Federal Court Rules Private AI-Generated CSAM May Be Protected Speech

Court finds First Amendment may protect AI-generated abuse imagery in narrow circumstances

A federal appeals court has ruled that the First Amendment may protect an individual's private possession of AI-generated child sexual abuse material when no real child is depicted and the content remains within the home. The decision from the U.S. Court of Appeals for the Seventh Circuit exposes a significant gap between existing child protection statutes and the capabilities of modern generative AI systems.

Judge John Z. Lee issued the ruling Tuesday in a case involving Steven Anderegg of Wisconsin, who faces federal charges for allegedly using an AI image generator to create thousands of explicit images of minors. While upholding dismissal of a possession charge, Lee explicitly called on the U.S. Supreme Court to reconsider how virtual child abuse material should be treated in the AI era.

"Given the relentless advancement in artificial intelligence models, we have some concerns about the lines these cases draw, but we are not free to redraw them ourselves," Lee wrote in the opinion.

The Justice Department brought charges against Anderegg in 2024 under federal obscenity laws prohibiting the production, distribution, and possession of obscene visual depictions of minors in sexually explicit conduct. Those statutes can apply even when no real person is involved. A lower court judge dismissed the possession charge on First Amendment grounds, prompting the government's appeal.

Why it matters

This ruling creates a constitutional safe harbor for a narrow category of AI-generated abuse imagery at precisely the moment when such content is overwhelming law enforcement systems designed to protect real children. The National Center for Missing and Exploited Children recently told Congress it is being inundated with reports of suspected AI-generated material that often lacks the information investigators need. The decision may force lawmakers to craft new statutes specifically addressing synthetic abuse imagery, while the practical effect remains limited—producing, distributing, or removing such material from the home would still face prosecution.

Legal precedent meets generative AI

Lee's decision rests on two Supreme Court precedents: a 1969 ruling establishing a right to possess obscenity privately at home, and a 2002 decision finding that "virtual" child sexual abuse material not depicting a real person does not constitute child pornography. The court noted an existing exception for "morphed" images that alter photos of real children into sexual poses, which remains prosecutable because it harms identifiable victims.

Charges against Anderegg for producing and distributing AI-created material remain pending. He also faces a separate criminal charge for allegedly transferring AI-generated sexual images to a 15-year-old boy via Instagram, according to court documents. Law enforcement learned of Anderegg's activity through a tip from Meta to the National Center for Missing and Exploited Children. The images were reportedly created using software from Stable Diffusion, an open-source developer.

Narrow protection, broad implications

Legal experts say the ruling's practical impact may be limited. Riana Pfefferkorn, a policy fellow at the Stanford Institute for Human-Centered AI, noted that privately possessing such material requires either producing it or receiving it from elsewhere—both acts that remain unprotected. Taking a device containing the images outside the home would also fall outside the ruling's scope.

Daniel Lyons, a law professor at Boston College, said the Supreme Court may well take up the case, particularly after revisiting internet-era speech protections affecting children in a 2025 decision on age verification for pornography websites. The flood of synthetic images is straining systems built to combat abuse imagery of real children, he noted, making tighter restrictions on AI-generated material increasingly necessary.

The Washington Post first reported the details of the ruling and the underlying case.