Judge John Z. Lee upheld a lower‑court ruling that the First Amendment protects private possession of AI‑generated images of child sexual abuse if the images do not depict a real person. He indicated the Supreme Court may need to revisit the legal issue.

The case involved Steven Anderegg of Holmen, Wisconsin, who was charged in 2024 with creating, distributing and possessing thousands of AI‑generated child sexual abuse images. Anderegg argued the First Amendment barred the possession charge, and a district judge had previously dismissed that count, prompting the Justice Department to appeal.

The Justice Department charged Anderegg under federal obscenity statutes that apply regardless of whether a real child appears in the material. The appeals court cited Supreme Court decisions from 1969 and 2002 that protect private possession of obscenity in the home and that classify virtual child sexual abuse material not depicting a real person as non‑child‑pornography. The court clarified that the protection does not extend to downloading images from third‑party sites or storing material outside the home.

The production and distribution charges against Anderegg remain pending. The Justice Department continues to assess how existing obscenity laws apply to AI‑generated child abuse imagery.