Colwel Platinum Entertainment contends Lambert may have violated "Idol" rules when he appeared on the series while under contract with their Welsford Music Productions division.
The Hollywood Reporter said the federal-court lawsuit alleges the "Idol" rule specifically states contestants were not eligible to appear on the show if they had a recording contract at the time they auditioned.
The dispute came to a head last month when Colwel released "Beg for Mercy," a Lambert CD of material he recorded for Welsford. Lambert's attorneys filed a legal takedown notice that resulted in "Beg for Mercy" being pulled by Amazon.com.
Colwel fired back with a lawsuit claiming Lambert had a deal with them and that they spent $200,000 on the project, including paying his living expenses for a period.
The Reporter said Lambert and "American Idol" have had no comment on the matter.
Notable deaths of 2014 [PHOTOS]