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By Avalon Zoppo

Tennessee has become the first state in the U.S. to file a lawsuit against the federal government over its refugee resettlement program on the basis that it violates the 10th Amendment and places an undue economic burden on the state's taxpayers.

The lawsuit, filed Monday in federal district court on behalf of the Tennessee Assembly and two state lawmakers, was brought by Thomas More Law Center, a conservative group hired as outside counsel. It claims that the federal government is not complying with the Refugee Act of 1980 — a law passed by Congress that designated full federal support for refugee resettlements — by forcing states to pay for the program.

Two other states — Alabama and Texas — have filed similar lawsuits, but not on the grounds of state sovereignty under the 10th Amendment, making Tennessee's legal action unprecedented.

Image: Sen. Bo Watson, center, R-Hixson, walks past demonstrators opposed to immigration restrictions
Sen. Bo Watson, R-Hixson, walks past demonstrators opposed to immigration restrictions outside the Senate Chamber on Feb. 22, 2016, in Nashville, Tenn.Mark Humphrey / AP, file

The suit claims federal reimbursements for Tennessee's refugee resettlement program were eliminated by 1991. The state opted out of the federal program in 2008 under then-Gov. Phil Bredesen due to dwindling federal funding, but the lawsuit alleges that Tennessee is still bearing the costs of refugees who are eligible for Medicaid, use public school systems or receive other social services.

"The federal government — through various regulations and statutes — coerced the state to continue funding the refugee resettlement program by threatening the state with the loss of federal Medicaid funding," the lawsuit alleges.

Related: Court Rejects Texas Lawsuit to Ban Syrian Refugees

In Tennessee, where 2,051 refugees were resettled in 2016, the suit claims that the state could lose $7 billion if it refuses Medicaid to refugees.

Republican Sen. John Stevens, who is named as a plaintiff alongside Rep. Terri Lynn Weaver, says the lawsuit is borne out of state's rights and the fiscal impact refugees have on the state.

"[The federal government] circumvented the state policymakers' desire to just not pay for this program," Stevens told NBC News. "It's a pretty significant cost to our taxpayers... We can't be economically dragooned into paying for federal programs."

As chairman of Tennessee's appropriations committee, Stevens said he is obligated to balance state's budget. He called the refugee program "economic coercion" and said it should again be fully funded by the federal government.

"We can't amend our eligibility rules to exclude refugees," he said. "We would lose our entire Medicaid funding. That's where the coercion comes in. The people of Tennessee, through their elected policymakers, have decided they do not want to participate in this program because we don't have control over the cost of it."

Image: Children of refugees who fled civil war in Sudan and have now resettled in Maryville, Tenn.
Raina Wol, 8, Alex Mathiang, 6, Ronda Wol, 7, Atem Mathiang, 8, and Moses Mathiang, 10, from left, watch TV together at the Kowat-Wol home in Maryville, Tenn., on June 27, 2014. All are children of refugees who fled civil war in Sudan.Adam Lau / AP

Since Tennessee opted out of the program in 2008, the Tennessee Office for Refugees has administered refugee resettlements instead of the state. The office is a department within the Catholic Charities of Tennessee funded by the federal Office of Refugee Resettlement.

A 2013 study by the Joint Government Operations Legislative Advisory Committee found that refugees contributed $633,359,700 to the state from 1990 to 2012 through tax collections.

"The sales tax is the primary funding for the state. The people of Tennessee are engaging in funding the state, no matter their status. Refugee resettlement has done a lot of good for a lot of people for many years,” said Rick Musacchio, director of communications for Diocese of Nashville, a branch of the Catholic Charities of Tennessee.

Civil rights groups in the state are also speaking out against the lawsuit, branding it as everything from "unjust and wrong" to an affront to Muslims.

Hedy Weinberg, executive director of the American Civil Liberties Union of Tennessee, called the lawsuit "an attack on vulnerable families fleeing from terrorism."

Related: Alabama Sues Federal Government Over Refugee Program

"This lawsuit exemplifies and fuels the growing hostility toward Muslims that extends all the way to the White House and President Trump’s statements that he wants to ban Muslims," she said in a statement. "Cruel attempts to stop the resettlement of refugees blame the victims for the very terror they are trying to escape."

For the past year, Tennessee has been embroiled in controversy over the issue of refugees. Tennessee Republicans spent much of 2016 pushing for a resolution ordering the state's attorney general, Herbert Slatery III, to sue the federal government over the refugee resettlement program. The resolution passed without Gov. Bill Haslam's signature in May 2016, but Slatery did not take action.

In a statement to NBC News regarding Monday's lawsuit, the governor's press secretary Jennifer Donnals said, "The governor's position on this has not changed since last year when he let the resolution that allows the General Assembly to file a lawsuit take effect without his signature."

The litigation also names as defendants two of President Donald Trump's Cabinet members: U.S. Secretary of State Rex Tillerson and Secretary of Health and Human Services Tom Price.