Legal Question in Sexual Harassment in California

Federal Supreme Court said no, not illegal.

The legal treatment of simulated child pornography in the United States requires an understanding of the components of that phrase: pornography, child, and simulated. United States law treats these as separate concepts, each worthy of analysis.[citation needed]

In the United States, pornography is considered a form of personal expression, and thus governed by the First Amendment to the Constitution. Pornography is generally protected speech, unless it is obscene, as the Supreme Court of the United States held in 1973 in Miller v. California.

The United States Supreme Court's 2002 ruling in Ashcroft v. Free Speech Coalition ruled that the Child Pornography Prevention Act of 1996 was facially invalid in prohibiting virtual or cartoon child pornography. The basis for the ruling was that the CPPA made unlawful some forms of protected 1st amendment speech, banning depictions of sex between children even if not obscene and not involving real child victims. Under New York v. Ferber, if the depiction is of real child abuse or a real child victim, as a result of photographing a live performance, for instance, then it is not protected speech. Under Miller v. California, obscene speech is likewise excluded from first amendment protection. The CPPA made all virtual child sex depictions illegal without regard to whether the speech was protected or not, so that part of the statute was struck down as facially invalid.

You can find this same information on Wikipedia and on the Cornell Law site.