A group of Brooklyn property owners filed a lawsuit in federal court Thursday in the hope of blocking the Atlantic Yards project.
The suit was announced a downtown rally.
The ten plaintiffs say the state is abusing its right of eminent domain to take their properties for the project.
They say eminent domain cannot be used to benefit a private developer, which is being done in the present case with Forest City Ratner.
"This is a textbook case of the government taking a person’s private property – their homes and their business – and giving it a private entity, a private company, Mr. Ratner, so that he can benefit," said plaintiff attorney Matthew Brinckerhoff. "And that is absolutely forbidden by the Constitution."
In response, Forest City Ratner released a statement saying "this is simply a sad attempt to delay a project that is supported by over 60% of Brooklyn."
Plans call for creating a 20,000 seat arena for the Nets basketball team and over 2,000 units of affordable housing.
The demolition of buildings on the site began months ago.