Background
The government alleged that Steven Anderegg used Stable Diffusion, a generative-AI program, to create hundreds of photorealistic images depicting prepubescent minors engaged in sexually explicit conduct. According to the indictment, he also sent AI-generated images to an Instagram account belonging to a minor. The government conceded that the charged images did not depict, and could not be linked to, any actual child.
Anderegg was charged with producing and distributing the images, transferring such material to a minor under sixteen, and possessing an obscene visual depiction of a minor engaged in sexually explicit conduct in violation of 18 U.S.C. § 1466A(b)(1). The district court dismissed only the possession count, holding the statute unconstitutional as applied under Stanley v. Georgia and Ashcroft v. Free Speech Coalition. The government brought an interlocutory appeal; the production, distribution, and transfer counts remained pending.
The Court’s Holding
The Seventh Circuit affirmed. It held that Stanley controlled because Count 4 sought to punish Anderegg for possessing obscene material in his home. The statute’s interstate-commerce element did not remove the charge from Stanley’s protection, particularly because the government conceded that the possession count rested solely on Anderegg’s possession of the material at home. The court also rejected the government’s argument that Stanley protects only obscene depictions involving adults.
The court further held that Free Speech Coalition foreclosed treating the virtual images like CSAM depicting actual children. The government’s asserted justifications—that virtual CSAM can facilitate grooming, encourage abuse, sustain the market for actual CSAM, and make real and virtual images harder to distinguish—were arguments the Supreme Court had already rejected. Although the panel expressed concern that modern AI can create images virtually indistinguishable from depictions of actual abuse, it concluded that technological change did not permit a lower court to disregard binding precedent. Section 1466A(b)(1) was therefore unconstitutional as applied to Anderegg’s alleged in-home possession.
Key Takeaways
- The First Amendment protects the private, in-home possession of obscene virtual CSAM that does not depict an actual child under controlling Supreme Court precedent.
- A federal statute’s interstate-commerce element does not by itself take an otherwise in-home possession prosecution outside Stanley’s protection.
- The ruling addressed only the possession count and did not dismiss the separate charges for producing, distributing, or transferring the material to a minor.
Why It Matters
The decision applies decades-old First Amendment precedent to photorealistic material generated with modern AI. It draws a constitutional distinction between images documenting the abuse of actual children, whose possession may be prohibited, and wholly virtual images possessed privately at home.
Judges Lee and Kolar separately urged additional Supreme Court guidance, emphasizing that AI-generated images may now be indistinguishable from images of actual victims and may burden efforts to investigate real abuse. The panel nevertheless left any reconsideration of Free Speech Coalition to the Supreme Court.