Federal Court Drops AI-Generated CSAM Possession Charge

Federal appeals court dismisses AI CSAM possession charge under First Amendment

A federal appeals court panel has dismissed a possession charge against a defendant accused of creating AI-generated child sexual abuse material, ruling that fully synthetic imagery depicting no actual children is protected by the First Amendment—even as the judges expressed discomfort with their own conclusion.

The U.S. Court of Appeals for the 7th Circuit issued the decision in late August in a case involving Steven Anderegg, a software engineer who allegedly used generative AI tools to create hyper-realistic CSAM. According to court documents, Anderegg not only produced and distributed the material but also sent it to a minor via Instagram direct messages in October 2023. Meta detected the image and reported it to the National Center for Missing and Exploited Children's CyberTipline, triggering a law enforcement investigation.

Anderegg faces multiple charges, including production and distribution of CSAM. But the three-judge panel dropped the possession charge, citing Supreme Court precedent that protects possession of obscene material in the home and distinguishes between real and virtual child abuse imagery.

Why existing precedent led to the ruling

The decision rests on a combination of Supreme Court cases spanning more than three decades, according to Dr. Mary Anne Franks, a professor of intellectual property and civil rights law at George Washington University.

In 1969, the Supreme Court ruled in Stanley v. Georgia that individuals have a constitutional right to possess obscenity in their own homes. Two decades later, in Osborne v. Ohio, the Court carved out an exception for child sexual abuse material depicting real children, recognizing that such images create permanent records of abuse and fuel demand for exploitation.

But in 2002, the Supreme Court struck down a federal provision banning possession of entirely computer-generated CSAM in Ashcroft v. Free Speech Coalition. That ruling effectively declared that virtual imagery depicting no actual children is protected speech—a conclusion the 7th Circuit panel felt bound to follow.

"I do think it's a really straightforward reading of prior precedent, but I also understand why it's really upsetting to hear," Franks told Mashable, which first reported details of the legal analysis.

Judges signal Supreme Court should revisit the issue

In an unusual move, Judges John Z. Lee and Joshua P. Kolar explicitly invited the Supreme Court to reconsider the precedent in light of advances in artificial intelligence.

"Given the significant advances in computer-generated image technology, particularly in the field of artificial intelligence, we would benefit from additional guidance from the Supreme Court regarding the intersection between the First Amendment and virtual CSAM if an appropriate case should arise," the judges wrote.

Franks called the signal "unusual" and noted that the government could successfully challenge the 2002 precedent by arguing that AI models have been trained on real CSAM imagery. Even if a particular AI-generated image depicts no identifiable child, it may have been produced using training data derived from actual abuse.

Why it matters

The ruling highlights a collision between decades-old constitutional doctrine and generative AI capabilities that didn't exist when those precedents were set. For technology companies, law enforcement, and policymakers, the decision underscores the urgency of updating legal frameworks to address AI-generated content that can be indistinguishable from photographs of real abuse. The 7th Circuit's invitation to the Supreme Court suggests that higher courts may soon grapple with whether First Amendment protections written for an analog era still apply when AI can synthesize hyper-realistic depictions at scale. Franks warned that any new prohibitions must be narrowly defined to avoid misuse by groups seeking to restrict legitimate sexual education or LGBTQ+ content, but she emphasized that the harms of AI CSAM—including normalization of child sexualization—are real and present.

The government has not yet appealed the decision. If it does, the Supreme Court could take up the case as early as its October term.

These details were first reported by Mashable.