The civil lawsuit filed in Centre County court alleges NCAA and its top two officials breached their contract with Penn State football coaches, players and others when they based the sanctions on the so-called Freeh report, the Centre Daily Times reported.
The suit seeks to have the sanctions rescinded and the court to order monetary damages.
"The NCAA has no authority to investigate or impose sanctions on member institutions for criminal matters unrelated to athletic competition at the collegiate level," the lawyers representing the plaintiffs wrote in the lawsuit."
The sanctions, which include a $60 million fine and a four-year bowl ban, were imposed in the aftermath of the Jerry Sandusky child sex abuse scandal.
The intention to file the lawsuit was announced Wednesday on NBC Sports' "Costas Tonight" by Paterno family attorney Wick Sollers, former U.S. Attorney General Dick Thornburgh and Paterno family spokesman Dan McGinn, the Daily Times reported.
Charges against the NCAA include breach of contract, civil conspiracy, defamation and commercial disparagement.
Sollers said the NCAA consent decree against Penn State "was imposed through coercion and threats behind the scenes and there was no ability for anyone to get redress. There was no board approval, there was no transparency and there was no consideration of this consent decree."
McGinn said the suit was an attempt to "get the record straight."
Named in the suit are five Penn State trustees, four faculty members, nine former players and two former coaches.
Penn State is not a party to the suit, university spokesman Dave LaTorre said in an email.
Penn State and NCAA officials declined comment, the newspaper said.
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