Appeals court upholds the Pentagon's exclusion of Claude from its supply chain
The US Court of Appeals for the D.C. Circuit denied Anthropic's petitions on September 25, 2026, in a 2-1 decision. The exclusion bars contractors from using Anthropic products in their work for the Department of War. A California district court had found a parallel designation unlawful, and the appeals court said that finding does not decide this case.
Source
Anthropic PBC v. U.S. Department of War, No. 26-1049, opinionCourtListener — RECAP · Original published September 25, 2026
The ruling leaves in place the decision Secretary Pete Hegseth made on March 3, 2026, under the supply chain security law of 2018. It matters most to companies that build for the Department of War and had Claude in their stack.
What the exclusion covers
The department excluded Claude after Anthropic refused to relax contract terms that bar its use for lethal autonomous warfare and mass surveillance of Americans.
A memo dated March 6, 2026, ordered Anthropic products removed from department systems within 180 days at the latest. The same memo prohibited contractors from using those products in their work for the department.
Why the court sided with the department
Judge Gregory Katsas wrote the opinion, joined by Judge Neomi Rao. The court read the definition of supply chain risk in section 4713 as covering any person, not only adversaries, and as requiring no bad motive.
On that reading, the court held that the department's concern about Anthropic keeping Claude from performing lawful tasks the department requested was enough. The opinion also rejected Anthropic's due-process and First Amendment claims.
Two courts, two statutes
The Northern District of California had found the designation under section 3252 unlawful, because that section requires hostile intent. The appeals court said it has no quarrel with that conclusion but that it does not control a designation under section 4713.
Judge Karen Henderson dissented. She read section 4713 as aimed at deliberate sabotage or eavesdropping, not at a contractor openly enforcing use restrictions the government dislikes.
What comes next
According to Ars Technica, Anthropic can ask the full appeals court to rehear the case or petition the Supreme Court.
„Accordingly, we deny the petitions for review.“
Sources
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