Though Electronic Arts claimed to pick up the publishing rights for Brutal Legend back in December, Variety's sources indicate that Activision Blizzard views the agreement as invalid due to a belief that it was still engaged in negotiations regarding the game.
Brutal Legend was originally set to be published by Vivendi, which merged with Activision to form Activision Blizzard last year. Following the merger, Activision said that the new company would not publish Brutal Legend and several other games, including 50 Cent: Blood on the Sand, Ghostbusters, and The Chronicles of Riddick.
Variety speculates that Activision is seeking a cash payment for the publishing rights, especially as the company has said it has no interest in publishing the game.
As for Electronic Arts, a company representative expressed doubt that Activision would actually sue, explaining that it would "be like a husband abandoning his family and then suing after his wife meets a better looking guy."
Double Fine never gets a break...
You would think if Activision cut them that they would be free to find a new publisher. This comes off pretty crappy after EA put on a Media Blitz during the Spike VGA's