Judge Rita Lin vacates the Pentagon’s supply-chain blacklist of Anthropic

U.S. District Judge Rita Lin ruled on Thursday night that the Pentagon broke the law when Defence Secretary Pete Hegseth labelled Anthropic a national-security supply-chain risk and told military contractors to stop doing business with the company. The 59-page opinion in Anthropic PBC v. U.S. Department of War, case 26-cv-01996 in the Northern District of California, calls the measures “illegal and baseless” and treats them as retaliation for speech, not as a documented sabotage threat.

Hegseth issued the designation on 27 February after Anthropic chief executive Dario Amodei refused to give the Department of Defense unrestricted use of Claude for purposes the firm said included mass surveillance and armed autonomous drones. The administration answered by placing a U.S. company on a list written for foreign sabotage of military systems. It was the first public use of that procurement statute against an American firm. Nine agencies, including Defence, Treasury, State and Homeland Security, then added their own bars.

Lin had paused the penalties in March. Thursday’s order makes the halt permanent and vacates the contractor ban under the Administrative Procedure Act as arbitrary, capricious and not in accordance with law. She granted Anthropic summary judgment on the First Amendment and due-process claims and declared that the challenged actions punished “constitutionally protected expressive activities.” She also wrote that the empty invocation of national security is not a blank cheque to punish government critics.

The factual finding that will travel is sharper still. Lin said the record showed a desire to make a public example of Anthropic for “arrogance” in criticising the administration, not an articulable basis to believe the company would sabotage its own model. That sentence is the difference between a procurement dispute and a constitutional case.

What the order does not do is force the Pentagon to buy Claude. Lin said the Department of War remains free to pick any AI vendor it wants. The ruling strips the extra-legal machinery: the supply-chain-risk stamp, the order that all military contractors cut ties, and the parallel sanctions at the other eight agencies. Anthropic can sell to civilian departments again. Defence can still walk past the vendor on the next contract.

An Anthropic spokesperson called the designation unlawful and said the company still wants to work with the government on national-security uses. The department did not issue an immediate detailed reply. Politico and Wired both reported that an appeal is expected. A related case remains on the docket.

The statute at issue was built for Huawei-style hardware in ships and radios. Applying it to a San Francisco model lab because the lab set use limits is the precedent Lin rejected. If the Ninth Circuit or the Supreme Court later disagrees, every AI vendor that bargains over acceptable-use policies will face the same list. If the ruling stands, the government keeps the simple tool it always had: it can just not buy the product.

Amodei’s red lines were specific. He did not want Claude wired into systems that pick targets without a human in the loop or into domestic surveillance at population scale. The administration called those limits a threat to “all lawful purposes.” Lin treated the disagreement as speech about government policy. That is the holding vendors will quote in the next fight, whatever the appeal does to the remedy.

For now the blacklist is off the books. The models are still the company’s to licence. The Pentagon is still free to call someone else.