The (Scranton) Times-Tribune ( http://bit.ly/NoKlls) says Scranton promised last fall to pay the health care organization by Jan. 5, but failed to do so.
The lawsuit filed Wednesday seeks payment of the principal as well as 5 percent interest.
Mayor Chris Doherty says the lawsuit wasn't unexpected, but he talks to Blue Cross officials regularly and the firm is still providing coverage for city employees.
He says "As soon as we get a recovery plan and financing, we'll pay them back. And they know that."
The city currently projects a $16.8 million budget deficit. Doherty temporarily cut worker pay last month when the city couldn't meet payroll
Information from: The Times-Tribune, http://thetimes-tribune.com/