Kentucky vs. the DNS

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Joe Hall has a followup on the Kentucky domain names case (see here for background).
What's the upshot of all of this? To me, it's pretty scary: A state government moved to order seizure of domain names that it found were illegal "devices" and a judge issued an order demanding the transfer of these domain names before any hearing or opportunity to protest. The state has so far successfully argued that domain names are property and devices used for illegal gambling within Kentucky and that the 141 Domain Names defendants must identify themselves to have standing to contest the seizure and forfeiture. The last shoe to drop is that Judge Wingate, as part of his order from yesterday, ordered the state to rescind any forfeiture for gambling sites that block Kentucky gamers using geographical blocking methods (the wording was, essentially: Defendants who install a "software or device [...] which has the capability to block and deny access to [the defendant's] online gambling sites [...] from any users or consumers within the [...] Commonwealth [of Kentucky] and reasonably establishes to the [state] or this Court that such geographical blocks are operational, shall be relieved from the effects of the Seizure Order and from any further proceedings [in this action.]").

I'm no lawyer, but I find this whole thing really puzzling. I've got a simple question, though: is it in general true that courts in State X can serve orders on an entity located in State Y and actually have them enforced? As an example, say I'm a gambling outfit located in Nevada and I use a mail drop (non-government for simplicity) located in California, could a court in Kentucky force the mail drop to redirect all my mail to Kentucky?

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