The bombshell here (and it is just that) lies in the forced last-minute production of the agreements between Sony Computer Entertainment America (SCEA) and Sony Computer Entertainment Inc. (referred to in the papers as "Sony Japan").

To establish personal jurisdiction over Mr. Hotz, SCEA must show that he had minimum contacts with California such that it makes it fair and reasonable to sue him in that forum over this set of claims. This is so-called "limited jurisdiction," and is to be distinguished from the "general jurisdiction" that enables you to sue someone in the state of his residence over any claim whatever (see my mini-primer on the technical aspects of this here: http://news.ycombinator.com/item?id=2335698).

The key to the limited-jurisdiction analysis here is whether Mr. Hotz "purposefully directed" his activities toward California (intending that they have an effect there) in committing the acts for which he was sued. It is not enough to show incidental contacts with the state because such a standard would allow any person to be sued anywhere in the United States over any matter simply for having, e.g., purchased a product from remote state x, or had some similar tangential contact. Remember, the standard requires the court to find contacts in the forum related to the wrongs committed such as to make it reasonable to require the distant defendant to have to defend the suit remotely.

Because of this, the vital question concerns the nature of the claims asserted in the lawsuit and whether such claims show that Mr. Hotz intended to affect a California resident in committing the wrongs alleged.

And this is where the bombshell comes in: in a forced document production that SCEA managed to stall until just a few days before Mr. Hotz's reply brief was due, it had to produce the key contracts between SCEA and Sony Japan, which contracts conclusively demonstrate that all copyrights that are alleged to have been violated in this case are owned by Sony Japan exclusively and that SCEA has nothing to do with them other than being one of many licensees of such copyrights within the Sony family of companies.

In other words, SCEA appears to have nothing legitimate to do with the case other than serving as a proxy by which Sony Japan hopes to bootstrap its way into California jurisdiction. SCEA is connected with the PlayStation Network terms of service having a California forum selection clause. The problem is that none of the claims in this case concern violations of such terms of service.

The clear implication is that SCEA is a puppet being used to manipulate the court for Sony's tactical purposes. This is reinforced by several collateral indicators. SCEA filed this suit and "flooded" the case with subpoenas that went far beyond the scope of the limited discovery allowed in this sort of case. It then went to great lengths to avoid being straightforward with the court about the copyright ownership upon which the DMCA claims were based. And it has filed a blizzard of affidavits and court papers trying to confuse the main issues in the case.

Of course, nothing is completely predictable in a court matter where a court must decide an issue based on a nebulous legal standard such as whether something is "fair" or "reasonable" under the minimum-contacts jurisdictional analysis. But these revelations, to me, look pretty damning. Essentially, Mr. Hotz's attorneys have provided near-conclusive rebuttals to all of SCEA's jurisdictional claims and left SCEA looking disingenuous. Judges usually do not react well when they come to believe that a party is trying to play them, and this rebuttal does a superb job of showing that that is precisely what SCEA appears to be doing.

I would sum this up by saying: if this is all that SCEA has got, it is in trouble on the jurisdictional question (as a fallback, Mr. Hotz's lawyers have also asked that the court be transferred to New Jersey under an "inconvenient forum" analysis, which also looks pretty strong for him). It will be interesting to see how this plays out. (The factual details are a bit more complicated than I have summarized them here but this, I think, captures the essence of what is going on - see the wonderful reporting and links of Groklaw to drill down further).