A mechanic found a wireless GPS in a car owned by Ashley Judd, 45, according to a police report filed in the sisters' home state of Tennessee last month.
The Mini Cooper, at the time, was being driven by an unnamed female. The police report, which was obtained by ABC News,states that Ashley Judd proved she "had custody" of the driver.
According to the police report, Judd told one detective that she "believed Wynonna Judd placed the device on the vehicle," and told another officer that she "believed Wynonna had placed or had someone else place the device on her vehicle."
Authorities traced the GPS back to a private investigator who was "working for Wynonna Judd," according to the report.
Police documents say the private investigator gave the device to the "No One Else on Earth" singer, who, in turn, gave it to her ex-husband, Arch Kelley.
The report states that Kelley, whose two-year marriage to Wynonna ended in 1998, then "placed the device on the car."
Kelley, who has a son and daughter, Grace and Elijah, with Wynonna, has since denied the allegation.
The police report states there is an "ongoing custody dispute" amongst the Judds and it was believed the device was "placed there in order to track their movement."
Tennessee police now describe the investigation as "inactive." Ashley Judd, Wynonna Judd and Arch Kelley all declined to comment to ABC News.
In her 2011 memoir, "All That Is Bitter and Sweet," Ashley revealed that she was the victim of incest and abuse.
The "Double Jeopardy" star told ABC News' Dan Harris last year that she now has a "precious relationship" with her famous mother, Naomi Judd, and her sister, Wynonna.
"I love my sister and every time she walks in the room, I light up. There's just nothing like a big sister," Judd said. "We've learned, they've certainly been famous a lot longer than I have, and we've learned that it's really best not to dissemble our relationships in public. We do to a certain extent but the details are really none of anyone's business."
Wynonna Judd is now remarried to drummer Michael Scott "Cactus" Moser. Just months after their June 2012 wedding, Moser was involved in a motorcycle accident in South Dakota that resulted in his left leg being amputated.