Background
Federal prosecutors alleged that Steven Anderegg used Stable Diffusion and additional software components to generate hundreds of photorealistic images depicting prepubescent minors engaged in sexually explicit conduct. The government conceded that the charged images did not depict, and could not be linked to, any actual child. Investigators identified Anderegg after Meta reported that an Instagram user had sent apparently AI-generated sexual images to a minor.
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 under 18 U.S.C. § 1466A(b)(1). The district court dismissed only the possession count, holding the statute unconstitutional as applied because the alleged possession occurred in Anderegg’s home. The government brought an interlocutory appeal; the production, distribution, and transfer counts remained pending.
The Court’s Holding
The Seventh Circuit affirmed. Under Stanley v. Georgia, the government generally may not criminalize the mere possession of obscene material in the privacy of a person’s home. The statutory interstate-commerce element did not take the possession charge outside Stanley because the government intended to rely on Anderegg’s in-home possession, rather than transportation or distribution, as the conduct underlying that count.
The court also held that Osborne v. Ohio, which permits criminalization of in-home possession of CSAM depicting actual children, did not control because no actual child was depicted here. The government’s arguments that virtual CSAM can facilitate grooming, normalize abuse, sustain the market for actual CSAM, and impede prosecutions because AI images are increasingly difficult to distinguish from real ones had been rejected as grounds for suppressing virtual CSAM in Ashcroft v. Free Speech Coalition. Although the panel expressed concern that modern generative AI has changed the technological landscape, it held that Stanley and Free Speech Coalition remained binding and rendered § 1466A(b)(1) unconstitutional as applied to Anderegg.
Key Takeaways
- The First Amendment protected Anderegg’s alleged possession at home of obscene, entirely virtual CSAM under the controlling Supreme Court precedents.
- An interstate-commerce jurisdictional element did not transform the possession count into a prosecution for transporting or distributing obscenity.
- The ruling addressed only the possession charge; it did not dismiss the separate production, distribution, and transfer charges.
Why It Matters
The decision applies Supreme Court precedent developed before modern generative AI to photorealistic sexual images of children created without using an actual child. It establishes within the Seventh Circuit that technological advances alone do not permit a lower federal court to disregard Free Speech Coalition’s distinction between virtual depictions and material produced through the abuse of real children.
In a concurrence joined by Judge Kolar, Judge Lee called for additional Supreme Court guidance, emphasizing that contemporary AI-generated images may be virtually indistinguishable from images of actual abuse and may create new enforcement and child-protection concerns that the existing record did not permit the court to resolve.