The Mexican American Legal Defence and Education Fund and the law firm Kiesel, Boucher and Larson are seeking class-action status for the suit, brought on behalf of an estimated 400,000 people of Mexican descent.
It claims that local officials working with the federal immigration authorities carried out a "coordinated, aggressive campaign to remove people of Mexican ancestry from California in large numbers", in violation of their constitutional rights.
"This lawsuit goes to the essence of who we are as a state and the dignity of a people," Raymond Boucher told the Los Angeles Times.
"We have to recognise that in the 1930s we used the Mexican population as a scapegoat. Until we take an honest look in the mirror, none of us is truly safe."
One of the plaintiffs, Emilia Castaneda, said she was nine when she was forced to leave her home in 1935. She was loaded on to a train and sent to Mexico after her father was put out of work by the campaign against foreign labour. "We cried and cried," she said. "I had never been to Mexico. We were leaving everything behind."
They returned to her father's home state, Durango, where they were referred to as repatriadas.
Her Spanish was weak and her family was initially passed between relatives until they found somewhere to stay.
Only when her godmother in Los Angeles obtained a copy of her birth certificate and sent it to her could she return, after presenting it to the US immigration authorities.
"As an American, I didn't deserve to be deported," she said. "All Americans should know this is part of our history so we don't have to experience this again.
"Somebody could say: "We were wrong for the injustices committed to you, and apologise for what was done. Maybe other people who are still in Mexico would hear about this and would come back."
An estimated 60% of those forcibly removed were US citizens.
Mexican immigration became a national issue in the 1920s when the pool of cheap labour Mexicans provided in the west became a source of contention with the rural south, which felt it was being undercut.
By 1930, with unemployment and demands for state welfare growing, President Herbert Hoover began a "repatriation" programme.
The plaintiffs are hoping for the kind of compensation package given by the Reagan administration to Japanese Americans interned during the second world war, settled by the threat of a class-action case.
Joseph Dunn, a Californian state senator who has been building up a case for the Mexicans for the past year, presided over a hearing yesterday to examine the forced removal.
"The deportation programme of the 1930s is not a proud chapter in American history," he said.
"Hopefully, by acknowledging this, we can minimise the likelihood of unjustly treating future immigrants to this great nation."
Mr Dunn has brought together a number of scholars who have studied the era, who testified in favour of the plaintiffs. Francisco Balderrama, professor of history and Chicano studies at Cal State University Los Angeles, said the forced removals "became a model for the rest of the United States".
Kevin Johnson, an associate dean at the University of California Davis School of Law said: "It's a bedrock principle of US immigration law that US citizens cannot be removed [from the US]. This is why this episode is so troubling to me."
A lawyer for the city, Rocky Delgadillo, said he had not yet seen the case, which was lodged on Tuesday, and so could not comment.