The four residents of Kafr Qasem allege that the company discriminated against them, treating them in a "demeaning and humiliating manner" because of their background and ethnicity.
Each of four plaintiffs is demanding NIS 50,000 in compensation.
The plaintiffs allege that they sought to board the company's 186 line to Kafr Qassem in late January only to be denied entry by the driver after he inspected their identification cards and discovered that they were Arabs.
The four say that they were removed from the bus in a humiliating fashion while non-Arab passengers boarded the bus unhindered. They also say the driver refused to give them his personal and professional information.
According to the law suit presented Monday to the Kfar Sava Magistrate's Court, the plaintiffs have suffered extreme anxiety and deep humiliation as a result of the ordeal.
The plaintiff's attorneys say that they asked Dan to clarify offer their version of the incident and issue a public apology, but did not receive an adequate