A federal appeals court dismissed a criminal charge against a Wisconsin man who used AI to generate child sexual abuse images, ruling Wednesday that private possession of such material is protected by the First Amendment. The decision immediately drew condemnation from law enforcement and child safety advocates who say the courts have failed to keep pace with technology that now produces images indistinguishable from photographs of real children.
The 7th U.S. Circuit Court of Appeals' three-judge panel upheld a February 2025 lower court ruling that threw out the possession charge against Steven Anderegg, 44. Anderegg was investigated in late 2023 after Meta reported to the National Center for Missing and Exploited Children that an Instagram user had sent an AI-generated child sexual abuse image to a minor. He was charged with creating and possessing the content and sending it to a 15-year-old boy.
The constitutional line the court refused to cross
The appellate ruling rests on two Supreme Court precedents. In Ashcroft v. Free Speech Coalition, the high court struck down a federal law that banned any material that "appears to be" explicit child abuse imagery. In Stanley v. Georgia, the justices held that the First and Fourteenth Amendments "prohibit making mere private possession of obscene material a crime," affirming that the state's power to regulate obscenity "simply does not extend to mere possession by the individual in the privacy of his own home."
Two of the three judges acknowledged the disturbing implications of their ruling but said their hands were tied. Judges John Lee and Joshua Kolar wrote in a concurrence: "We now live in an age where GenAI models can render images depicting the abuse of virtual children that are virtually indistinguishable from those depicting the abuse of actual children. ... 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."
Charges that remain and the scope of the problem
Anderegg will not face prosecution for owning the images, but charges for creating and distributing them and for sending pornography to a minor remain pending. The distinction - private possession versus production and distribution - is where the constitutional protection ends under current precedent.
The scale of AI-generated child sexual abuse material has exploded. Investigations into child sexual abuse videos jumped from just 13 in 2024 to 3,440 in 2025, according to reports cited in the case. The United Nations Children's Fund found that across 11 countries, at least 1.2 million children had been victimized by predators altering their photos into obscene deepfakes within a single year.
Law enforcement pushes back
Pensacola Police Chief Eric Winstrom told his local ABC television affiliate that the three-judge panel's decision represents a dangerous miscalculation. "The courts in this case got it wrong," Winstrom said. "I realized that this is an emerging level of technology. You know, everything changes but the courts have to keep up. And in this case, they failed."
Winstrom added: "Just because technology is moving at such a fast pace doesn't mean that the courts don't have that responsibility to have to move equally fast to keep up with it."
Why this matters for legal professionals
The 7th Circuit's ruling exposes a widening gap between constitutional doctrine and technological capability that legal practitioners will confront directly. The court explicitly said it cannot rewrite the lines drawn by Supreme Court precedent, even as Generative AI and LLM tools make it possible to produce photorealistic abuse imagery without involving an actual child victim. For prosecutors, the ruling narrows the path to charges - private possession alone is now off the table in the 7th Circuit, shifting the burden to proving production or distribution. Defense attorneys gain a clear constitutional argument, while legislators face pressure to craft statutes that survive First Amendment scrutiny without running afoul of Ashcroft and Stanley. This case is almost certain to attract Supreme Court review, and the outcome will reshape the boundaries of AI for Legal practice across criminal, constitutional, and technology law.
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