Trump administration attempts to punish, ban Anthropic were unlawful, judge rules
A U.S. district court judge mostly sided with Anthropic in its challenge against the Pentagon’s designation of the company as a supply chain risk and attempt by the Trump administration to ban use of its products across the government.
In a 59-page order, Judge Rita Lin of the U.S. District Court for the Northern District of California ruled in favor of the Claude maker on its claims that the administration’s actions violated the First Amendment, the due process clause, and federal administrative procedure statute.
“Though the Department of War is undisputedly free to select the AI vendor of its choice, the evidence demonstrates that the broad measures imposed on Anthropic were illegal and baseless,” Lin said.
Lin’s ruling comes after months of strife between Anthropic and the Trump administration.
The dispute began early this year Anthropic went public with the details of a disagreement with the Department of Defense. While Anthropic said discussions broke down over safeguards that would ensure the technology wasn’t used in mass surveillance or fully autonomous lethal weapons, President Donald Trump fired back that it was an attempt to “strong-arm” the government.
Almost immediately, Trump issued a governmentwide ban on the technology and Defense Secretary Pete Hegseth designated the company as a supply-chain risk to national security. That prompted agencies across the government to begin halting their use of Anthropic’s products.
In response, the Claude maker sued the government in both district and circuit court.
Previously in the district case, Lin already sided with Anthropic in halting the government’s actions from moving forward while the litigation advanced, and her statements at a July hearing indicated she planned to grant the company’s requests for summary judgement.
During that hearing, Lin said the record had “gotten worse for the government” following a record dump in the case that included emails between Anthropic’s Dario Amodei and DOD research and engineering leader Emil Michael leading up to the clash.
The decision Thursday hands the company another win.
“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Lin stated in her decision.
While the disagreement centers on the blow-up earlier this year, one interesting aspect of the litigation was how the government’s actions in a concurrent battle over Anthropic’s Mythos impacted its claims that the company was a national security threat.
The Trump administration restricted Anthropic’s Mythos 5 and Fable 5 systems in June via export controls, claiming that the potential of those models to bypass their security restrictions posed national security concerns. But the administration and Anthropic were able to work out guardrails just a few weeks later, and the restrictions were lifted.
Further, reports suggest the government is using the model. In her decision, Lin cited that complication.
“Even now, the government is discussing collaboration with Anthropic on its new model, Mythos, in an array of sensitive contexts. None of that is consistent with a genuine fear that Anthropic is a saboteur who would poison its software to harm national security,” Lin said.
She concluded that the record shows the government’s actions were an unlawful retaliation against the company under the First Amendment, and that the company was denied its right to notice required under the Fifth Amendment’s right to due process. Lin also found Hegseth’s supply chain risk designation did not follow established processes, rendering it “arbitrary and capricious.”
The only claims where she did not rule in Anthropic’s favor were arguments that the government had acted in violation of separation of powers, and claims against certain agencies that didn’t take action with respect to the ban or only took measures effective in the interim. In those instances, she ruled in favor of the government.
The Justice Department, which represents the government, did not immediately respond to FedScoop’s request for comment on the decision or plans to appeal.
Industry, which had been overwhelmingly on Anthropic’s side, cheered the ruling.
“The court’s decision upholds the rule of law in U.S. public procurement, which is essential for safeguarding America’s status as a world leader in AI innovation by preserving the U.S. government’s longstanding business relationships with the commercial technology sector,” Jason Oxman, president and CEO of the Information Technology Industry Council, said in a statement.
ITI was among the organizations to file an amicus brief in favor of the Claude maker in the district court case.
