A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit hears arguments in a lawsuit between the Pentagon and AI company Anthropic. The case centers on the Pentagon’s decision to apply a “supply chain risk” label tied to Secretary Pete Hegseth, which Anthropic argues violates legal requirements. During Tuesday’s session, judges question both sides, with lawyers for the Department of Defense defending the government’s position and Anthropic’s attorneys arguing that the label is unlawful. Reporting indicates the judges’ views are not settled, and their questioning suggests division within the panel about key legal questions. The panel includes three judges appointed by Republicans, and their concerns focus on whether the Pentagon’s classification or labeling decision complies with applicable law. The outcome is not determined immediately, and the hearing indicates the court will weigh arguments about the legality of the risk label and the scope of the dispute between the government and the company.