Levy, who was released by the team in March, is seeking to recoup $1.75 million in salary for this season, ESPN first reported.
Hip and knee injuries limited the 30-year-old Levy to only six games over the past two seasons. Detroit cut Levy with two years remaining on a four-year, $33 million contract.
Levy injured his knee in the 2016 season opener and subsequently underwent surgery to repair a torn meniscus. He returned three months later to play in the final four regular-season games as well as a playoff matchup vs. Seattle.
Levy's contention is that the team rushed him back too soon from the surgical procedure. He said despite multiple doctors telling him the knee was not healthy, he passed his physical one day before his release, negating his salary for the 2017 season. Levy had another procedure on the meniscus in April.
"This set me back another year and has been extremely difficult to deal with," Levy told ESPN. "Physically difficult and spat on after eight years of sacrificing so much for them."
Levy joined the Lions in 2009 and topped 100 tackles on three occasions. He nabbed a career-high six interceptions in 2013 and had 12 total in 95 games (86 starts) with the Lions.
He was considered one of the top linebackers in the NFL prior to the back-to-back injury plagued seasons.