Barbash, who inspired Lopez's character Ramona in the film, says the producers never paid her for her life story.
Barbash was the alleged mastermind behind a ring of strippers who drugged their clients and took their credit cards. She pleaded guilty in 2017 and was sentenced to five years of probation. The story of the fraud ring was first told to New York Magazine in 2015. The story found a way to the screen with "Hustlers".
Barbash's attorney Bruno Gioffre sent a letter to STX on Monday protesting the "flagrant violation of her rights". He threatened to sue if a deal isn't worked out within 10 days, reports "variety.com".
STX said it was entitled to make the movie without Barbash's permission.
"We will defend our right to tell factually based stories based on the public record and look forward to resolving this matter before a judge," an STX spokesperson said.
Last week, while talking to "TMZ", Barbash said she rejected the producers' offer for the rights to her story, saying it was less than the cost of a Hermes bag.
She said: "I wasn't giving up my TV and film rights for peanuts. J-Lo doesn't work for free - why would I?"
"Hustlers", which has released internationally, will open in India on September 27.
Along with Lopez, "Hustlers", which premiered at Toronto International Film Festival this year, also stars Constance Wu, Julia Stiles, Keke Palmer, Lili Reinhart, Lizzo and Cardi B. The film is co-produced by Lopez along with Jessica Elbaum, Elaine Goldsmith-Thomas, Lopez and Adam McKay, and is brought to India by PVR Pictures.
( With inputs from IANS )