Those who are suing say this is the first time "The Americans With Disabilities Act" has been used to challenge a city government's homeless program.
In this case, San Francisco's "Care Not Cash" program which handles about 25 percent of the city's 1,300 shelter beds off limits to those in need.
The city of San Francisco's homeless population is at least 50 percent disabled and it's been largely ignored," said lawyer Sid Wolinsky.
Wolinsky is talking about Mayor Gavin Newsom's brainchild -- the Care Not Cash homeless program. It's a program that gives the homeless priority reservations for about 350 shelter beds.
Through Care Not Cash, participants on welfare can make a 45-day reservation for a bed and receive case management services as well.
"If you receive disability benefits such as veterans' disability benefits or social security disability benefits, you are automatically excluded from care not cash," said Wolinsky.
Jennifer Friedenbach of the Coalition for Homelessness supports the lawsuit. She says care not cash is an inefficient use of 300 beds.
"Oftentimes these beds go empty even as they turn away people who try to seek shelters," said Friedenback.
Samuel Frazier is a homeless veteran who can attest to that. He and his friend have been trying to get a shelter bed since they came to the city a week ago.
"There's nothing available. That's what they keep telling us," said Frazier.
"In reading it, it is really a baseless suit," said City Human Services Director Trent Rohr.
Rohr says care not cash was meant to serve only the homeless who are on welfare.
"The Care Not Cash program only sets aside less than 25 percent of all the shelter beds in the city, meaning that more than 1,000 beds are accessible still to disabled populations," said Rohr.
"Well, that's like saying we have 1,300 jobs but we only discriminate against 350 jobs," said Wolinsky.
Rohr says about one-third of "Care Not Cash" participants are in fact disabled homeless people who are not receiving Social Security or Veterans Benefits.
Rohr says the city will fight the lawsuit in Federal Court.