tl:dr = Sony and Hotz's lawyers are squabbling over jurisdiction issues. Sony got subpoenas to get the IP addresses of everyone who saw/commented on the youtube video, visited geohot's website, and/or donated him money through Paypal before he asked for donations for legal fees. Sony fed the judge some false info in order to get a subpoena of data from Hotz's hard drives and got caught, which may paint them in a very negative light later on.
The charges that were dropped against Sony for removal of the Other OS feature were refiled with evidence that Sony lied to everyone about why they removed it. They include many quotes from Sony officials. The claims are that Sony removed it to reduce support costs and NOT due to any known or perceived security / piracy risks.
Sony vs Hotz
Sony is trying to do the whole lawsuit in it's local federal court in California, where they no doubt know the venue and judges backwards and forwards and it'd be costly for Hotz to defend himself (read: home field advantage). The problem with this is that Hotz is in New Jersey and committed his "wrongs" in New Jersey, so Sony needs to prove that a court in California has jurisdiction over him.
They've been doing a lot of b.s. like getting the
court to approve subpoenas for Hotz's website host, Youtube, and Paypal to get a list of IP addresses of people who visited his website, watched and/or commented on the "howto" youtube video he posted, and/or donated money to him through Paypal (prior to his request for legal funds, so those aren't included in the subpoena). Sony claims to be trying to prove that the majority of those IP addresses will be based out of northern California.
Sony also got the judge to approve a subpoena of Hotz's hard drives (which are currently impounded with a neutral third party) under the
guise that they likely contain Sony's PS3 SDK, which Sony's lawyers claim would have required Hotz to have an EULA with SCEA in California. Unfortunately, the SDK doesn't reference SCEA at all except as a US based contact for support and the EULA on the SDK is with Sony in Japan. In other words, Sony's legal team
fed false information to the judge and got a subpoena as a direct result.
So anyway, Hotz's lawyers called hogwash and has accused Sony's legal team of intentionally misleading the court in order to find incriminating evidence against Hotz instead of just jurisdiction information, which would be very illegal. They also provide proof of Sony's legal team playing foul with them in that they were supposed to file a joint letter by a deadline that Sony's legal team themselves set. Sony's legal team withheld critical information from Hotz's legal team until AFTER that deadline, making them incapable of meeting it.
Other OS Class Action
The case against Sony on the removal of the Other OS saw all the charges dropped except for the CFAA violation claim. However, the judge did give them the opportunity to refile the dropped charges with more evidence. They
did just that, with a rather big slap to Sony's face.
They claimed and provided quotes from Sony officials that Sony removed the Other OS not for security reasons OR to protect their IP, but because it was costly to maintain. Apparently, whenever they patched something in Game OS, it would break something in Linux and vice versa, so it was like trying to maintain two systems instead of one. So, when the slim PS3 came out, they dropped support on it to reduce support costs and when the hypervisor was hacked, Sony used it as an excuse to drop support from the fat models as well. This explains the mystery behind why Sony removed Other OS from the slim BEFORE the hypervisor was hacked. They also call Sony's bluff by stating that the Other OS feature has NEVER been used to successfully pirate a game or run a backup copy of a game, thus they have no ground to stand on when they say that disabling it was necessary to prevent piracy.
This not only provides strong evidence that Sony's #1 excuse for removing Other OS was a total fabrication, but also paints Sony in a very bad light in both this court case and the one against Hotz, as it ruins their credibility and shows that they have ulterior motives behind both this case and the one against Hotz.