Saudi Arabia shut down Al-Haramain Foundation last October, four months after Aqil al-Aqil's name was placed on the UN list of suspects linked to al-Qaida, Osama bin Laden and the Taliban, former rulers of Afghanistan.
The US government had requested the closure.
Washington said the charity's international branches provided "financial, material and logistical" support to Saudi-born bin Laden's network, a charge al-Aqil repeatedly denied.
"Since my opponent is the American administration, which is working on the principle of 'guilty until proven innocent', then the way to clear my name is through the American judiciary," al-Aqil said in a statement.
"... I have decided to file a case against the American government in the federal court in Washington DC."
Alongside Rice, al-Aqil named Treasury Secretary John Snow, Attorney General Alberto Gonzales and Juan Zarate, the US Treasury's assistant secretary for terrorism financing.
Islamic relief agencies have built
mosques and schools in Africa
"I am not asking anything of the American judiciary - which is known for its independence - apart from justice," he said.
Since the September 11 attacks in the United States, carried out mainly by Saudis, Riyadh has tightened financial controls to stem any flow of cash to militants. US officials charge Saudi Arabia was the main source of al-Qaida funding before 2001.
The kingdom shut down Al-Haramain and said last year it was folding its assets into a new group that would channel all Saudi charitable contributions abroad.
Al-Aqil said his own bank accounts had also been frozen, despite his efforts to show that Al-Haramain had "no link to terrorism, or the acts of al-Qaida, or what happened on September 11".
The organisation, founded in the early 1990s, used to raise around $50 million a year, making it one of the largest Saudi charities. It mixed international relief work with programmes to promote Islam.
It said it provided assistance and food to Muslims in East Africa, the Balkans, Chechnya and several Asian countries. It also built 1300 mosques, sponsored 3000 preachers and produced 20 million religious pamphlets, Al-Haramain officials said.
But in March 2002, the United States listed the foundation's offices in Bosnia and Somalia as "terrorist organisations". Two years later, it added Al-Haramain's branches in Afghanistan, Albania, Bangladesh, Ethiopia and The Netherlands to the list.