The suit is over the flood that devastated parts of Merced and Planada in 2023.
On Tuesday, the judge issued a tentative ruling to proceed with this lawsuit.
The flood victims say various state and local agencies, like the California Department of Fish and Wildlife, are responsible for the floodwaters.
The attorney representing the victims claims the CDFW knew about the incoming storm and held up the permit process for repairs along lake and streambeds.
The CDFW argues they have no liability.
The next hearing in the case is a status conference in late July.