The Pulse
Anthropic Asks D.C. Circuit to Rehear Pentagon Risk Ruling
Anthropic asked the full D.C. Circuit on October 13 to reconsider a 2-1 ruling upholding the Pentagon’s supply-chain risk designation. The company argues the decision misreads federal procurement law and allows retaliation for its AI-safety
AI.info Team · Written with AI ·
On Tuesday, October 13, Anthropic asked the full U.S. Court of Appeals for the D.C. Circuit to reconsider a ruling that upheld the Pentagon’s designation of the AI company as a national-security supply-chain risk. The request challenges a 2-1 decision issued September 25 by a three-judge panel. Anthropic says the ruling lets the department act without a pre-designation hearing and punishes the company for its public position on AI safety, according to The Next Web’s account of the filing.
Anthropic challenges the panel’s reading of procurement law
The dispute turns on a federal procurement statute that allows agencies to restrict suppliers when they pose a risk to government information-technology systems. The panel majority, in an opinion by Judge Gregory Katsas joined by Judge Neomi Rao, held that the Pentagon had enough support to exclude Claude from its supply chain. It reasoned that Anthropic’s ability to set limits on how Claude works could create a risk to military operations even without evidence of malicious intent.
Judge Karen LeCraft Henderson dissented. The panel’s ruling rejected Anthropic’s statutory and constitutional challenges, including its claim that the designation retaliated against protected speech. In its rehearing petition, Anthropic says the majority expanded a law aimed at hostile foreign actors to cover government contractors broadly. Reuters quoted the company’s argument that the decision turned a federal law “aimed at hostile foreign actors into one that presumptively reaches every government contractor.”
Two limits on military use set off the dispute
The contract fight centers on Anthropic’s refusal to permit Claude’s use for mass surveillance of Americans or fully autonomous weapons. The company sought to keep those limits while continuing to support other lawful national-security uses. The Pentagon demanded broader permission for military use, and negotiations broke down.
The panel’s September decision said the Department of War had concluded that those restrictions could interfere with the function or use of its systems. The court also found that Anthropic had received notice and an opportunity to challenge the designation after it took effect, and that the company had not shown prejudice from the lack of an earlier response window. The ruling came under the Federal Acquisition Supply Chain Security Act of 2018, codified at 41 U.S.C. § 4713.
A separate California ruling reached a different result
Anthropic points to a parallel case in California, where a federal judge in August set aside a separate supply-chain designation issued under a different statute. The D.C. Circuit acknowledged that ruling but said the two laws use different definitions of “supply chain risk.” Under the narrower statute applied in California, the court said, the definition requires bad motive; the D.C. Circuit found no such requirement in the law before it.
The two cases therefore address related government actions through distinct legal routes. The California ruling does not automatically resolve the D.C. Circuit case, whose September judgment remains the decision Anthropic now wants reconsidered. The company’s petition asks the court to revisit that judgment, rather than asking a court to rule on a new Pentagon action.
The designation’s reach extends beyond Claude’s direct use
The D.C. Circuit case concerns the Pentagon’s authority to exclude Anthropic from its supply chain and restrict Claude’s use in work for the department. That is distinct from the broader consequences Anthropic has said the designation could have for its business and reputation. The panel’s opinion upheld the procurement action under the statute before it; the rehearing request argues that the panel read that authority too broadly and overlooked the company’s objections to the process.
The court’s September 25 opinion records the majority’s conclusion that the department could act on the potential effects of Anthropic’s restrictions, while rejecting the company’s First Amendment claim. The opinion and dissent are part of the case record the full court is being asked to revisit. The immediate question is whether the appeals court will grant that request.