Trump Can Blacklist Anthropic Over Claude Limits, DC Circuit Rules

Summary

On September 25, 2026, the U.S. Court of Appeals for the District of Columbia Circuit ruled 2 to 1 that the Trump administration may blacklist Anthropic despite its lack of malicious intent. The majority found Claude’s withheld functions qualify as a supply chain risk under 41 U.S.C. Section 4713, whose references to “any person” and denying technology use cover Anthropic’s restrictions. Judges Gregory Katsas and Neomi Rao, Trump appointees who served in his first administration, formed the majority; Judge Karen Henderson, appointed by George H.W. Bush, dissented. The court said Trump and Defense Secretary Pete Hegseth must balance constrained AI disrupting military operations against unconstrained models hallucinating lethal targets.

In August 2026, Northern District of California Judge Rita Lin, a Biden appointee, found the parallel designation illegal under 10 U.S.C. Section 3252 and unconstitutional under the First Amendment. That statute requires malicious conduct by an adversary, while Section 4713 does not. The DC Circuit accepted that Anthropic acted without bad motive but said Congress gave it exclusive jurisdiction over Section 4713 procurement actions. Henderson argued the law targets deliberate interference or surveillance, not a contractor’s disclosed usage restrictions.

Anthropic sued in March after Trump and Hegseth ordered federal agencies to stop using its products and barred defense contractors from doing business with it; the DC Circuit denied an emergency stay in April. Claude’s safeguards had blocked government requests, while a dispute over an ongoing overseas military operation created uncertainty about performance. Anthropic says the blacklist retaliated for limits on lethal autonomous warfare and mass surveillance of Americans. It may seek full circuit review or petition the Supreme Court. Commerce Secretary Howard Lutnick says relations are now “in tune.”