[Update 2] Activision has officially responded to the lawsuit filed against it by Jason West and Vince Zampella, called the filing “meritless” and revealing the publisher’s disappointment in the action. More details follow below: [End of Update 2]

[Update 1] Released court filings from the lawsuit have revealed that Jason West and Vince Zampella are seeking unpaid royalties and damages in excess of $36 million from Activision, in addition to returning creative control over all Modern Warfare games to West and Zampella.

Furthermore, the lawsuit asks the court to rule that Activision may not release any Call of Duty games set after the Vietnam War without West or Zampella’s approval [End of Update 1]

Infinity Ward co-founders Jason West and Vince Zampella have filed a lawsuit against Activision Blizzard following the pair’s recent forced removal from their positions at the studio, claiming that they are owed “substantial royalty payments” for their work under Activision – payments (amongst other obligations) that Activision might be trying to avoid.

The lawsuit filed by the pair’s attorney, Robert Schwartz, cites “breach of contract,” as well as breach of the implied covenant of good faith and fair dealing, wrong termination in violation of public policy, and declaratory relief, and seeks to “vindicate the rights of West and Zampella to be paid the compensation they have earned, as well as the contractual rights Activision granted to West and Zampella to control Modern Warfare-branded games.”

This goes back to West, Zampella and Activision’s original contractual agreements that only Infinity Ward, most likely under West and Zampella, would be allowed to further develop Call of Duty games under the Modern Warfare brand, and after the runaway success of Call of Duty: Modern Warfare 2, Activision is most likely quite keen to expand on this offshoot of the Call of Duty series, with or without Infinity Ward, even if it means having to remove the principals of the studio that created the brand in the first place.

“Activision has refused to honor the terms of its agreements and is intentionally flouting the fundamental public policy of this State (California) that employers must pay their employees what they have rightfully earned,” said attorney Robert Schwartz.

“Instead of thanking, lauding, or just plain paying Jason and Vince for giving Activision the most successful entertainment product ever offered to the public, last month Activision hired lawyers to conduct a pretextual ‘investigation’ into unstated and unsubstantiated charges of ‘insubordination’ and ‘breach of fiduciary duty,’ which then became the grounds for their termination on Monday, March 1st.”

Jason West also commented, saying:

“We were shocked by Activision’s decision to terminate our contract. We poured our heart and soul into that company, building not only a world class development studio, but assembling a team we’ve been proud to work with for nearly a decade. We think the work we’ve done speaks for itself.”

Vince Zampella added, “After all we have given to Activision, we shouldn’t have to sue to get paid.”

It was recently announced that a new business unit under Activision has been formed specifically to steward the Call of Duty franchise in the future, while Activision’s new internal studio Sledgehammer Games will handle an action adventure entry to the franchise in 2011.

[Update] Activision’s response to West and Zampella’s lawsuit reads as follows:

“Activision is disappointed that Mr. Zampella and Mr. West have chosen to file a lawsuit, and believes their claims are meritless. Over eight years, Activision shareholders provided these executives with the capital they needed to start Infinity Ward, as well as the financial support, resources and creative independence that helped them flourish and achieve enormous professional success and personal wealth.

“In return, Activision legitimately expected them to honor their obligations to Activision, just like any other executives who hold positions of trust in the company. While the company showed enormous patience, it firmly believes that its decision was justified based on their course of conduct and actions.

“Activision remains committed to the Call of Duty franchise, which it owns, and will continue to produce exciting and innovative games for its millions of fans.”

Source: Gamasutra and Bloomberg