The 'Deuce' actor and his partners at Studio 4 - which opened in 2014 but closed three years later - are the subject of a lawsuit from Sarah Tither-Kaplan and Toni Gaal, who claimed the defendants "engaged in widespread inappropriate and sexually charged behaviour towards female students by sexualising their power as a teacher and an employer by dangling the opportunity for roles in their projects".
According to the New York Times newspaper, the women alleged their actions "led to an environment of harassment and sexual exploitation both in and out of the class."
Students at the school, which had branches in Los Angeles and New York, were charged a monthly tuition cost of around $300 but there were also additional master classes costing up to $2,000, including a $750 session for sex scenes.
The lawsuit claimed those who wanted to take the sex scenes class were required to audition on videotape and "sign away their rights to these recordings."
The women are looking for monetary damages and the return or destruction of any video recordings of former Studio 4 class members.
They are also hoping the case can receive class-action status so other women who may have had similar experiences at the school can join in.
Sarah was one of the women who made allegations of sexual misconduct towards the 41-year-old actor in 2018 and said she has taken action after James failed to live up to his comments at the time.
After the accusations were made public, James said: "If there's restitution to be made, I will make it. I'm here to listen and learn and change my perspective where it's off."
But Sarah has now said: "I can't sleep at night knowing that my coming forward, originally, did not do the work that I wanted it to do yet. There still has been no action, publicly, that shows me that these people know what they did is wrong and harmful and can't been repeated."
The 'Pineapple Express' star's legal team have spoken up about the "ill-informed" complaint and vowed to "fully defend" James against the allegations, as well as seek damages from his former students.
Attorney Michael Plonsker said in a statement to The Hollywood Reporter: "This is not the first time that these claims have been made and they have already been debunked.
"We have not had an opportunity to review the ill-informed Complaint in depth since it was leaked to the press before it was filed and our client has yet to even be served. James will not only fully defend himself, but will also seek damages from the plaintiffs and their attorneys for filing this scurrilous publicity-seeking lawsuit."