Anthropic Asks D.C. Circuit to Rehear Pentagon Supply-Chain Risk Case

Anthropic PBC filed a petition on October 13, 2026 asking the U.S. Court of Appeals for the D.C. Circuit to rehear a divided panel’s decision that upheld the Department of War’s designation of the artificial-intelligence company as a national-security supply-chain risk.

The petition for panel rehearing or rehearing en banc was filed under Federal Rule of Appellate Procedure 40 in the consolidated cases Anthropic PBC v. U.S. Department of War and runs 3,894 words according to its certificate of compliance. It was signed by Wilmer Cutler Pickering Hale and Dorr LLP attorneys including Kelly P. Dunbar, who argued the case for Anthropic.

The filing challenges a September 25, 2026 judgment that denied Anthropic’s petitions for review of the designation. Judge Katsas wrote the court’s 43-page opinion for a panel that also included Judges Henderson and Rao, and Judge Henderson dissented in an eight-page opinion; the clerk withheld issuance of the mandate the same day.

Background of the Designation

The Department of War designated Anthropic a supply-chain risk under the Federal Acquisition Supply Chain Security Act of 2018 after the company refused to remove contractual prohibitions on using its Claude models for lethal autonomous warfare and mass surveillance of Americans. As the petition recounts, Anthropic CEO Dario Amodei met Secretary of War Pete Hegseth on February 24, 2026, and Hegseth demanded that Anthropic accept an “all lawful uses” contract term by February 27. On February 27, 2026, President Trump ordered all agencies to immediately cease using Anthropic’s technology, and Hegseth announced the designation decision on social media while directing Anthropic to keep providing Claude to the Department for up to six months.

Hegseth issued the formal determination on March 3, 2026, and the Department notified Anthropic the following day. Anthropic petitioned the D.C. Circuit for review on March 9, 2026. After Hegseth denied reconsideration on June 3, 2026, a second petition was consolidated with the first on June 24, 2026.

Statutory and Procedural Challenges

The petition first challenges the majority’s interpretation of the statute, which defines supply-chain risk to include the risk that a person may sabotage, maliciously introduce unwanted function, extract data, or “otherwise manipulate” a covered article. According to the petition, the majority read “otherwise manipulate” to mean arrange, operate, or control regardless of any subversive intent, so that the statute “turns on what Anthropic does, not why Anthropic does it.” Anthropic argues that reading conflicts with the Supreme Court’s 2024 decision in Fischer v. United States, under which an “otherwise” clause takes meaning from the specific terms that precede it.

The petition argues the majority’s reading has no limiting principle because every contractor arranges, operates, or controls its products. It quotes Judge Henderson’s dissent for the proposition that contractors now face a stark choice: “Agree to the Secretary’s demands or risk being designated a national security threat.” The petition also contends the majority improperly sustained the designation on a rationale the Secretary did not invoke: the Secretary had cast Anthropic as a “hostile party” with a motive to disrupt U.S. military operations, while the majority found “no reason to doubt” Anthropic’s “noble intentions.” Under the Supreme Court’s 2015 decision in Michigan v. EPA, the petition argues, courts may uphold agency action only on grounds the agency itself invoked.

The statute requires pre-designation notice and an opportunity to respond, which the petition says the Secretary bypassed by invoking an urgent national security interest in a single conclusory sentence. The petition states that the majority deemed the procedural violations harmless because earlier process “would not have affected” the Secretary’s decision. Anthropic argues that the law’s judicial-review provision, which commands that the court “shall hold unlawful” covered actions taken in defiance of required procedures, leaves no room for a judge-made harmless-error rule. The petition cites the Supreme Court’s 2026 decision in Trump v. Cook, which held that an action taken without required process was void from the start, and its 2001 decision in Alabama v. Bozeman.

Constitutional Claims and Pending Posture

On due process, the petition argues that D.C. Circuit precedent requires notice and an opportunity to respond before a national-security designation, even for putative foreign terrorist organizations, absent a showing of particularized need. It cites the court’s 2001 National Council of Resistance of Iran decision, its 2010 People’s Mojahedin Organization of Iran decision, its 2014 Ralls decision on foreign-investment review, and its 2026 Hesai decision. The petition argues the Department’s conduct belies any pressing need for immediate action, because the Department had long known of Anthropic’s safety commitments, kept negotiating after the determination, and kept Claude in military operations for up to six months. It also states the designation rested on a claim, later abandoned, that Anthropic could alter or shut off Claude after deployment on classified systems.

On the First Amendment, the petition states that the majority agreed Anthropic engaged in protected expression and suffered adverse action yet found no causal connection between the two, discounting Hegseth’s social media post that accused Anthropic of “sanctimonious rhetoric” and “virtue-signaling” and criticized its “ideology.” The petition notes that on August 27, 2026, the U.S. District Court for the Northern District of California held that a parallel supply-chain designation issued under a separate Defense Department statute was a direct response to Anthropic’s public rejection of the Department’s contracting position, and found “direct evidence that Anthropic’s speech” substantially motivated that designation. The petition describes the two results as irreconcilable constitutional rulings on related designations issued by the same Secretary on the same day.

The petition also notes that the D.C. Circuit’s jurisdiction over challenges under the 2018 law is exclusive, which it says leaves the panel decision as the last word short of Supreme Court review, and that fifteen amicus briefs, from trade associations, former national-security officials, 149 former judges, civil-liberties organizations, and AI professionals, were filed in the case. The court’s docket shows the rehearing petition was served and entered on October 13, 2026, and that the clerk’s order withholding the mandate has stood since September 25, 2026.