The Seventh Circuit Court of Appeals ruled on August 25, 2026, in the case of United States v. Steven Anderegg, affirming a lower court's decision to dismiss a possession charge against Anderegg. The case centers around the legality of possessing virtual child sexual abuse material (CSAM) created using generative artificial intelligence (GenAI) software. This ruling has significant implications for how the law addresses emerging technologies and the boundaries of First Amendment rights.
Steven Anderegg, a software engineer, faced multiple charges, including producing, distributing, and possessing visual depictions of minors engaged in sexually explicit conduct. The government alleged that he used Stable Diffusion, a GenAI program, to create hyper-realistic images of minors in sexually explicit situations. The case began when Meta Platforms reported potential CSAM to authorities, leading to an investigation that linked the images to Anderegg.
When Anderegg moved to dismiss the indictment, the district court granted the motion regarding the possession charge, ruling that the law under which he was charged, 18 U.S.C. § 1466A(b)(1), was unconstitutional as applied to him. The court cited the Supreme Court's decision in Stanley v. Georgia, which recognized a First Amendment right to possess obscenity in the privacy of one's home. The district court also referenced Ashcroft v. Free Speech Coalition, which rejected similar arguments for banning virtual CSAM.
The government appealed the dismissal of the possession charge, arguing that the lower court's ruling conflicted with established precedents regarding child pornography. The appeal was heard by a panel of judges, including Circuit Judge Lee, who authored the opinion. The court acknowledged the rapid advancements in GenAI technology and the challenges it poses to existing legal frameworks.
The court ultimately ruled that the prior Supreme Court decisions in Stanley and Free Speech Coalition controlled the outcome of Anderegg's case. Judge Lee stated, "We conclude that Stanley and Free Speech Coalition control Anderegg’s as-applied challenge to § 1466A(b)(1), we must affirm." This affirmation means that the dismissal of the possession charge stands, allowing Anderegg to avoid prosecution for possessing virtual CSAM.
This ruling raises important questions about the future of laws governing virtual CSAM and the implications for free speech. The court's decision indicates that as long as the material does not involve actual children, individuals may have a right to possess it in the privacy of their homes. This could set a precedent for how similar cases are handled in the future, particularly as technology continues to evolve.
Going forward, this ruling may impact not only Anderegg but also others who create or possess virtual CSAM. It highlights the need for lawmakers to revisit and potentially revise existing laws to address the complexities introduced by GenAI technology. The court's decision may lead to further legal challenges and discussions about the balance between protecting children and upholding First Amendment rights.
As for the possibility of an appeal, the government has the option to seek a review by the Supreme Court. However, it remains unclear whether they will pursue this route. The legal landscape surrounding virtual CSAM is rapidly evolving, and this case may serve as a catalyst for future litigation and legislative action.