The 75-year-old Rather, whose final months were clouded by controversy over the report, says the complaint stems from "CBS' intentional mishandling" of the aftermath of the story.
The lawsuit, filed in State Supreme Court in Manhattan, also names CBS President and CEO Leslie Moonves, Viacom Inc. Chairman Sumner Redstone, and former CBS News President Andrew Heyward.
Rather, the former anchorman of the CBS Evening News, is seeking $20 million in compensatory damages and $50 million in punitive damages.
CBS spokesman Dana McClintock said: "These complaints are old news, and this lawsuit is without merit."
Rather narrated the September 2004 report that claimed President Bush skirted some of his duties during his National Guard service and that a commander felt pressured to sugarcoat Bush's record. He maintains the story was true.
But an independent review for the network determined the story was neither fair nor accurate. CBS fired three news executives and a producer for airing it.