An Algorithmic Lucidity

Dateline SAN FRANCISCO, 30 July 2026— A hearing was held on a motion for summary judgment in the case of Anthropic PBC v. U.S. Department of War et al. in Courtroom 4 on the 17th floor of the Phillip Burton Federal Building, the Hon. Rita F. Lin presiding.

The case is not going well for the government. Two days after the last hearing in March, Judge Lin issued a preliminary injunction halting the implementation of President Donald Trump's order for federal agencies to stop using Anthropic's technology and preventing the Department of War from designating Anthropic as a supply chain risk. (A separate case involving a different statute is pending before the D.C. Circuit Court, which did not grant injunctive relief to Anthropic.)

With no factual disputes requiring a jury to decide, the case was scheduled to be decided by Judge Lin on the basis of the written record. Anthropic filed their argument for why they should win. Perhaps tellingly, the government's rebuttal explaining why they should win instead ends on a section explaining that "only modest relief is warranted" if Anthropic wins—and Judge Lin asked Anthropic to propose what they think the final judgment should look like.

Meanwhile, in Congress, next year's defense appropriation bill adds language to the statute on the supply chain risk designation that prohibits designating a domestic company as a supply chain risk for declining contract terms.

About a dozen spectators (including the present writer) dotted the gallery Thursday as the parties convened to discuss Judge Lin's homework questions (four out of five of which were primarily directed at the defendant). Anthropic's contingent of ten people took up the long counsel table in the center of the courtroom, while the government's two lawyers sat in counsel overflow seating on the left. Michael Mongan of WilmerHale spoke for the plaintiff. The defense swapped in Department of Justice attorney James Harlow to speak (replacing Deputy Assistant Attorney General Eric Hamilton, who filled that role at the preliminary injunction hearing).

Judge Lin began by saying that the updated record seemed largely as it was at the time of the preliminary injunction—and in some ways, the record got worse for the government. No evidence had emerged that Anthropic had the capability to sabotage a version of their AI model, Claude, after it had been delivered. The Department of War's justification for the supply chain risk designation seemed to rest on the Department's loss of trust in Anthropic due to Anthropic's conduct in refusing to abandon their usage policies to accommodate the Department's desired "all lawful use" terms. "I find that position, if that's really what the government's position is, to be troubling," Judge Lin said.

The first question regarded the defendant's contention that the Pickering framework applied to the present case. The precedent set by Pickering v. Board of Education (1968) says that the First Amendment rights of government employees to speak on matters of public interest need to be balanced against the government's interests as an employer. Judge Lin asked the defendant whether the Pickering framework applies to the government hitting a contractor with a punishment that goes beyond just terminating the contract.

Harlow said that it would depend on the nature of the hypothetical punishment. Pickering distinguishes whether a government is acting in its regulatory capacity as a sovereign, or only as an employer. But in the present case, all actions had been about the government's own information technology systems.

Judge Lin asked, what if it's only a contract termination, but the government says they're making an example of the contractor?

"Yes, Your Honor, Pickering would apply," Harlow said.

Judge Lin asked, even if the purpose is to deter other contractors?

Harlow replied that if the government says what conduct they won't tolerate from a contractor, that's not an exercise of sovereign power.

Judge Lin asked about the case of a secondary boycott (the government boycotting those that didn't boycott the offending contractor).

Harlow said that the Department's position was that there was no secondary boycott in this case.

Suppose there had been, said Judge Lin.

Harlow said that if, hypothetically, the government said that Bank of America couldn't use Anthropic models to write code unrelated to any government contracts, that would be an exercise of regulatory sovereign power and Pickering balancing wouldn't apply.

Judge Lin asked if Secretary of War Pete Hegseth's 27 February Twitter announcement that "Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic" would go beyond Pickering, if it were applied as written, without limitations.

Harlow said he couldn't give a categorical answer, because the hypothetical would apply to the facts of some situation. But we didn't need to resort to speculation, he said: in context, Hegseth wasn't exercising authority beyond applying the supply chain risk designation.

Judge Lin said the case was making her think of a lot of hypotheticals and asked Harlow to bear with her. She thought this should be easy: if the government announced that it was terminating contracts for criticism of President Trump, Pickering would not apply, right?

Harlow said Pickering would apply.

Judge Lin said, suppose the government said, to be clear, this is to prevent unfair criticism of the President.

Harlow said Pickering could handle that case, although it would be hard for the government to meet its burden of showing that its interests as an employer outweighed the contractor's interests in its speech.

"I'm surprised that you can't give a yes to what seems to me to be an easy question," said Judge Lin. What if the government says it's because we can't trust you? Judge Lin supposed that Harlow would say that Pickering still applies.

Yes, Harlow said, but the case would come down to the facts, not just a bare statement of distrust.

Judge Lin asked what Harlow thought of an illustrative scenario posed in part (b) of the homework question. "Imagine that a hypothetical future administration has a contract with a private company to procure drones for surveillance," Judge Lin wrote. If the contractor refused to make lethal drones and the administration put up billboards labeling the contractor and its CEO as "enemies of the state" and warning other companies not to do business with them, would Pickering apply?

Harlow responded in the affirmative: in firing a contractor, the state was acting as an employer, not a sovereign, although the billboards in the hypothetical were veering more towards the use of regulatory power. The government wasn't a monolith; in the present case, the First Amendment analysis of President Trump's government-wide ban on Anthropic was distinct from the Department of War's supply chain risk designation.

Judge Lin gave the plaintiff an opportunity to respond. Mongan said that Pickering didn't apply to this case because the challenged actions were not the day-to-day management activities of an employer. The supply chain risk designation is a national security (thus sovereign) authority. He said that he suspected that the reason the Court wasn't getting clear answers from Harlow is "that my colleague is a very good lawyer," but that even if the Pickering precedent applied, Anthropic's First Amendment claim would still prevail.

Judge Lin asked if the plaintiff had a view on whether the government's actions should be considered separately or as a whole. Mongan said it was fact-dependent in general, but on this record, the White House and the Department of War's actions were clearly linked.

Judge Lin proceeded to her next question for the defendant: would it "eviscerate" First Amendment protections if the government could retaliate against a contractor as long as the government's actions could be described as being due to a breach of trust?

Harlow said no: the Pickering framework would apply to the facts of the case. The Department had risk assessment memos explaining that frontier AI is a black box, not akin to procuring a shipment of rifles that could be disassembled to check that they were manufactured to specifications.

Given that the technology allowed Anthropic to bake its corporate values into its models, the Department needed a greater level of trust in the vendor than it did for military hardware. It wasn't a one-time deal, either, as the Department would need updated models. Judge Lin asked if the situation was that different from other defense contracts: what made AI different from drones? Harlow replied that AI was "staggeringly opaque." Aspects of Anthropic's behavior, such as questions about classified military operations and hostile communications within the company, had given the Department reason to fear that they would insert their "corporate moral judgment" into the product. The Department needed to know if Anthropic saw itself as a partner, and case law granted the government substantial deference on this point.

Given an opportunity to reply, Mongan said that the timeline matters: the risk memo was dated 2 March, but Secretary Hegseth and President Trump's actions were on 27 February. He said he would resist the notion that the opaqueness of modern AI obviates First Amendment protections. Anthropic's usage restrictions had been there from the beginning, and there was no indication that Anthropic took steps to interfere with the Department's operations. Taking a stand on usage restrictions is the last thing a saboteur would do. A central concern earlier in the case had been the possibility Anthropic might remotely sabotage the model after it had been delivered, before that had been shown to not be technically possible. The defendant's shifting rationales were powerful evidence of pretext, Mongan said.

Judge Lin proceeded to her next question: have any federal agencies terminated their contracts with Anthropic or begun winding down their usage of Claude since the preliminary injunction was issued? Harlow said the defendants weren't sure what prompted the question, but that the Department of War was in the process of offboarding Anthropic and would be finished by 30 September. Another agency was also offboarding. Other defendant agencies hadn't said, but many were only using Claude through a pilot program that would expire on 30 August or through third-party providers.

Judge Lin's next question was if any agencies doing national security work had expanded their use of Claude, including the new Mythos model.

Harlow said that the defendants respectfully objected to the question on national security grounds. In any case, any such usage would be irrelevant, since it would have occurred after the challenged actions.

Judge Lin said that the reason she was asking is because it would be inconsistent to expand usage of Claude for sensitive work if Anthropic were untrustworthy. She explained that she used to be a prosecutor; sometimes people's actions after a crime shed light on their motives. Harlow said that he was not authorized to give a substantive answer at this hearing but that the defendant could supply the requested information if the Court found it necessary. Judge Lin said she might issue a written order later.

The last question concerned whether the remedy in this case should include remanding the matter of the supply chain risk designation back to the Department so that they could make a better case for it. Mongan said that that was fine as a formal matter, but as a practical matter, the record was clear that Anthropic was not an adversary of the state.

Then it was time for any closing remarks that the parties wanted to make. Harlow said that the Department was aware of Anthropic's public statements and that the case was not about the company's speech. Regarding the unanswered question about expanded usage of Claude, he said an answer would take some work on the Department's end and asked the Court for a week's time; the difference between two days and a week couldn't matter. Regarding the plaintiff's proposed remedy, Harlow said that any relief should be narrowly tailored to particular actions of particular agencies, and that there was no basis for demanding a compliance report. Regarding the defendant's request for a week, Mongan pointed out that the government had had the homework question since Monday; Anthropic had been suffering unconstitutional harm since February and appreciated the Court and the defendants moving quickly.

Then court was adjourned.

Dateline SAN FRANCISCO, 24 March 2026— A hearing was held on a motion for a preliminary injunction in the case of Anthropic PBC v. U.S. Department of War et al. in Courtroom 12 on the 19th floor of the Phillip Burton Federal Building, the Hon. Judge Rita F. Lin presiding. About 35 spectators in the gallery (journalists and other members of the public, including the present writer) looked on as Michael Mongan of WilmerHale (lead counsel for the plaintiff) and Deputy Assistant Attorney General Eric Hamilton (lead counsel for the defendant) argued before the judge. (The defendant also had another lawyer at their counsel table on the left, and the plaintiff had six more at theirs on the right, but none of those people said anything.)

For some dumb reason, recording court proceedings is banned and the official transcript won't be available online for three months, so I'm relying on my handwritten live notes to tell you what happened. I'd say that any errors are my responsibility, but actually, it's kind of the government's fault for not letting me just take a recording.

The case concerns the fallout of a contract dispute between Anthropic (makers of the famous Claude language model assistant) and the U.S. Department of War. The Department wanted to renegotiate its contract with Anthropic to approve all lawful uses of Claude. Anthropic insisted on keeping terms of use prohibiting autonomous weapons and mass surveillance of Americans, and would not compromise on those two "red lines".

Judge Lin began by describing her understanding of the case. Everyone agrees that the Department of War is free to just stop using Claude, the judge said. What was at issue was three additional actions taken by the government: banning other federal agencies from using Claude (as announced by President Donald Trump), announcing a secondary boycott forbidding federal contractors from doing their own business with Anthropic, and formally designating Anthropic as a supply chain risk. The present hearing was to help the Court decide whether to grant Anthropic's request for an injunction, a court order to stop the government's actions against Anthropic for now until a longer legal process had time to play out. Judge Lin said that she found it troubling that it looks like the Department of War is trying to punish Anthropic for trying to bring public scrutiny to a contract dispute.

The previous day, Judge Lin had assigned homework questions for the lawyers to answer during the hearing, which she proceeded to read.

The first question concerned Secretary Hegseth's 27 February Tweet declaring that "Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic", and that "This decision is final." Judge Lin asked the defendant's counsel if they agreed that Secretary Hegseth lacked the authority to issue such a broad directive.

Hamilton replied that the language needed to be read in the context of the previous sentence, that the Secretary was "directing the Department of War to designate Anthropic a Supply-Chain Risk". A social media post announcing the process of making the supply chain risk designation was not itself legally binding, and that's how the post was understood by the Department.

Judge Lin expressed skepticism: "You're standing here saying, we said it, but we didn't really mean it." How could Anthropic know? Did the Department of War do anything to take back the Secretary's false statement? Hamilton said that the Department had clarified its position in a letter to Anthropic, and in their filings for the present case.

Judge Lin asked about the scope of the directive: if a contractor that sold toilet paper to the military also used Claude Code in their business, would that be acceptable? Hamilton said that it would: "For non-DoW work, that is not the Department's concern." Judge Lin asked why Secretary Hegseth would say what he did if it had no legal effect. Hamilton said he wasn't sure, but that the administration was committed to transparency.

Judge Lin asked the plaintiff's counsel if there was still irreparable harm to Anthropic given that the Secretary's secondary boycott announcement had no legal effect. Mongan said that while he appreciated the concession by his "colleague" (Hamilton), it was a problem that this matter was only being clarified now, on 24 March: Secretary Hegseth's 27 February Twitter directive had been read by millions who would read it to say exactly what it said. The letter served to Anthropic on 4 March had not provided clarity, either. The government's lawyers backing away from the original directive wasn't sufficient; "authoritative clarity" was needed to inform people who have Twitter accounts ("X accounts", Mongan said) but not PACER accounts (PACER being the electronic court records system), who weren't following the present proceedings. Hamilton replied that nothing needed to be clarified; he had already explained how the Department of War understood Hegseth's post and disabused the plaintiff of their interpretation.

The next question concerned Secretary Hegseth's failure to include a statutorily required discussion of "less intrusive measures" that were considered before pursuing the supply chain risk designation in his notice to Congress. Hamilton agreed that the notification to Congress hadn't included that needed detail, but that this had no bearing on whether an injunction should be granted. Anthropic had no right to enforce that requirement as a third party; the matter was between the Department of War and Congress. The Department should be given three days to amend their notification to Congress, Hamilton argued, and it might end up being classified. Mongan replied that the Administrative Procedures Act was clear that the notification was intended for Congress to review the designation; it wasn't supposed to just be an FYI.

The next question was about the "less intrusive measures". The defendant had argued that the Department simply transitioning away from directly using Claude themselves was insufficient to mitigate supply chain risks, because the Department also needed to avoid Claude becoming entwined with the Department's systems through contractors. (For example, Palantir's Maven targeting system had been widely reported to use Claude, but the Department's contract for Maven was with Palantir, not Anthropic.) Judge Lin asked, how broadly did that sweep? If a contractor used Claude Code to write software for the Department, would that be permitted? Hamilton said that that particular fact pattern wouldn't run afoul of the supply chain risk designation. He insisted, however, that the Department shouldn't have to go contract by contract to make sure Claude wouldn't infect DoW systems; Congress had authorized the supply chain risk designation as a tool for this kind of situation.

In reply, Mongan said that the defendant's argument was attempting to normalize the invocation of the supply chain risk designation, which was a narrow authority and not the normal way to respond to contract disputes under existing procurement law. It appeared that Secretary Hegseth had made the decision on 27 February, and people in the Department were scrambling to fulfill the procedural requirements after the fact, and not even successfully.

Judge Lin asked the defendant's counsel what evidence showed that Anthropic had the access to Claude after delivering it to the Department such that Anthropic could engage in sabotage if they wanted to. Hamilton said that the Department would require updates to the software; sabotage could occur then. Judge Lin asked if that the Department would have to accept any updates (as contrasted to Anthropic being able to update the software unilaterally). Hamilton said he wasn't sure whether the Department had taken a position on that; an audit was underway.

Judge Lin commented that most IT vendors presumably had the capability to sabotage their product if they wanted to. "With every software vendor, it is a trust relation on some level," she said. Was it the Department's view that stubbornness in insisting on contracting terms made a vendor a supply chain risk?

No, said Hamilton, it was about raising concerns to the Department about lawful uses of the software. The Department had not been working with Anthropic for long. Anthropic's resistance to approving all lawful uses, combined with their behavior in discussions, had destroyed trust. Judge Lin said that what she was hearing was that Anthropic's offense in the Department's eyes consisted of asking annoying questions. Hamilton said he didn't think that was the best interpretation of the record. The possibility of Anthropic installing a kill switch in the future was an unacceptable risk to the Department. Judge Lin asked why questioning usage terms would lead to installing a kill switch: "I'm not seeing the connection here," she said.

Judge Lin gave the plaintiff the opportunity to respond. "Where to start, your honor," said Mongan. He said that the defendant's rationale seemed to shift. It was hard for him to square the supply chain risk designation with the claim that the problem was Anthropic's resistance to approving "all lawful use". Everything Anthropic had been accused of was above board. Arguing for usage restrictions up front doesn't make one an adversary. A saboteur wouldn't start a public spat. Moreover, Anthropic couldn't alter Claude after it had already been deployed to the government's cloud.

The next homework question (concerning the date of a memo signed by Undersecretary of War Emil Michael) was skipped because it had already been answered in a new declaration by Undersecretary Michael that very day.

The final question was for the plaintiff's counsel: what evidence in the record established that the other federal agencies listed in the complaint besides the Department of War were using Claude? Mongan said that they hadn't introduced such evidence yet, but could add a declaration quickly. Judge Lin asked if the plaintiff could do so by 6 p.m. that day, to which Mongan agreed.

Hamilton objected that the court should not accept late evidence; the plaintiff had chosen to file this suit. Judge Lin said she had been trying to let everyone submit evidence; the government had submitted evidence (Undersecretary Michael's second declaration) that morning. Hamilton asked for at least 24 hours for a potential response, which Judge Lin granted, saying that 6 p.m. the next day was fine.

Then Judge Lin gave both parties a chance to present any additional arguments to the Court, starting with the defendant. Hamilton argued that Anthropic's case failed for at least three reasons: refusing to deal with the government wasn't an expressive act (contrary to the complaint's claims that the government was violating Anthropic's First Amendment rights by retaliating against Anthropic for its expression of safety red lines), the President and War Secretary are entitled to substantial deference in how they run the government, and that the Department would have acted the same way regardless.

In reply, Mongan said that the Court had heard most of the plaintiff's arguments and that they were likely to succeed on the merits should the case continue. He asked if the Court had any questions. There was a back-and-forth between Judge Lin and Mongan about the Pickering factors that I didn't quite follow.

Judge Lin asked whether the plaintiff agreed that the Department of War could stop the use of Claude by contractors. Mongan said he wanted to be cautious about making concessions about hypotheticals. All Anthropic was seeking in an injunction was the status quo of 27 February (before Hegseth's social media post). Nothing would prevent the Department from doing things it could have done on 27 February through ordinary procurement processes. The plaintiff understood the need for deference to national security concerns, but sought to prevent the irresponsible and continuing harm of the Department's actions, harm that didn't just stop at Anthropic, as had argued by the various amicus curiæ.

Judge Lin said she anticipated issuing an order within the next few days, and court was adjourned.