The federal suit says Grand Rapids police decide "who belongs on the premises and who is guilty of criminal trespass" without consulting the business owner, mlive.com reported Wednesday.
The arrests were based on general letters of intent signed by the business owners, not requests to ban a particular person, the suit claims.
The ACLU filed the suit on behalf of Gilbert Weber and Tyrone Hightower, who were arrested in separate incidents of alleged trespassing. Charges were later dropped against both.
Weber was arrested in the summer of 2012 after he stopped at a gas station to stretch, the lawsuit said.
Hightower was arrested in 2011 while sitting in his car outside a bar as he waited for a friend who had gone inside,
In neither case did the business owners say the men were unwelcome, the lawsuit said.
Grand Rapids City Attorney Catherine Mish declined to comment on the lawsuit.