The animals are being held in government holding pens some 320 kilometres from the five herd management areas in the Calico complex, where they were captured.
Law firm Buchanan, Ingersoll & Rooney filed the action on behalf of In Defense of Animals, ecologist Craig Downer and author Terri Farley.
The latest action highlights Judge Paul Friedman's preliminary analysis, in an earlier action that unsuccessfuly sought to stop the Calico going ahead at all, that long-term holding of wild horses in the Midwest is likely illegal.
The plaintiffs are seeking a court to order the Department of Interior to find room for the captured Calico horses on the more than 30 million acres of public lands designated as wild horse herd areas.
Early in the case, the plaintiffs secured a reprieve for the captured horses, ensuring that no horses would be moved to long-term holding and that no stallions would be gelded until Judge Friedman issued a final ruling.
This ensures that the horses remain in suitable condition to be re-introduced to the wild.
"It's time for Interior Secretary [Ken] Salazar to acknowledge that warehousing wild horses in Midwestern holding facilities is illegal and that new approaches to wild horse management are urgently needed," said William Spriggs, lead counsel on the lawsuit, which the firm is handling at no cost to the plaintiffs.
"The place to start is with the return of the Calico horses to the wild Nevada rangelands where they belong.
"Next, the Interior Department must shift its resources toward minimally feasible on-the-range management of our wild horses, as Congress intended when it passed the 1971 Wild Free Roaming Horse and Burro Act."
To date, at least 79 horses have died as a result of the Calico roundup and more than 40 heavily pregnant mares have spontaneously aborted.
In addition, an unknown number of Calico horses at the holding pens have been reported to have "Pigeon Fever," a highly contagious bacteria-based disease known to be spread by flies. The bacteria lives and multiplies in dry soil and manure.
Oral arguments in the case are scheduled for April 30. A final ruling in the case is expected by May 26.
The Calico Mountain Complex roundup of 1922 wild horses was one of the largest in recent years. The Bureau of Land Management removed at least 80-90 percent of the Calico wild horse population, leaving behind an estimated 600 horses on the 550,000 acre complex in northwest Nevada.
The roundup ended on February 4, 2010, 500 horses short of its target for removal.
The plaintiffs argue that wild horses comprise a small fraction of grazing animals on public lands, where they are outnumbered nearly 50 to 1 by livestock.
The bureau recently increased cattle grazing allotments in areas where wild horses are being removed.
Currently the BLM manages more than 256 million acres of public lands of which cattle grazing is allowed on 160 million acres; wild horses are allowed on only 26.6 million acres of this land, which must be shared with cattle.
The federal government plans to remove nearly 12,000 wild horses and burros from public lands by October 2010.
There are currently more than 36,000 wild horses warehoused in government holding facilities and only 33,000 wild horses free on the range.