Judge rules Pentagon Anthropic blacklist unlawful

A federal judge has ruled that the Pentagon's designation of Anthropic as a supply-chain risk was unlawful, granting the company summary judgment in part on First Amendment and administrative-law grounds.

The order, filed August 27 by Judge Rita F. Lin in the Northern District of California, is a win on the designation itself. A separate order on remedy is still coming, and a parallel case in Washington, D.C., is still open.

Lin granted judgment for Anthropic in part on three theories: First Amendment retaliation (Count II), due process under the Fifth Amendment (Count IV), and Administrative Procedure Act challenges to the Hegseth Directive and the Supply Chain Designation under 10 U.S.C. § 3252 (Count I), as to Defense Secretary Pete Hegseth and the Department of War. She denied Anthropic's ultra vires claim, so the company did not win on every count.

The language is unusually direct for a designation the government defended on national-security grounds. Lin wrote that the measures were "illegal and baseless," that they reflected "a desire to make a public example out of Anthropic for its 'arrogance' in criticizing the government," and that "the empty invocation of national security is not a blank check to punish and retaliate against government critics." The court also found the company "was denied the pre-deprivation process required under the Fifth Amendment." The administrative record the government relied on was thin, a short memo, which is what made the APA arbitrary-and-capricious finding available.

The court also refused to give the government a running start. Defendants asked to stay the forthcoming permanent injunction for seven days. Judge Lin denied that request, and noted that "an order addressing relief will issue separately." The remedy, likely including an injunction against the designation, is being written now, and the government does not get a week's grace before it lands.

The dispute ran on two tracks. Anthropic filed complaints in both California and D.C. in March, and the D.C. suit is still ongoing. Related federal supply-chain-security mechanisms could still leave the company constrained on DoD contracting until that case resolves. The California ruling strikes down the specific Hegseth designation as unlawful retaliation. It does not, by itself, guarantee the contracts flow again.

The precedent is the part that travels. A supply-chain-risk label imposed to punish a vendor's public criticism is First Amendment retaliation a court will strike, and "national security" alone will not shield it. What comes next is the separate relief order, whether the government appeals, and the D.C. case, which is the one that still decides whether Anthropic is actually clear to contract.

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