Lawfare Live: A Hearing on Anthropic's Preliminary Injunction Motion

It is 6 20 p.m. Eastern Time on March 24th, 2021, and I am here with Lough Air Senior

“Editor's Roger Parloff, Kate Klanak and Molly Roberts to discuss the hearing that”

just wrapped up on Anthropics request for a preliminary injunction against the Department of Defense, Judge Lynn. I know that Anthropic is very courteously calling this the Department of war in this litigation, but that does not mean that you, an officer of a co-equal branch of government that owes more to Congress, being that Congress both created and named the Department of Defense, and created the Northern District of California Court District Court

on which you serve, you owe more to Congress than you do to the Executive Branch, which has no authority to rename the Department of Defense, and I was very disappointed to see Judge Lynn calling at the Department of War throughout. Today, I'm sure that is not what is interested my panelists about this, but I just wanted to put it out there. I'm against it. Molly, get us started.

“It was a good long hearing. Give us an overview. What happened?”

Yeah, as Michael Mangan, who was the lead counsel for Anthropics at one point, where to begin. So we knew going into the hearing that much of the focus was going to be on the statutory

questions, although Anthropic had also made first amendment retaliation claims and due

process claims, because Judge Lynn had provided this list of questions to go through. And we did hear the parties each address those questions, but it turned out there was substantial focus on the other issues too, not necessarily in terms of how much time was devoted to them in the argument, but Judge Lynn led with saying, "Here are my tentative thoughts,"

“and essentially making it clear that she's interested in disturbed by the first amendment”

retaliation claims. She said it's a fascinating public policy debate, whether the Department of Defense, she said Department of War, but I will say Department of Defense wants to do business with Anthropic. That's not for me to decide that's for Pete Hexeth to decide, but essentially, it was for her to decide whether the government went farther than that determination went too far in designating Anthropic, a supply chain risk and also in

and a lot of the focus of the argument was on this in Pete Hexeth tweeting that not only

could the government not have contracts with Anthropic, but basically imposing a secondary

boycott. So that's essentially what we went through in the hearing. We started with the question of the secondary boycott, but it was a big one. She was asking, "Is the government saying that what Pete Hexeth tweeted was just not true? Was it a false statement? Does it have any legal effect?" And, well, for the Department of Justice, basically said, "Yeah, the secondary boycott card, it doesn't have any legal effect. What had legal effect is a letter that came

later that didn't go so far, that just did this supply chain risk determination." And so then, much of the rest of the hearing had to do with the question of whether that determination was justified. This statute requires that the Department of Defense at the government go to congressional committees and discuss with them any less intrusive measures that have been taken. Again, the government conceited it had not done that in this case. It said it didn't

matter for the purposes of a preliminary injunction that could see did it hadn't done that. And so that was one of the big points that they went through and just going into the question of whether it was reasonable for the government to determine that anthropic was going to engage in sabotage or subversion as an adversary, which is the language in the statute, might do and

whether the statute let the government make that determination based on its refusal that it was

“untrustworthy. So, it's basically what they went through and then at the end kind of circled”

back to those first amendment claims and those due process claims and the hearing ended with

Judge Lynn saying that she will make an order likely make a ruling in the next few days. Right. And she gave the government till tomorrow at six o'clock Pacific time to file a document. So, we know she will not rule before then. But I do expect based on the preliminary thoughts which sounded like almost a draft opinion that a clerk had written that she had scanned before or maybe even had in front of her. She will rule quickly.

Okay. So, I want to take your reusable baskets here. One of the, the secondary boycott basket,

the supply chain risk basket and the we don't want to do business with enthropic basket.

And Kate, it seems to me that we are going to have a, it seems almost very clear to me what she is going to do with the, uh, uh, the basket involving the secondary boycott, which the government didn't even really resist that much. They say this has no legal effect. She says do you mind if I issue an order saying this has no legal effect. He kind of weekly says yes, I mind. But he's really saying, please, God, just enter an order saying, just lock off that and let the rest of it

go into effect. Do you agree with me that the, that there is going to be a preliminary injunction at a minimum that says, uh, you can't input, you can't interpret this as a secondary boycott of companies that are doing business with enthropic, notwithstanding the way the

“keyed headset tweet read. Yeah, I think that that's certainly going to be the case. Um, and I”

also think, um, and, you know, Roger and I were just discussing at the head of the show before like we kind of, we went live that, um, I think that like I was a little surprised, um, we were discussing before this all started. And, um, Alan, Rosenstein and I were kind of chatting in our, in our Slack about the fact that the list of issues and the questions that the judge focused on made it seem like she had absolutely just mentioned Alan Rosenstein. Oh, yes, and I am not the only one to

mention. Yeah, because because I'm a leader, I heard that a judge Lynn specifically called out professor. No, it was, it was a council. It was in drop a council. Oh, yes, it said it was useful on this point. Yeah, it's very useful on this point. So, Rosenstein has an a brief that is very useful on this point. Uh, yes. There we go. I woke Alan up and Sweden probably by texting him so many times. This isn't happened. Um, but anyways, I was going to say that like, you know, Alan has said

for a while that he doesn't think that this is, this is a typical, chronic Rosenstein disagreement.

He thinks it's going, it's not going to be on the first amendment issues. They're not going to

“reach them. And I think that those were compelling and interesting. Um, but conceded that probably”

after seeing the questions at the judge that the judge released today prior to the hearing that she wanted to hear from council on that that wasn't going to happen. And then as Molly kind of was summarized, um, they she opened with basically like, oh, I'm asking all of this in service of this question, which is that I'm very concerned about the retaliatory nature and the due process questions. And I mean, I kind of like raised my eyebrows to hear that. Um, I wasn't expecting

that maybe it would even be talked about extensively. Um, and so then I think that, you know, the it was just a very, to to my ear, um, it was just a very, um, a little bit tedious hearing and that it was kind of went through what should be kind of, um, just not really huge issues and stational interpretation, um, given the factual record, um, and just, you know, the judge proceeded incredibly cautiously, um, on this and just really like kind of worked to establish the record

that they were arguing and what they were not arguing as you said. Um, and I think at the end of the

“day that, um, she did that on all of the kind of the statutory claims and there just there isn't a”

ton there. I really did like the moment, um, that the, uh, the government kind of was like laying out the harm that had been done by, um, by excess, uh, to the company with his tweets and, and things

like that and said, you know, 13 million people saw this on Twitter, uh, there aren't 13 million

people who are going to be subscribing to Pacer, um, and able to see that like now, uh, now that the government's lawyer has conceded that this was just bluster, um, and that this wasn't an actual real threat. And I mean, to his point, 13 million people don't need to see it, even the the lawyers for the company is that feel like they were threatened by headsets, um, by headsets words. Those would, I mean, they do have access to Pacer, but they still might not be kind of

checking, and this isn't necessarily enough of an assurance without a preliminary junction behind it.

So, um, my guess, uh, just to put it kind of on the table is that this is a PI and it is on first

amendment grounds, which is surprising. Um, and we can talk more about that in a second. All right, so Roger, the, you know, she sort of lops off the, this preliminary, you know, the stuff that's about the secondary boycott, uh, and then, and Thropic, of course, concedes that the government's free to cut them off and not do business with them. So it seems to me where the action is in this case is going to be on this question of the supply chain risk designation,

right, which is the one area where one side or the other didn't really concede anything, either concede that the, the headset that action has no legal force or concedes that he's within

“his right to do it. Did you get a sense of where you think she is on the integrity of that designation?”

Well, my impression and, and the, you know, Kate mentioned these questions that she put out last night, and they did all, they almost all focused on the statute, which is, um, like, does this even apply here? And, and part of it was, did you comply with it? As Kate mentioned, they, they didn't, and, and the government conceded, they didn't. They just said that, uh, and Thropic doesn't have standing to challenge that part. Um, but, so she's, but it turned out that she, what didn't ask

questions about the first amendment, because she was already confident that about the first

amendment part of her opinion, I think, uh, and she thought, yeah, you know, the, so I thought, it, it sounded like she's tending to rule on first amendment grounds, fifth amendment grounds, probably arbitrary and capricious grounds, and also ultra-virus, ultra-virus, because this

“statute doesn't permit the government to do what it tried to do here, and that's what most of”

the questions yesterday were about, I mean, last night, or depending on what time zone you're in, maybe it was yesterday afternoon, but, um, that, this is a statute that for the most part, contemplates, uh, what it talks about an adversary, and, uh, it, it obviously the, Congress was contemplating for in the states, for an actor's foreign, uh, terrorist, um, it talks about sabotage. It talks about, um, maliciously, um, uh, introducing unwanted functions into, uh,

software, so it's underhanded stuff, and the crux of this thing is about, um, uh, uh, openly, uh, contractual provisions that everyone knew about before the dispute arose. They said, I'm not going to, we can't use this. It's not safe for, um, uh, autonomous lethal weapons and mass surveillance of Americans, everyone knew that and, and the government wanted to remove that term of service, and, and so there's, there's nothing's surabtitious about it. It doesn't fit

remotely, and to get around that, they're theory, and she was very good on this. I thought in her questions, she said, to get around that, what the government is resorting to is to saying, well, you, we asked you to do this, and you said, no, and that, that means we don't trust you anymore,

our warfighters and kill them, and, and that's sort of a big leap, and, and so, unless, uh,

unless the difference, um, is enormous, and the difference is high to our, in a security, in a national security context, uh, I think she's going to rule, uh, for anthropic on all of those grounds. Kate, what did you make of the, uh, we have a contract dispute. Therefore, they're going to sabotage our warfighters document. I really liked the fact that the counterfactual came out, right, which is that, like, if they were actually going to sabotage, why would they state up front

that you're disagreeing with, with, with the government? Like, they wouldn't do that. Like, if you were going to sabotage them, you'd hang onto the contract for dear life, and then, like,

“slip in your sabotage somewhere around the way that's how sabotage works. Um, and so, like,”

it was, it, like, there was some, there were just, like, I don't know, the general kind of vibe of this, of this entire hearing to my, again, to, like, I don't spend a ton of time in, uh, defense contract kind of arguments or, I don't think any of us do or supply chain kind of argument, designation arguments. Um, but, like, it was just kind of, like, these, this just doesn't, like, this is square background hole, and you can't do this. Um, you can't kind of just, kind of rewrite

what words mean. Um, and I know that there's been a lot of that in this administration, but the theme kind of, um, beyond the pale. All right. Um, she, uh, had a pretty organized list of questions, Molly, that, and she last night sent around her list of questions, and today, walked in with, as I said before, a bit of, uh, okay, here's my preliminary thinking, which I would have been, would have warmed my heart if I were a Wilmer Hell attorney. Um, what, uh, what did you

make of the, of, what can we make of her thinking based on what she said in either that list of questions or the preliminary discussion or both? Yeah. I mean, I think as Roger and Kate have said,

one thing we can make of her thinking is that she's taking this first amendment claim in

particular, really seriously, which I think was surprising to some people who'd been watching it ahead

“of time, because I think a lot of people believe well, really all you need to do is look at the”

statutory questions and say this is a ridiculous interpretation of the statute. So why address issues that should be, and I think are harder, although it seems that she doesn't consider them quite as hard, particularly the first amendment one. I think could be considered difficult. So I think that that's one, and I guess two, I think that the fact that the government backed off the secondary boycott probably has swayed some of her concerns, and she certainly

wouldn't have gone for the secondary boycott, and now she's had stipulations in her court, or she can say, well, you said, here in court, that you don't want to do that anyway, so you can't do that. So I think that that's one thing too. I think she was also very clearly, again, as Roger and Kate said, skeptical of the supply chain risk determination for the reasons discussed she,

we were just going through basically this, but she said, wait, so if someone asks annoying

questions, then they're not trustworthy. So clearly, she didn't think that that was an acceptable standard to use there, and she's, I mean, she's in the northern district of California. She's got like the the highest rate of tech lawyer people who would ask annoying questions and tech throw in the world. It would be like her whole world would become, and where the people were the standard. Yes, no, no, the high tolerance for annoying questions, but I, so I think I think that she was

skeptical of that. The, she also clearly believed that as anthropic conceded, that the government has the right not to work with anthropic, if it doesn't want to work with anthropic. So I think that the question going forward is, and I also believe that there will be a preliminary injunction, the question is exactly what does it look like? And does it effectively tell the government?

“You have to keep working with anthropic, or does she kind of find a way to massage it so that”

it says this supply chain risk determination, designation is invalid. And everything you

to decide not to work with anthropic. So that's kind of what I would imagine it looking like. Kate, what does, what turns on the supply chain risk designation other than if you lock off the secondary boycott? And you say, okay, Mr. Secretary, you can designate a company supply chain risk, but that does not imply that a secondary boycott of contractors takes place. What's the difference between that and just saying what anthropic

“concedes they can say, which is we don't want to do business with anthropic anymore?”

Yeah, I mean, the, it's the knock-on effects essentially of basically saying that there's going to,

that there, that you can ruin, or I think that they put it, I think anthropic put it in their brief is like murder, like murder or a company, essentially, by demanding so broadly that no one can do business with them and no one can contract with the government at all if they do any type of business with anthropic. You know, it's just like a insanely broad read. And so this is, I mean, this is, and we're also, I mean, this is just kind of getting into areas in which no one is ever

interpreted this statue before. And it is certainly just not for a domestic company. And so

that just implies so many other things. And again, that implies, and the judge seems to very

strongly like believe this, that there is an a retaliatory component to this. And that is like kind of like that is the smoking gun in this kind of, in her thinking, as it seems, was the fact that they like that they tried to cable this entire company. And so even if they can see that like the band doesn't have secondary bandism, the fact they tried to do it. And so, and it, and it, and it had maybe lost in harmony. So that is, that itself is retaliatory.

“Now, the, the question, and this is, I think, the why this is the first amendment issue is”

actually difficult is, now, is the retaliation based on speech or is it based on conduct? Is it based on Anthropics saying, no, we're not going to code that or is it based on then saying, on the speech of them saying, no, we're not going to code that? Is it based on their actually not refusing to code that? Like the lack of code that they provided. So like these kind of get to be like the issues, is it then breaking their contract terms? And so like

if it's the breaking of the contract terms, then that's not speech is basically essentially

the DOJ's argument. And so if it's breaking of the contract terms that's not speech, but the judge here did not seem to think that that was what it all like that is what the retaliation was for. The judge was very clear and as the DOJ was kind of ending, ending their arguments, she actually interrupted them at like one point and said kind of very credously like, are you saying that Anthropics going to the press to bring attention to the DOD conduct about their failure to

basically just like telling people this was going on and that they were breaking that they were asking them to do this isn't speech. And that was essentially kind of her question back to the

“government. And I mean, I think if you're going to, if you're going to take that specific moment”

and kind of focus on it, then I think you have a very kind of, you have a pretty decently strong retaliation claim. It's much easier than a lot of actually with Anthropics argues in its brief, which is essentially like a code is speech type of argument, which is a lot way more difficult in my opinion to for her to issue a preliminary to reach on preliminary injunction. Roger, do you have thoughts on this? Yeah, I think I agree with Kate. It's very obvious there's

retaliation because there's this overblown response. There's a lot of ways to terminate a contract without using these statutes, these rarely use statutes. So it's retaliation, but what is the retaliation for? And what helps make that Anthropics case is of course Trump's and Higgs-Seth's social media posts that that blame it on public statements that Anthropics has made about the lack of safety and sort of an implied moral problem, but they focus on lack of safety about

stronger with all of that, it's expressed from the truth, social, in talking about woe-chism,

and you know, there was a weird filing this morning by the CTO and Under Secretary of War,

“that's what they're calling him, Mike Amio Michael. And there's something creepy about how any”

disagreement, any public disagreement is taken as unacceptable. And he writes Anthropics has attempted to characterize itself as a trusted partner to DOW, partner of war. However, Anthropics continued attempts, including now, under oath to dictate to DOW what the nature of the department's relationship

with Anthropics is and has been demonstrates Anthropics desire to insert itself into DOW

decision making. I really, I really, that part really struck me as well. You know, it's Anthropics, you know, and one can criticize them for their red lines and I have actually questioned

“whether these are the red lines that make sense for them. But you know, they've been consistent”

about these. The government signed this contract. It wasn't a particular point of controversy. Then they came and kind of, all of a sudden went nuts about this and look, am I perfectly willing to believe that Daria, I'm a day was arrogant, behaved arrogantly and in meetings with

that would be unthinkable. He would never do that, right? That, you know, a Silicon Valley tech guy would

never do that. Okay. But the idea that like they are insisting on rewriting the relationship, this was the relationship, right? And it was the relationship that the defense department

“didn't have a problem with. And so I, I, I think it's really, it's a really striking thing”

that the justice department in court sort of waxes indignant that the government that that, you know, an opposing contractor party would have views about its terms of service. All tech companies have views about their terms of service. Yeah, I'll go one farther further, like in saying like one of what's, I think that that'll be there will be a PIMS. I think that there will event if it continues and the charges aren't like and like and and topic continues, there will be

a decision in the topic's favor and I think this will easily, and I wonder if Roger Molly grew with me easily go the way that the district court decisions are starting to go with the Trump administration. I don't think they will appeal this. I don't think that if they lose in the district court that this is something that they will fight on. Well, I thought that they might fight on it. I don't know. I mean, I just like a point of pride thing and also, you know,

this is national security and just as they're saying that what they're so upset about within thropache is that anthropic would dare to tell Pete Heggseth what to do with his warfighters. I think there will be a little bit of a sense of, you have dare the court tell us what to do with our warfighters and let's, you know, appeal it up and have the court say no, actually this is where you get the most difference of all and I don't know that they'd prevail but I wouldn't be shocked if

they kept trying. Yeah, so before we, before we wrap, there is another case which is, of course, in the DC circuit and is coming to a head rather quickly as well. So Roger, what's the difference between these two cases and I mean, and could we expect a situation in which the DC circuit goes one way and a district court in the northern district of California goes a different way?

two Trump appointees on it. Do you remember K to the, who the panel is or, or Molly?

“It's Wilkins. Oh yeah, I guess this and Naomi Rao, I believe. Oh wow, yeah.”

Yeah, so I do think it's possible there might be a difference in outcome.

The other one involves a different statute. It's another, it's called 41 USC correct me of

47 13, I think and it's it was enacted eight years later. It's broader. This one 32 52 is about the

“defense department and then eight years later after some more experiences, I think the dispute with”

the Russian lab Caspersky that homeland security had, it wasn't military, they expanded it to reach other federal agencies. That's the main difference. It also does use the word person instead of adversary. So it's a little broader, you know, on its face that way, that might be something they can

“make some hay with. But, you know, ordinarily though, it's the same issues. I think also Ben,”

you know, you raised an important issue is which is what are the distinctions between what you can get through normal procurement statutes and what you can get through this one. And it's not crystal clear. I think it would take a lot longer to go through the normal procurement statutes. That's the impression I get and and that's the main. This is sort of a Gordy and not approach and right. Yeah. All right. We are going to leave it there folks.

Judge Lynn will be ruling in the next few days and the government's brief is due tomorrow. It's basically

just over 24 hours from now 27 hours from now. And we will keep you posted. I suspect we're going to get a ruling before Fridays, Laugh Fair Live, just a guess, probably during it, knowing our luck. But we will be back with all the action as soon as it happens. Thanks for joining us.