Rocky Delgadillo said his office sued Rockstar Games and its parent company, Take-Two Interactive Software Inc., for making misleading statements in marketing the game and engaging in unfair competition.
A telephone call made after business hours to a Take-Two spokesman in New York was not returned.
The game, released in October 2004, features characters that commit crimes such as murder, drug dealing and pimping. The game also had an embedded "mini game" in which characters could engage in explicit sexual acts.
The industry board that rates video games gave it a mature rating but would have given it an adults-only rating if it knew of the, Delgadillo said.
The game's rating was later changed and retailers, including Wal-Mart Stores Inc., Target Corp. and Best Buy Co., pulled copies from their store shelves.
But the game was re-rated only after more than 12 million units had been sold, generating about $600 million in retail sales. The city attorney's office estimated that more than 200,000 units have been sold to date in California, generating more than $10 million in retail sales.
"Businesses have an obligation to truthfully disclose the content of their products, whether in the food we eat or the entertainment we consume," Delgadillo said.
The lawsuit, filed in Los Angeles Superior Court, was part of an ongoing investigation into the marketing of video games, authorities said. The game alsoto crack down on sales of mature-rated games to minors.
Delgadillo is seeking civil penalties from Rockstar Games Take-Two Interactive. He also is requesting that Take-Two and Rockstar take action to ensure full disclosure to consumers about the content of their video games.