Yeah ... reading the story in the original post and putting that together with a lot of what the band members have said in the media over the past 2 months ... this lawsuit is not surprising at all.
Doesn't mean Atlantic doesn't suck, for sure, but at the same time, to look at it from a business standpoint from their eyes (and let's not forget they are indeed a business) ... they're sort of sitting there watching one of their biggest-selling acts reunite and talk about making more music, but doing it wiser and in a non-traditional method (i.e. without the assistance of a major record label ... Weiland pretty much said this as a direct quote more or less) ... but yet STP, or at least 2 members of the band, ARE still under contract. So if you're Atlantic, of course you're going look at all this, take it in, and then you're going to play hard ball, be dicks about it and make it tough on them to sever the ties.
I agree it makes no sense to hold the artists to the contract when they don't even want to be a part of it anymore. Similar to the way a pro sports franchise handles an athlete who is disgruntled about his contract or his position on the team. However, the end result is, whether STP is legally binded to a contract or not, putting out a shit album or a half-hearted release serves NOBODY in any good way ... not the band, not the fans, not the label ... nobody.
I think Atlantic is counting on that fact in making the decision to go ahead with this lawsuit. This isn't to say STP can't possibly find a way out of it ... but clearly Eric and Scott never took the official steps necessary to break off their agreement with Atlantic. Obviously, the DeLeo Bros. thought this whole thing through a bit more during the interim before the 2008 Reunion.