That's a tough situation. Does seem like the original owners might be trying to make some cash off the pups. Sad! I would give a call to some rescue organizations or shelters in the area and see if they can offer you any advice. They should have a pretty good grasp on the laws regarding pets in you area.It's a really long story.
Owner 1 got her as a young puppy. They decided to get rid of her "because she destroyed a xmas present and pulled down the xmas tree" (complete bull in my opinion as she took no notice of my tree that was still up when she came to me) and gave her to friends then gave her to owner 2 (I don't know if cash was exchanged) and gave owner 2 proof of vaccinations
Owner 2 had her for 3 days and was walking past my house when she got hurt (stepped on some broken glass from nextdoor) i asked if they needed help as they had no control over her at all. They then told me that their landlord said they couldn't have dogs and did we want her. They gave her to me and then popped round her crate and the proof of vaccinations and left.
Personally I think they knew the possibility of her being pregnant and now the whelping over they want the profit of the pups otherwise why wait until now? They could have text/phoned at any point in the last 6 weeks but they didnt
Sucks that this is happening now.