Judge Rita Lin vacates the Pentagon’s supply-chain label on Anthropic

U.S. District Judge Rita Lin ruled on Thursday that the Defense Department broke the law when it branded Anthropic a supply-chain risk. The 59-page opinion, filed in the Northern District of California, vacates Secretary Pete Hegseth's 27 February designation and makes permanent an injunction that had paused the penalties since March.

Lin wrote that the empty invocation of national security is not a blank check to punish government critics. She found that the broad measures against the company that builds Claude were illegal and baseless. The Pentagon kept talking to Anthropic about work even after the label went on. None of that, she said, fits a genuine fear that the firm would poison its software.

The designation was the first time a U.S. company had been publicly tagged as a supply-chain risk under a procurement statute written to block foreign sabotage of military systems. Hegseth used it to lock Anthropic out of federal contracts and to bar military suppliers from buying its tools. Lin also struck sanctions that nine agencies had stacked on top of that order, including Treasury, State and Homeland Security.

The fight started when Anthropic chief executive Dario Amodei refused terms the department wanted on how Claude could be used. The company objected to mass surveillance and to autonomous armed drones. Trump and Hegseth answered by calling the firm a national-security problem. Anthropic sued, arguing First Amendment retaliation and due process defects, and saying the statute does not reach an American vendor.

Lin, a Biden appointee, granted Anthropic summary judgment in part. She declared the challenged actions unconstitutional retaliation for protected speech and a due process violation. She permanently enjoined the named defendants from enforcing them. She also said the Department of War remains free to choose another AI vendor. The ruling does not force the Pentagon to buy Claude. It only stops the government from using a sabotage statute as a public punishment.

An Anthropic spokesperson welcomed the finding that the designation was unlawful. The department did not issue an immediate comment. Officials told reporters the government is expected to appeal. A related case is still moving.

The commercial stakes sit in the billions, according to the company's filings, because the label spilled past the Pentagon into civilian agencies and into contractors who feared secondary penalties. Federal buyers who had paused Claude deployments now have a court order that those pauses cannot rest on the vacated designation. They can still walk away for other reasons.

The opinion also records a factual finding that matters for later cases. Lin said the record showed a desire to make a public example of Anthropic for arrogance in criticizing the administration, not an articulable basis to believe the model would be sabotaged. That sentence will be quoted in every brief that challenges a security label used against a domestic firm.

What happens next is an appeal and a contracting market that has to re-price Claude without the blacklist. The Pentagon can still refuse the product. It cannot keep the supply-chain stamp that Lin struck out.