# Court upholds Pentagon’s ability to blacklist Anthropic over Claude feature dispute

> The D.C. Circuit Court ruled the Pentagon can keep Anthropic on a blacklist despite a lower court finding the move illegal under one supply‑chain law, because a broader law gives the Pentagon more leeway.

Oossa · 2026-09-29 · https://oossa.com/en/court-upholds-pentagon-s-ability-to-blacklist-anthropic-over-claude-feature-disp

The Department of Defense said it could blacklist the AI startup Anthropic after the company refused to turn on certain Claude features for a Pentagon project. A federal appeals court in Washington, D.C., agreed that the Pentagon’s action is allowed under a different supply‑chain law. The ruling came on September 25, 2026, and it leaves the blacklist in place while the lower court’s earlier decision is limited to a narrower statute.

## How we got here

In August 2026 a judge in the Northern District of California found that the Pentagon’s blacklist violated 10 U.S.C. § 3252. That law limits “supply‑chain risk” to cases where an adversary deliberately sabotages or inserts malicious code. The judge said Anthropic had not shown any bad intent, so the blacklist under that rule was illegal.

The Pentagon, however, also cited 41 U.S.C. § 4713, a broader authority that does not require proof of malicious intent. Congress gave the D.C. Circuit exclusive jurisdiction to interpret that law for defense procurement. The appeals court said the lower court’s focus on intent was irrelevant under § 4713, and therefore the blacklist could stand.

## What happens next

The Pentagon can continue to treat Anthropic as a “supply‑chain risk” under the broader statute. Anthropic may still try to challenge the decision, but any further appeal must go through the D.C. Circuit, not the district court. The case highlights how the government can use different legal definitions to restrict AI vendors it deems risky.

For now, Anthropic’s Claude model will remain unavailable for any Pentagon systems that rely on the blacklisted features. Other AI companies watching the case may adjust their contracts with the Defense Department to avoid similar designations.

## The facts

- The D.C. Circuit issued its ruling on September 25, 2026.
- The lower court decision was issued in August 2026 in the Northern District of California.
- The Pentagon cited 41 U.S.C. § 4713 to justify the blacklist.
- The earlier ruling relied on 10 U.S.C. § 3252, which requires proof of malicious intent.
- Congress gave the D.C. Circuit exclusive jurisdiction over procurement actions under § 4713.

## Why it matters

The ruling means the Pentagon can keep certain AI tools off its systems even if the vendor shows no wrongdoing. Companies that sell AI to the government may face stricter contract terms or sudden bans. For taxpayers, it could affect how quickly new AI capabilities are deployed in defense projects, potentially slowing innovation or raising costs if fewer vendors are eligible.

## Sources & references

1. [Court rules Pentagon can blacklist Anthropic for refusing to enable Claude features](https://arstechnica.com/tech-policy/2026/09/court-rules-trump-can-blacklist-anthropic-for-refusing-to-enable-claude-features/) – Ars Technica, 2026-09-25

Last updated: 2026-09-29