The D.C. Circuit upholds Anthropic's exclusion

On 25 September 2026 the D.C. Circuit, two judges to one, denied Anthropic's petitions against the exclusion of Claude from the Department of War's supply chain under the Federal Acquisition Supply Chain Security Act of 2018 (41 U.S.C. § 4713). It held the Secretary's decision not arbitrary and not a breach of due process, and, on the First Amendment, that the exclusion followed from Anthropic's refusal to accept a contract term, not from its criticism. Judge Henderson dissented, reading the statute's definition of risk as not covering Anthropic.

The case. No. 26-1049, consolidated with No. 26-1162; argued 19 May 2026 and decided 25 September before Judges Henderson, Katsas and Rao. The opinion of the court is Judge Katsas's (pages 4 to 43 of 51), the dissent Judge Henderson's (44 to 51). The subject is Secretary Hegseth's determination of 3 March 2026, of which Anthropic received the letter on 4 March; on 6 March the Department ordered Anthropic's products removed from its systems as soon as practical and within 180 days. Anthropic petitioned on 9 March; on 8 April the court denied a stay but expedited review; on 3 June the Secretary denied reconsideration, a second petition was filed on 17 June and the cases were consolidated on 24 June. What the court held. It has jurisdiction. The Secretary's three determinations under § 4713, that the exclusion was necessary to protect national security, that no less intrusive measures were reasonably available and that urgent action was needed, were reasonable and reasonably explained. For support it pointed, in its words, to restrictions built into Claude that more than once stopped tasks government users asked for, and to a dispute over whether contractual prohibitions barred use of Claude in an ongoing overseas operation. The definition of "supply chain risk" includes "otherwise manipulate" and requires no bad motive. Due process was met: the company was promptly notified and had a fair chance to contest. On the First Amendment Anthropic met the first two elements (its advocacy is protected, the exclusion was adverse) but not the third, causation: the Department, the court found, excluded it for refusing to accept an "all lawful uses" term, not for the position it advocated. The dissent. Judge Henderson held that everything turns on the words "otherwise manipulate" in the definition, that they mean deliberately subversive acts, not a contractor's honest and open enforcement of restrictions the government dislikes, and that Anthropic therefore falls outside the definition. On the California ruling. The majority notes that § 3252 is narrower (it speaks of an "adversary" and needs bad motive) and has no quarrel with the California court's conclusions under it, including that Anthropic acted with no such motive. But that court's findings on arbitrariness and urgency under § 3252 do not decide the questions under § 4713, Anthropic's argument that the ruling is preclusive was rejected, and under 41 U.S.C. § 1327(b)(1) this court has exclusive jurisdiction over actions under § 4713. After the ruling (from the docket). On 25 September the clerk withheld the mandate; on 13 October Anthropic petitioned for rehearing en banc; there is a clerk's order of 15 October and, on 23 October, an order of the panel (per curiam) whose content was not read. On 26 October the government gave notice of appeal to the Ninth Circuit from the California court's order, order of final relief and judgment of 27 August (ECF 250 to 252). What the record does not claim. The briefs and appendix and the orders and petition of 13, 15 and 23 October were not read; the statutory reasoning of part IV and the body of the dissent are reported from the introduction and conclusion, not line by line. The record does not say whether en banc review was granted.