In a split ruling, the court found that in order for a California business to sue an out-of-state person or entity in state court, it must prove that the person or entity "expressly aimed" harm at the California company.

"The record fails to show that Pavlovich expressly aimed his tortious conduct at or intentionally targeted California," Justice Janice Rogers Brown wrote in the decision.

The ruling was seen as a blow to the movie industry's bid to reel in hackers, since it may spill over into other cases involving the piracy or illegal sale of movies on the Internet.