The legal challenge, filed in a Texas district court against Homeland Security Secretary Michael Chertoff and others, also asks that the government be prohibited from separating 9-year-old Kevin Yourdkhani from his parents.
"There is simply no justification for imprisoning innocent children who pose no threat to anyone," said union staff lawyer Vanita Gupta.
"This is an affront to our core values as a nation. We need practical, realistic immigration policy, not draconian methods that are harming vulnerable kids."
Kevin and his parents, who lived in Toronto for 10 years before they were deported to Iran, were again seeking refuge in Canada last month when their flight made an unscheduled stop on American soil.
U.S. Customs officials discovered they were travelling with fake Greek passports and took them into custody.
A Toronto lawyer has applied for a temporary residency permit for the parents, who have no legal standing in Canada, but no decision has been made by Citizenship and Immigration.
Kevin, who wrote a letter to Prime Minister Stephen Harper pleading for help, declared in a court document that he sleeps in a cell with his mother right next to a toilet and there is no privacy.
"The food is garbage," he said. "I was hungry all the time for five days . . . Everybody in my pod is really sick right now. Some kids can't go to school. Lots of kids have eye infections."
His father, Majid Yourdkhani, sleeps on a separate floor although he once came to fix the boy's bed.
Officials at the T. Don Hutto facility, a converted prison just outside Austin, were angry about that and threatened to put his parents in separate jails while placing Kevin in foster care, said the boy.
"I cried and cried so much that I lost my energy and I went to sleep. I felt if I will be separated I can never see my parents again."
In the lawsuit, which includes nine other kids from various countries, the rights group charges the centre doesn't meet minimum conditions for housing minors and many children lack access to adequate medical care and education.
Children must wear prison garb, get only one hour of recreation most days and are detained in small cells for up to 12 hours a day.
Kevin's mother, Masomeh Alibegi, said Kevin lost four pounds in 10 days and has been sick with asthma but has been unable to get all the medication he needs.
"I saw my son fighting for food and it reminded me of the Holocaust."
Harper, in Toronto on Tuesday, said his government isn't "in a position to dictate what happens in other jurisdictions."
"But we are following the matter closely."
Advocacy groups have demanded the facility, which opened last May, be closed.
About half of some 400 people held there are children. None of the detained have criminal records.
"It is truly a disgrace," said Barbara Hines, clinical professor of law at the University of Texas.
"These children, who can safely be released with their families under reasonable supervision, are basically imprisoned under conditions that do not meet generally accepted child welfare and juvenile justice standards."
U.S. officials say the facility, and one like it in Pennsylvania, provide a humane way to keep families together while immigration laws are being enforced, something Congress directed them to do.
But the rights group said Congress wanted immigrant families be housed in homelike environments.
"There is nothing about Hutto that one can call non-penal or homelike," said executive director Anthony Romero.
"Imprisoning families this way cannot be what Congress had in mind."
Said ACLU legal director Lisa Graybill: "The choice is not between enforcement of immigration laws and humane treatment of immigrant families. There are various alternatives under which both can exist."
Kevin's parents say they were imprisoned and tortured after they were send back to Iran in 2005, having exhausted all the legal avenues for asylum in Canada.
Story courtesy of the Associated Press.