FAIRHOPE, Alabama—A federal appeals court in Atlanta will hear oral arguments next week in a lawsuit filed nearly four years ago by members of the Dyas family against the city of Fairhope, Mayor Tim Kant, and others.

Filed in April 2008 in state court in Bay Minette, the case was moved to federal court in Mobile on defendants’ motion later that year.

The sprawling complex lawsuit has generated hundreds of documents, dozens of depositions and more than a million dollars in legal fees, which have become an issue in the litigation.

In December 2010, the Mobile court dismissed all of the federal and most of the state claims, and a few months later the court denied defendants’ motion for attorney’s fees. The court then remanded the lawsuit to the initial state court.

The plantiffs appealed the court’s dismissal of claims, with the defendants appealing the denial of attorney’s fees. It’s that appeal by both parties that the 11th U.S. Circuit Court of Appeals will hear on Jan. 11 in Atlanta. The state trial has been delayed pending its outcome.

In their initial lawsuit, the plaintiffs contended that defendants illegally thwarted their attempts to develop the so-called “Dyas Triangle” and adjacent property along U.S. Highway 98, Veterans Drive and County Road 104.

They claim the city reneged on a development arrangement with them, illegally favoring a competitor’s project—the so-called “Corte Rectangle” property where there is now a shopping center anchored by a Publix Super Market.