The notice of claim was filed Monday by attorneys representing Jose Orozco with the sheriff and the county's Board of Supervisors and seeks $1 million in damages, The (Phoenix) Arizona Republic reported Tuesday.
Sheriff's Office spokesman Tim Gaffney said in a statement, "A notice of claim was provided to our office earlier today regarding this matter. As with any pending civil litigation, it would be inappropriate to comment at this time."
Babeu, a Republican, is completing his first term as sheriff and is seeking a congressional seat in central Arizona.
Babeu's relationship with Orozco was made public Feb.17 when the Phoenix New Times alleged the sheriff and his attorney, Chris DeRose, threatened to deport Orozco, who is from Mexico, if he revealed the relationship.
On Feb. 18, Babeu, dressed in uniform, acknowledged he is gay but denied abusing his position or threatening Orozco, adding that the disclosure was meant to undermine him politically.
Babeu said after the relationship ended, Orozco posting negative material online in retaliation. The sheriff said he didn't pursue criminal charges against Orozco after he agreed to stop posting the material upon receiving a cease-and-desist letter.
A day after DeRose told The Arizona Republic that Babeu wouldn't pursue an independent investigation to clear his name, Babeu asked Attorney General Tom Horne to open an inquiry.
Besides the possible lawsuit, Babeu's 's office is under a federal investigation into whether his employees engaged in prohibited political activity while on the job.