The Tony Award-winning production, which is co-produced by actor Will Smith and hip-hop star Jay-Z, tells the story of late Afrobeat legend Fela Kuti.
Cuban-born author Carlos Moore filed suit in Manhattan federal court in New York on Monday (08Nov10), seeking to shut the musical down amid claims it is based on his 1982 book, Fela, Fela: This B**ch of a Life.
According to court documents, Moore was offered $4,000 (£2,670) for the rights to his authorised biography of the late musician in 2007.
He claims he turned down the "grossly insufficient" offer and demanded "an advance and participation in the royalty pool" but "no further offer was ever made".
He alleges Jones and playwright Jim Lewis used the book anyway to develop the musical without his "knowledge, authorisation or consent".
FELA! spokesman Richard Kornberg tells the New York Post he was "really shocked" by the lawsuit because Moore took part in publicity efforts for the show.
It's not the first time Fela! has been tangled in litigation - photographer Marilyn Nance filed suit against the show's producers back in July (10), alleging an iconic picture she took of Kuti's Nigerian nightclub was used in the production without her permission.
The Tony Award-winning show, which is co-produced by the stars, tells the story of late Afrobeat legend Fela Kuti and features an iconic picture of the singer's Nigerian nightclub as a backdrop.
Marilyn Nance, the snapper who took the 1977 photo of the Africa Shrine venue, is suing the show's producers for $150,000 (£100,00) alleging they used the picture without her consent.
In the legal papers, Nance's lawyer Edward Greenberg writes, "You have employed our client's registered image without her permission, license or consent."
The suit also claims the image has been used on souvenir books, the show's soundtrack CD and in a music video.
A publicist for the production, Richard Kornberg, has acknowledged the legal action and insisted Nance should have notified the producers of the problem sooner.
He tells the New York Daily News, "We tried to resolve the claim but could not, and are now in the process of replacing that image. Unfortunately, this photographer waited two years to voice an objection to our use of this image. Had she notified us earlier, we would've replaced it then."