The lawsuit stems from the longstanding agreements between the companies regarding the Fallout IP. Namely Bethesda was allowed to take the rights to the IP except for the case of a Fallout MMO, which would be under the control of Interplay. Interplay would keep these rights as long as they secured funding for the game and began production by April.
Bethesda is asserting that Interplay has breached their agreement, citing that development on the title (which has been hidden under the thinly disguised title "Project V13," standing for "Vault 13," a shelter in the Fallout universe) has not yet begun. Interplay asserts that it still holds the rights to develop Project V13 with the assistance of Masthead Studios, the group behind the upcoming post-apocalyptic sci-fi MMO Earthrise.
Want more info? The legal documents regarding the suit have been unearthed, and are ready for your perusal.