The lawsuit claims that officials failed to ensure the city's taxi transportation service is safe.
No charges have been laid against the taxi driver.
In the lawsuit, Marie-Anne Legault alleges she was assaulted by a cab driver during the early morning hours of Sept. 18, 2014.
Legault says she took a cab home after a beer with a friend at N sur Mackay, a downtown bar.
She says she sat in the back seat, but the driver insisted that she sit up front and she eventually agreed.
That's when the driver started to touch her and kiss her on the neck, Legault alleges.
She says she managed to escape by asking the driver to stop at a bank to let her withdraw some cash.
Lawsuit alleges prior assault
Legault's lawyer Leslie-Anne Wood said the incident should have never happened.
"We have information that the same driver assaulted another woman in similar circumstances prior to my client being assaulted," Wood told Mike Finnerty, host of CBC's Daybreak.
"I think that his permit should be removed at once."
The lawsuit also states that there is a worrying number of sexual assaults linked to taxi drivers already reported to Montreal police.
Wood said if the city had dealt with the problem and acted responsibly, the alleged assault could have been prevented.
Montreal police received 33 complaints of assaults of a sexual nature linked to a taxi driver in 2013, and 27 in 2014, according to information obtained through a freedom of information request by Wood.
Complaint to taxi bureau allegedly ridiculed
Legault also alleges officials failed to take her complaints seriously.
The lawsuit states that when Legault reported the incident to the Montreal Taxi Bureau a few weeks later, she was treated aggressively and ridiculed.
The Montreal Taxi Bureau would not comment on the specifics of the case, but a spokesperson said their protocol is to forward all complaints of sexual assault to police.
The City of Montreal has declined to comment.
Quebec Transport Minister Robert Poëti said he'll be looking into the case.
The next court date for the lawsuit is April 27.