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Federal Appellate Court Rules In Favor Of AI Child Porn

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by blueapples
Monday, Aug 31, 2026 - 11:30

blueapples on X | ashesofacacia.substack.com

While proponents of artificial intelligence (”AI”) paint an idyllic picture of how the groundbreaking technology is poised to eliminate the ills plaguing society, their unbridled optimism continues to be met with skepticism by their opponents. From fears over the economic repercussions of the rapid loss of jobs that advancements in AI may not be able to outpace to the technology’s applications as the framework for the apparatus of a panopticon surveillance state, concerns over the impact of AI mar the utopian vision its advocates have with an even more dystopian outlook of the future it will usher in. A look inside of the Pandora’s Box being opened by AI was glimpsed following a decision by a federal appeals court ruling in favor of protecting AI-generated child pornography.

On August 25th, 2026, the U.S. Court of Appeals for the 7th Circuit ruled that the First Amendment protects an individual’s right to privately possess images and videos of child sexual abuse created using AI, so long as the child sex abuse material (”CSAM”) does not depict a real child and remains in the privacy of the possessor’s home. The federal appellate court issued the unanimous ruling from a panel of three U.S. circuit judges: Judge John Z. Lee, Judge Doris L. Pryor, and Judge Joshua P. Kolar. The case came to the court in the matter of U.S. v. Anderegg, a title that now stands poised to challenge longstanding Supreme Court precedent governing how the law addresses CSAM.

Steven Anderegg is accused of generating over 13,000 images of AI CSAM.

The pivotal case centers on Steven Anderegg, 42, of Holmen, Wisconsin. Anderegg was arrested in May 2024 on suspicion of mass production of AI-generated CSAM. Prosecutors alleged that he used an AI image generator called Stable Diffusion to create over 13,000 images depicting child sex abuse by entering prompts into the platform, including thousands of realistic images of prepubescent minors. In a press release announcing his arrest, the U.S. Department of Justice revealed Anderegg described how he created the AI CSAM through the text-to-image generative AI model in a chat with a 15-year-old boy on the social media platform Instagram. The DOJ press release chronicled how Anderegg not only described how he generated the images to the minor, but that he sent the boy several AI-generated images of minors displaying their genitals. Following their exchange, Instagram reported Anderegg’s account to the National Center for Missing and Exploited Children (”NCMEC”) through its CyberTipline. The NCMEC followed suit by alerting federal authorities.

On May 15th, 2024, a federal grand jury in the Western District of Wisconsin returned an indictment against Anderegg, charging him with producing, distributing, and possessing obscene visual depictions of minors engaged in sexually explicit conduct and transferring obscene materials to a minor under the age of 16. Under those charges, Anderegg faces a maximum penalty of 70 years in prison and a mandatory minimum of five years.

Ahead of his trial originally scheduled to begin on February 18th, 2025, Anderegg’s attorneys filed a motion to dismiss the four counts brought against him on September 23rd, 2024. His defense counsel cited a myriad of federal cases in support of their argument that the statutes Anderegg was charged under were unconstitutional because the AI CSAM he created, possessed, and shared did not depict any actual children, thus the charges violated his rights under the First Amendment.

On February 13th, 2025, Chief Judge James D. Peterson of the U.S. District Court for the Western District of Wisconsin granted the motion for dismissal in part, dismissing the possession charge against Anderegg while allowing the other charges to proceed. Judge Peterson granted the lone dismissal of the possession charge in agreement with the defense’s argument that precedent set by the Supreme Court case Stanley v. Georgia (1969) protected Anderegg’s right to possess obscene material in the privacy of his home. Although subsequent SCOTUS cases do not extend that same protection to the possession of CSAM, the nature of the images kept by Anderegg being generated by AI did not allow the court to treat them as CSAM under the charge for possession. That distinction culminated in the dismissal of the possession charge against Anderegg, setting the stage for a potential review by the Supreme Court that could reshape precedent on how CSAM is viewed in the eyes of the law.

For decades, the foundation of the Supreme Court of the United States’ (”SCOTUS”) precedents restricting First Amendment protections from CSAM was rooted in the landmark decisions of New York v. Ferber (1982) and Osborne v. Ohio (1990).

In Ferber the court ruled that First Amendment protections do not extend to the production or sale of CSAM because each act intrinsically relies on the sexual abuse of children. In making that determination, the SCOTUS ruled that the First Amendment standards regarding obscenity set forth by the landmark decision of Miller v. California (1973) need not be satisfied regarding the manufacture or dissemination of CSAM because the government’s compelling interests are not in regulating free speech but in preventing the sexual abuse of children.

The SCOTUS extended the constitutional prohibitions set by Ferber to the possession of child sex abuse material when deciding Osborne in 1990. That decision also created an exception to the holding of Stanley, which allows Americans to possess obscene materials in the privacy of their home, by making the distinction that the possession of child sex abuse materials itself relies on its production and dissemination and thus promotes the sexual abuse of children. In making that determination, the court found that the government making the possession of CSAM illegal does not infringe upon the First Amendment, as laws are made in the interest of protecting children and not acting out of a paternalistic interest of regulating citizens’ minds that would otherwise be unconstitutional.

Two decades after the Ferber decision, the court revisited the precedent it set when considering the matter of Ashcroft v. Free Speech Coalition (2002). In Ashcroft, the Free Speech Coalition filed a lawsuit challenging provisions of the Child Pornography Prevention Act of 1996 (”CPPA”) as being overly broad and thus violations of First Amendment protections of free speech. Before the legislation of the CPPA in 1996, Congress defined child pornography with reference to the standard set by Ferber. The CPPA added two categories expanding the legal definition of child pornography: 1. “any visual depiction, including any photograph, film, video, picture, or computer or computer-generated image or picture” that “is, or appears to be, of a minor engaging in sexually explicit conduct” and 2. “any sexually explicit image that was advertised, promoted, presented, described, or distributed in such a manner that conveys the impression it depicts a minor engaging in sexually explicit conduct.” In Ashcroft, the SCOTUS ultimately ruled that those two provisions were aimed at categories of protected speech other than obscenity or child pornography and were thus unconstitutional.

The foundation of the court’s opinion laid in the conclusion that the CPPA prohibited speech regardless of any serious literary, artistic, political, or scientific value that it may have. Unlike the decisions of Ferber and Osborne, which laid out the government’s interests in protecting children from sexual abuse rather than regulating aspects of free speech, provisions of the CPPA allowed the government to prohibit the virtual depiction of minors engaged in sexual activity as illegal despite those depictions being long-standing themes in art and literature. The court reasoned that under the plain meaning of the statutory construction of the CPPA, the William Shakespeare play Romeo and Juliet could potentially be seen as an example of art and literature depicting these acts that the language of the law could render illegal. In referencing Ferber, the court deemed that the two provisions under the CPPA being examined were too broad to treat as solely being in the interest of protecting children from sexual abuse because they could be applied to examples where no actual children were involved in the depictions they described, such as works of literary or artistic merit that could be criminalized as child pornography under the law.

Following the decision in Ashcroft, members of Congress were outraged by the ruling and began working on a bill to address the concerns raised by the court. Republican member of the United States House of Representatives representing the 16th District of Florida, Mark Foley, succinctly summarized the feelings of members of Congress by stating how he believed that “the high court sided with pedophiles over children” when deciding Ashcroft. Congress subsequently passed the PROTECT ACT of 2003, which fortified existing law governing CSAM. Section 504(a) of the PROTECT Act added a new section to Title 18 of the United States Code, the main federal body of law defining crimes and criminal procedure, under 18 U.S.C. § 1466, which was originally enacted by the Child Protection and Obscenity Enforcement Act of 1988. The PROTECT Act added § 1466A to Title 18, a statute titled “Obscene visual representations of the sexual abuse of children.” The statute set outlined criminal offenses concerning the production, distribution, and possession of visual depictions of minors engaging in sexually explicit conduct. Under the new statute, subsection (c) included a nonrequired element of offense that expressly states that “It is not a required element of any offense under this section that the minor depicted actually exist” in a maneuver to address the precedent set by the Ashcroft decision.

The addition of § 1466A to Title 18 of the United States Code by the PROTECT Act ultimately enacted the statutes that federal prosecutors charged Anderegg under. Anderegg was charged under two provisions of 18 U.S.C. § 1466A, namely § 1466A(a)(1) and § 1466A(b)(1) on three separate counts: one count of production of obscene virtual CSAM under § 1466A(a)(1), one count of distribution of obscene virtual CSAM under § 1466A(a)(1), and one count of possession of obscene virtual CSAM under § 1466A(b)(1). He also was charged on one count of transferring obscene matter to a minor under a separate statute, 18 U.S.C. § 1470, for sending the virtual CSAM to the 15-year-old boy over Instagram.

The ruling in U.S. district court partially granting the motion for dismissal filed by the defense for Anderegg only deemed that the charge under 18 U.S.C. § 1466A(b)(1) for possession was unconstitutional. The appellate court’s consideration of the appeal of the dismissal of that lone charge held that the count under 18 U.S.C. § 1466A(b)(1) violated the First Amendment due to precedent set forth by Stanley and Ashcroft, since no actual children were involved in the generation of the AI CSAM. In its ruling, the U.S. Court of Appeals for the Seventh Circuit highlighted the government’s concession that it could not link the images to any actual child in either their depictions or production. That concession meant that the precedents set forth by Stanley and Ashcroft were enough to affirm the lower court’s action and uphold the dismissal of the possession charge against Anderegg.

Following the ruling issued by his appellate court, Judge John Z. Lee issued a stark warning on how existing legal precedent is not equipped to address CSAM in an age of rapid technological advancement ushered in by AI. “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, compelling the Supreme Court to provide additional guidance on the issue. His warning echoed the dissenting opinion of Chief Justice William Rehnquist in Ashcroft, joined by Associate Justice Antonin Scalia, when he ominously forecast that the rapid advancement of technology would soon make it impossible to distinguish between images of actual children and those purely computer-generated. “Congress has a compelling interest in ensuring the ability to enforce prohibitions of actual child pornography, and we should defer to its findings that rapidly advancing technology soon will make it all but impossible to do so,” Rehnquist wrote in his dissent.

Federal prosecutors who now face the question of whether to petition the SCOTUS to review the decision rendered by the U.S. Court of Appeals for the 7th Circuit in the matter of U.S. v. Anderegg find themselves grappling with the changing landscape of CSAM in an age of AI, which makes enforcing existing laws increasingly complex. In order to successfully keep the law on pace with the rapid acceleration of technology, the U.S. Department of Justice must demonstrate that AI CSAM poses the same risks, even when its production does not directly involve any actual children, to extend the precedents set forth by New York v. Ferber and Osborne v. Ohio in order to effectively prosecute a new generation of sexual predators.

Proponents of that argument assert that the rise of AI CSAM poses significant hazards to children because those materials normalize the sexualization of children, allow for the advertisement of CSAM, and make the line between artificially generated CSAM impossible to distinguish from any involving real children. Those dangers further insulate sexual predators from justice by enabling them to hide behind the veil of AI to shield their crimes and conceal the identities of their victims. For prosecutors, harnessing those concerns within a legal argument that can effectively address existing archaic case law remains the crucial hurdle they have yet to surpass. The case of U.S. v. Anderegg not only highlights the imperative they have to do so but also the crucible they are under to articulate any such formidable legal arguments, as the law increasingly appears incapable of keeping pace with the impact rapid advancements in technology have....especially those that tear away at society’s moral fabric.

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