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An appeals court ruling south of the border upheld a judge’s decision to drop a child sexual abuse material possession charge because the images were created using artificial intelligence and didn’t harm anyone.

The federal appeals judges also said a Supreme Court decision from the past was to blame for its ruling.

Steven Anderegg, from Wisconsin, was charged in May 2024 after U.S. Justice Department officials alleged he produced, distributed and possessed obscene visual depictions of minors engaged in sexually explicit conduct using generative AI. In addition, he was accused of transferring obscene material to a minor under the age of 16 through Instagram.

Authorities said Anderegg allegedly messaged a 15-year-old boy on the app about how he created thousands of child sexual abuse images and described using Stable Diffusion, an AI image generator, to convert his text prompts into images of minors.

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Hyper-realistic images

The program allowed him to create hyper-realistic images of prepubescent children engaging in sexually explicit acts, the judges said.

A lower-court judge dropped the possession charge based on a past Supreme Court ruling, leaving the Justice Department to appeal the decision.

However, the possession charge was upheld by the appeals court in a decision dated Aug. 25. The other three charges were left intact.

The judges said the right of individuals to possess obscenity in the privacy of their home cannot be infringed upon due to the First Amendment.

“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,” the ruling stated .

“This case illuminates how this evolving technology complicates the lines drawn by the Supreme Court.”

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No victims were involved

While the government has an interest in protecting children from exploitation, the judges said it didn’t apply when AI-generated images were involved as there were no victims.

In 2002, the Supreme Court ruled law enforcement and government authorities couldn’t go after individuals for possessing child sexual abuse material that involves fictional victims and is not obscene.

“Indeed, in Free Speech Coalition, the Supreme Court addressed the scope of First Amendment protections for virtual CSAM (child sexual abuse material), but that was nearly 25 years ago and the image-generation technology available today was likely unimaginable back then,” the ruling stated.

“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.”