The Justice Department filed a notice of appeal on Monday with the U.S. Court of Appeals for the Ninth Circuit, challenging a ruling that lifted the Trump administration's ban on federal agencies using Anthropic's AI. The appeal targets an August decision by U.S. District Judge Rita Lin, who found the government had failed to justify barring agencies from Anthropic's technology.
Lin, of the Northern District of California, issued a 59-page order on August 27. She mostly sided with Anthropic, finding the government's actions were unlawful retaliation under the First Amendment, that Anthropic was denied required notice under the Fifth Amendment, and that Defense Secretary Pete Hegseth's supply-chain risk designation was arbitrary and capricious under the Administrative Procedure Act.
“The empty invocation of national security is not a blank check to punish and retaliate against government critics”— Rita Lin, U.S. District Judge, Northern District of California
The ruling was not a clean sweep for Anthropic. Lin sided with the government on the company's separation-of-powers claims and on claims against agencies that had taken no action on the ban or had taken only interim measures.
Key facts
- 01The Justice Department filed a notice of appeal with the Ninth Circuit on October 26, 2026.
- 02Judge Rita Lin's 59-page August 27 order found the agency ban on Anthropic violated the First and Fifth Amendments.
- 03The White House told agencies on February 27 to stop working with Anthropic, with a six-month phaseout.
- 04A D.C. Circuit panel upheld the Pentagon's supply-chain risk designation 2-1 on September 25.
- 05Anthropic asked the full D.C. Circuit to rehear that separate case on October 13.
The dispute began over contract terms. The Pentagon wanted Anthropic to agree that the military could use its models for all lawful use cases, and Anthropic refused, seeking language that would bar use of its models for autonomous weapons and mass domestic surveillance. President Trump accused the company of trying to strong-arm the government. On February 27, the White House told federal agencies the government would no longer work with Anthropic and gave them six months to phase out its models, and Hegseth designated the company a supply-chain risk to national security.
Anthropic sued on March 9. Lin temporarily blocked the government's actions later that month, and the Justice Department appealed that order in April. At a March hearing, Anthropic said it could lose billions of dollars because of the ban, and its attorney told the court that more than 100 customers had raised concerns about continuing to work with the company.
A parallel case has gone the government's way. On September 25, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit voted 2-1 to uphold the supply-chain risk designation, finding the Department of War acted within its authority under the Federal Acquisition Supply Chain Security Act of 2018. Judge Gregory Katsas wrote the majority opinion, joined by Judge Neomi Rao. Judge Karen LeCraft Henderson dissented, arguing the designation came without any pre-designation process.
That statute sends challenges to supply-chain risk orders to the D.C. Circuit, which gives the September ruling weight alongside Lin's decision. Anthropic petitioned for rehearing by the full D.C. Circuit on October 13.
Monday's appeal lands as Anthropic heads toward a Nasdaq listing under the ticker ANT. The company's S-1 lists its conflict with the Department of War among its risk factors.
The Justice Department did not say in August whether it would appeal Lin's ruling, and it has not publicly laid out the arguments it will make to the Ninth Circuit.
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