anthropic's challenges: that the exclusion was arbitrary, that the statute did not allow it, and that it broke the Constitution. It ends: \"Accordingly, we deny the petitions for review.\"\n\nThe core finding is short. The court says the Department had \"ample support\" for concluding that keeping Claude in its information systems, \"by the Department or its contractors,\" was a national security risk covered by the law.\n\nThe court's reasons come from the record. It says Claude's built-in restrictions had, more than once, stopped it from doing tasks government users asked for, including queries from the CDC about infectious disease research. It also cites a dispute over whether Anthropic's contract allowed a contractor to use Claude in an overseas military operation, which the Department says left it unsure Claude would work when needed.\n\nOn the First Amendment claim, the majority says the exclusion was about Anthropic's refusal to accept a contract term the Department called essential, not about Anthropic's public support for AI regulation.\n\n## How both rulings can be true at once\n\nThis is the part most coverage skips. There were two separate government actions under two separate laws.\n\n- 10 U.S.C. 3252 defines supply chain risk as the risk that an adversary may sabotage or subvert a system. On August 27, the Northern District of California set aside the label under this law. The D.C. court says it has \"no quarrel\" with that ruling, including its finding that Anthropic acted with no bad motive.\n- 41 U.S.C. 4713, the Federal Acquisition Supply Chain Security Act, defines the risk as one that \"any person\" may sabotage, extract data, \"or otherwise manipulate\" a covered product. The majority reads \"otherwise manipulate\" broadly enough to cover a supplier that can change how its model behaves, even with no bad intent.\n\nSo one label fell because Anthropic is not an adversary, and the other stands because this law does not require one. That is why the rulings do not cancel each other, and why the California win did not end the ban.\n\n## What the dissent says\n\nJudge Karen LeCraft Henderson would have ruled for Anthropic on the statute alone. Her reading is that \"manipulate\" in that list means intentionally subversive, deceptive acts, the same kind of thing as sabotage.\n\nUnder that reading, a company that openly writes its usage limits into a contract is not manipulating anything. It is telling the customer exactly what it will and will not do. Two judges disagreed, so the ban stands, but the dissent gives Anthropic an argument if it asks the full court or the Supreme Court to review.\n\n## What a covered procurement action reaches\n\nThe statute lets an agency bar contracts with a supplier and bar subcontracts that use that supplier to perform work for the agency. The Department's March 6 memo applied that: remove Anthropic products from Department systems \"as soon as practical,\" within 180 days, and no contractor use of Anthropic products in work for the Department.\n\nIn plain words: if a company does work for the Defense Department, Claude cannot be part of that work. The ruling does not say anything about a company's other, non-defense work, and it does not touch ordinary commercial customers.\n\nThe tricky part for IT providers is that Claude is not always a separate product. It can sit inside other tools as the model behind a feature. That is where a defense client can break the rule without knowing it.\n\n## The timeline\n\n- January 9, 2026: Secretary Hegseth's AI strategy tells the Department to buy AI \"free from usage policy constraints\" and to write \"any lawful use\" into contracts.\n- February 26: Anthropic refuses to drop its two limits. Dario Amodei says fully autonomous weapons are not yet reliable enough and mass domestic surveillance is incompatible with democratic values.\n- March 3 and 4: the Secretary signs the determination and notifies Anthropic. March 6: the removal memo goes out. March 9: Anthropic petitions the D.C. Circuit.\n- April 8: the court denies a stay but speeds up the case. May 19: oral argument. June 3: the Secretary denies reconsideration.\n- August 27: the California court sets aside the separate 3252 label. September 25: the D.C. Circuit upholds the 4713 exclusion, 2-1.\n\n## Who is affected\n\n| Case | Status | \n|---|---|\n| Defense Department systems | Ordered to remove Anthropic products within 180 days of the March 6 memo. The ruling leaves that order in place. | \n| Contractors doing Defense Department work | Barred from using Anthropic products in that work, per the March 6 memo the court describes. | \n| Commercial Claude customers with no defense work | Not addressed by the ruling. Nothing in the opinion restricts ordinary commercial use. | \n| The separate 10 U.S.C. 3252 label | Set aside by the Northern District of California on August 27. The D.C. court did not disturb that ruling. | \n\n## What to do\n\n- List every client that does Defense Department work, as a prime contractor or a subcontractor.\n- For each one, list the AI tools that touch that work, including products that use Claude as the model under the hood.\n- Where Claude touches defense work, move that work to an approved tool and write down when you did it.\n- Keep defense work and commercial work in separate tenants or workspaces, so a tool allowed for one does not leak into the other.\n- Watch for an Anthropic request for full-court or Supreme Court review. Until a court says otherwise, treat the ban as in force.\n\n## What is still unknown\n\n- Whether Anthropic will ask the full D.C. Circuit or the Supreme Court to review. It says only that it is 'considering all options, including further review.'\n- The exact scope statement the Department sent Anthropic on March 19. The opinion refers to it but the record documents are not public in full.\n- How the Department treats products that embed Claude as one of several models. The opinion does not address this, so the reading on this page is ours, not the court's.\n- The overseas operation at the center of the dispute. The Department did not name it; Anthropic put media reports in the record tying it to the January 3 operation in Venezuela, which the court repeats as a report, not a finding.\n\n## Sources\n\n[AI News Report](https://theainewsreport.com/)· every headline, every morning.", "url": "https://wpnews.pro/news/why-the-pentagon-s-claude-ban-survived-in-washington-after-losing-in-california", "canonical_source": "https://theainewsreport.com/2026-09-25-pentagon-claude-ban-appeals-court-two-rulings.html", "published_at": "2026-09-25 16:46:12+00:00", "updated_at": "2026-09-25 16:59:57.116780+00:00", "lang": "en", "topics": ["ai-policy", "artificial-intelligence", "ai-safety"], "entities": ["Anthropic", "Claude", "US Department of War", "US Court of Appeals for the D.C. 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