From 36d57276a302c4cc37cb134f55374925537f2c2f Mon Sep 17 00:00:00 2001
From: Joshua Valluru <326636767+joshua-berri@users.noreply.github.com>
Date: Wed, 30 Sep 2026 10:20:57 -0700
Subject: [PATCH] fix(mcp): fail closed on authoritative caller team outages

---
 .../mcp_server/auth/user_api_key_auth_mcp.py  |  4 ++-
 .../auth/test_managed_agent_access.py         | 25 +++++++++++++++++++
 2 files changed, 28 insertions(+), 1 deletion(-)

diff --git a/litellm/proxy/_experimental/mcp_server/auth/user_api_key_auth_mcp.py b/litellm/proxy/_experimental/mcp_server/auth/user_api_key_auth_mcp.py
index 0cc21cc01a4..457c9b1680b 100644
--- a/litellm/proxy/_experimental/mcp_server/auth/user_api_key_auth_mcp.py
+++ b/litellm/proxy/_experimental/mcp_server/auth/user_api_key_auth_mcp.py
@@ -2755,7 +2755,9 @@ class MCPRequestHandler:
             )
             return list(servers)
         except Exception as e:
-            if isinstance(e, UnloadableEntitlementError):
+            if isinstance(e, UnloadableEntitlementError) or (
+                user_api_key_auth is not None and user_api_key_auth.requires_fresh_policy
+            ):
                 raise
             verbose_logger.warning("Failed to get allowed MCP servers for team: %s", e)
             return []
diff --git a/tests/test_litellm/proxy/_experimental/mcp_server/auth/test_managed_agent_access.py b/tests/test_litellm/proxy/_experimental/mcp_server/auth/test_managed_agent_access.py
index af5d7a753ee..90403e5553f 100644
--- a/tests/test_litellm/proxy/_experimental/mcp_server/auth/test_managed_agent_access.py
+++ b/tests/test_litellm/proxy/_experimental/mcp_server/auth/test_managed_agent_access.py
@@ -532,3 +532,28 @@ async def test_caller_mcp_revocation_uses_fresh_policy(
 
     assert set(await MCPRequestHandler.get_allowed_mcp_servers(auth)) == ({"slack"} if fresh else {"slack", "linear"})
     assert await MCPRequestHandler.get_allowed_tools_for_server("slack", auth) == (["read"] if fresh else ["read", "write"])
+
+
+@pytest.mark.asyncio
+@pytest.mark.parametrize("fresh", [False, True])
+async def test_caller_team_outage_cannot_remove_authoritative_server_ceiling(
+    monkeypatch: pytest.MonkeyPatch, fresh: bool,
+) -> None:
+    from litellm.proxy.common_utils.user_api_key_cache import UserApiKeyCache
+    from litellm.types.agents import AgentCaller
+
+    database: Final = MagicMock()
+    database.writer_db.litellm_teamtable.find_unique = AsyncMock(side_effect=RuntimeError("writer unavailable"))
+    database.db.litellm_teamtable.find_unique = AsyncMock(side_effect=RuntimeError("reader unavailable"))
+    monkeypatch.setattr(proxy_server, "prisma_client", database)
+    monkeypatch.setattr(proxy_server, "user_api_key_cache", UserApiKeyCache())
+    auth: Final = actor(("read",))
+    auth.agent_caller = AgentCaller(team_id="caller")
+    auth.requires_fresh_policy = fresh
+
+    if fresh:
+        with pytest.raises(HTTPException) as failure:
+            await MCPRequestHandler.get_allowed_mcp_servers(auth)
+        assert failure.value.status_code == 503
+    else:
+        assert set(await MCPRequestHandler.get_allowed_mcp_servers(auth)) == {"slack", "linear"}