The lawsuit is at least the 12th civil suit filed against Combs, who has pleaded not guilty to racketeering conspiracy, forced sex trafficking and prostitution charges.
He has denied allegations contained in the civil lawsuits.
Graves alleged Combs and Sherman gave her a drink, likely laced with a drug that eventually caused her briefly to lose consciousness. She awoke to find herself bound and restrained.
Her lawsuit described a violent sexual assault.
More than 20 years later, Graves said she learned Combs had videotaped the encounter and shown it to multiple people, according to the lawsuit.
"Plaintiff could not believe that Defendants would record themselves committing such a gruesome crime and then proceed proudly and widely to disseminate the recording of it. She was distraught and sunk into a deep depression," the lawsuit said.
At a news conference next to attorney Gloria Allred, Graves told reporters on Tuesday the assault decades ago has greatly impacted her life.
Emotionally she explained, "The trauma of the assault has taken a toll on my mental health. I've had PTSD, depression, and anxiety. I'm emotionally scarred. It has been hard for me to trust others."
She said the violation she experienced has had lasting impacts on her body, causing ongoing health problems.
Allred said Combs has a video of the rape and has shown it to others and has sold it as pornography.
Their goal, according to Allred, is to hold Combs responsible and to achieve justice. They want damages for physical injuries, emotional distress, psychological harm, anxiety, humiliation, pain and suffering, social and family disruption in an amount to be determined at trial -- along with other damages and relief.
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