It may be the first lawsuit of its kind.
"The city of San Francisco's homeless population is at least 50 percent disabled and it has been largely ignored," said lawyer Sid Wolinsky.
Wolinsky is referring to Mayor Gavin Newsom's brainchild, the "Care Not Cash" homeless program.
It's a program that gives teh 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.
Wolinski says there is a catch. "If you receive disability benefits such as veteran's disability benefits or social security benefits, you are automatically excluded from Care Not Cash," said Wolinski.
Jennifer Friedenbach of the Coalition for Homelessness supports the lawsuit. She says Care Not Cash is an inefficent use of 300 beds.
"Oftentimes these beds go empty even as they turn away people who try to seek shelters," said Friedenbach.
Samuel Frazier is a homeless veteran who can attest to that. He and his friends 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 are on welfare.
"The Care Not Cash" program not 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.
"Well, that's like saying we have 1,300 jobs but we only discriminate against 350 jobs," said Rohr.
Human Services Director Rohr says about one-third of Care Not Cash participants are in fact disabled homeless people who are not receiving social security or veteran's benefits.
Rohr says the city will fight the lawsuit in federal court.