Antonne Jones filed the lawsuit earlier this month in Manhattan Federal Court, alleging that State Property was based upon his novel The Family: A Philadelphia Mob Story, which centers around "four men seeking 'ghetto glory' – money, power and fame."
The lawsuit says Jones rejected a $50,000 offer from Jay-Z and Damon Dash and never heard from them again.
State Property was released in 2002 and starred Beanie Sigel and his State Property rap collective as the "ABM," a group that attempts to corner Philadelphia's drug trade.
In addition to Jay-Z and Damon Dash, the film's distributor Lions Gate is named as a defendant in the lawsuit.
In related news, a former waitress at Jay-Z's 40/40 Club has sued the rapper in Manhattan Federal Court, alleging that the popular nightspot refuses to pay employees the legally required amounts for work performed.
According to The New York Post, Celese Williams claims the club keeps a cut of workers tips and doesn't pay the legal minimum wage rate for working or for overtime.
According to management for the 40/40 Club, Williams only worked at the club for four days in Dec. of 2005 and the allegations are false.
Despite Williams' short length of employment, her attorney Maimon Kirschenbaum claimed that these types violations were rampant throughout other New York City restaurants as well.