Italian American groups have filed a lawsuit in Philadelphia after the city's mayor replaced the Columbus Day holiday with Indigenous People's Day.
Officially observed since 1937, it commemorates Christopher Columbus landing in the Americas in 1492.
The federal suit alleges the switch is among several "continued, unrelenting, and intentionally discriminatory acts" against those of Italian descent.
The city's mayor has dismissed the suit as a "political ploy".
Columbus' complicated legacy has led to calls to cancel the holiday.
On the 500th anniversary of Columbus' voyage, in 1992, the city of Berkeley, California declared the day an "Indigenous People's Day", to mark the European colonisation of North America and its impact on Native American people and their cultures.
Fourteen US states and the District of Columbia, as well as over 130 cities, have since followed suit and now celebrate 12 October as a day to honour Native American heritage.
The truth about Christopher Columbus
The 36-page lawsuit filed on Tuesday in the US District Court for the Eastern District of Pennsylvania accuses Philadelphia Mayor Jim Kenney of acting "unilaterally" when he chose to rename the holiday this January.
A lawyer for the plaintiffs told CBS News Philadelphia it was meant to be "a power check" on the mayor's office.
In their complaint, the Conference of Presidents of Major Italian American Organisations, the 1492 Society, and an Italian American member of the Philadelphia City Council state: "While both groups' ethnicity deserves recognition, Mayor Kenney may not take action that discriminates against Italian Americans to exalt another ethnic group in its place."
The suit calls for voiding the name change, but it also makes several unexpected claims.
One assertion, made without evidence, states there is rising persecution of Italian Americans "at levels not seen since the 1920s", a time when the US set quotas on the inflow of Italian immigrants.
It also claims the mayor is "unmistakably bent on prejudicing Italian Americans" and, among other allegations, points to his role in attempting to remove a statue that is typically the centrepiece of Columbus Day festivities.
In a statement to CBS News Philadelphia, Mr Kenney dismissed the lawsuit as "a patently meritless political ploy".
Philadelphia is not the only city grappling with the fallout related to historic name changes.
School changes name from Haight to Love
A school board in San Francisco rescinded its decision to strip public schools of the names of historical figures now seen as controversial, including Abraham Lincoln and George Washington.
The plan was criticised for going too far and for relying on inaccurate Wikipedia research, but the board has stated it will revisit the proposal once students are back in classrooms full time.