The woman, named in court papers as "Jane Doe 51" claims O’Grady abused her between 1991 and 1992 starting when she was 11.
He was serving as a priest in San Andreas, which is in the diocese, at the time of the alleged abuse.
The woman claims the diocese is culpable because it failed to protect her by covering up his sex crimes and continuing to employ him.
O’Grady has claimed the California diocese knew about the abuse he perpetrated on children during the ’70s and ’80s, and said Church officials facilitated the abuse for two decades by moving him from parish to parish instead of removing him from ministry.
Jane Doe 51, now in her 30s, says O’Grady molested her while he was babysitting her in her family’s home. She says he used his position as a priest to gain control over her. At the time of the abuse he told her "that his conduct was proper", the lawsuit says.
Her complaint says she had been part of a devout family and would have gone to confession with O’Grady and celebrated Mass at the church where he worked.
According to the Stockton Record newspaper, Jane Doe 51 is seeking damages for negligence, sexual battery, and fraud, among other causes of action.
O’Grady has admitted to molesting as many as 25 children while a priest in California. He served seven years in jail for molesting two brothers before returning to Ireland in 2001.
He came to the public’s attention once more when he appeared in Deliver Us From Evil, a US documentary in which he admitted he Was still a danger to young children and still got aroused by them.
At the end of 2010, O’Grady was arrested after thousands of explicit images of children were discovered on computers and USB drives belonging to him. Some of the material depicted victims as young as two. Gardaí also found more than six hours of child pornography videos and in excess of 500 pages of online discussions on the subject of child pornography.
He was jailed for three years.
Earlier this month, also in Stockton, a second former altar boy alleged he was abused by Fr Michael Kelly.
On Apr 6 this year Fr Kelly, who maintains his innocence, was found "liable" of sexual misconduct against a then 10-year-old boy in the diocese more than 20 years ago.
The California diocese agreed to pay $3.75m (2.8m) to that man. By that stage Fr Kelly, a Tipperary native, had fled to Ireland.
Now another 24-year-old former altar boy has taken a civil suit naming Fr Kelly as his abuser.
He claims that he was sexually abused and harassed by the priest in the early 2000s from the age of 12.