Take-Two to settle Hot Coffee suits

Publisher avoids admission of wrongdoing in class action by offering customers edited Grand Theft Auto: San Andreas or $35 cash payment.

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More than two years after the notorious "Hot Coffee" mod revealed a sex minigame hidden in Grand Theft Auto: San Andreas, Take-Two Interactive is still trying to put the incident behind it. The publisher is one step closer to that goal today, as it announced a preliminary settlement agreement that should resolve class-action lawsuits stemming from the controversy.

In March, Take-Two Interactive first said it was going to discuss a potential settlement with a customer who sued the company, alleging fraud and consumer deception stemming from the scandal. Today the publisher said it had reached a settlement (pending approval from the court) that would see the dismissal of all claims in Hot Coffee-related class-action lawsuits against the company. What's more, under the proposed settlement, neither Take-Two Interactive nor San Andreas developer Rockstar Games would admit liability or wrongdoing in the matter.

"If the case had continued, we believe the court would have agreed that Take-Two was not liable for consumers acting independently to modify their games with third-party hardware and software to access normally inaccessible content," Take-Two CEO Ben Feder said in a statement. "Nonetheless, we believe it is in the best interest of the Company to avoid protracted and costly litigation to prove our case and to finally put this matter behind us."

As for the settlement itself, Take-Two will be providing a range of remedies to customers, from an exchange program to replace AO-rated versions of the game with M-rated discs to $35 cash payments for those with detailed proof of purchase. In order to claim these benefits, customers will have to swear that they bought a copy of the game before July 20, 2005, and were "offended and upset by the ability of consumers to modify and alter the game's content" with the mod. They also would have to swear that they wouldn't have purchased the game if they'd known about the mod, and would have returned the game upon learning of the mod if they thought they could.

Take-Two has said it will spend at least $1 million on settlement benefits, but its out-of-pocket costs as a result of the agreement will be capped at $2.75 million. That amount does not include the costs of notifying members of the class and legal fees Take-Two has agreed to pay to the plaintiffs' legal representation.

The full settlement will not be disclosed until it is actually filed for court approval by the plaintiff, which Take-Two expects to happen later this month. Details on how the claims process will be handled have not yet been revealed.

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