The D.C. Circuit Court of Appeals today upheld the U.S. Defense Department’s ban on Claude.
The decision comes a month after another federal court ruled that the ban is illegal. The diverging decisions stem from the fact that the matter is governed by two different pieces of legislation. Today’s decision focused on one of the laws, while last month’s ruling pertained to the other.
Last July, Anthropic PBC won a $200 million contract to provide the Pentagon with access to Claude models. Shortly thereafter, the company and the Defense Department started discussing the possibility of expanding their partnership. The plan was to make Claude available through a platform called GenAI.mil.
Anthropic’s user agreement prohibits customers from using Claude to conduct mass surveillance of Americans or build autonomous weapons. The Pentagon sought to replace the relevant clause with a provision that permits “all lawful uses.” Anthropic declined to make the change, which led Defense Secretary Pete Hegseth to ban Claude this past June. The model series became inaccessible to not only Pentagon staffers but also defense contractors.
Anthropic filed its appeal shortly thereafter.
The D.C. Circuit Court of Appeals reviewed whether the Pentagon can ban Claude under a 2018 law known as FASCSA. It enables the Defense Secretary to block a supplier if its technology poses a national security risk. The court ruled 2-1 that the Pentagon had “ample support for” its decision to designate Claude as such a risk. The designation was motivated by Anthropic’s model usage restrictions.
“The company encodes restrictions into Claude that prevent the model from performing tasks that Anthropic wishes to prevent,” reads the ruling. “On more than one occasion, these restrictions have stopped Claude from performing tasks requested by government users.”
FASCSA sets forth rules for how supplier bans may be implemented. Notably, it requires the Pentagon to notify a supplier before blocking it and disclose the reasons for the decision. Anthropic argued that the Defense Department had failed to complete the process in the required manner, but the court didn’t accept its reasoning.
“We respectfully disagree with the court’s decision,” Anthropic said in a statement. “Another federal court has already held the government’s parallel designation unlawful. We remain confident in our position and are considering all options, including further review.”
The August ruling that ordered the Pentagon to lift its ban was issued by the U.S. District Court for the Northern District of California. The judge presiding over the case determined that the move is illegal under the 2011 National Defense Authorization Act. The law sets forth different requirements for supplier bans than FASCSA.
Now that both courts have issued their rulings, multiple appeal paths are available to Anthropic. It can seek a rehearing by either the same three-judge panel that issued today’s decision or the full D.C. Circuit Court of Appeals. According to CNBC, Anthropic could also refer the case to the U.S. Supreme Court.
