Product rating and reissue criticised the
Entertainment Software Rating Board for not issuing
San Andreas an AO rating. On 7 July 2005,
Leland Yee, the speaker
pro tempore of the
California State Assembly, issued a press release condemning the ESRB for not providing
San Andreas with an AO rating for its violence and the explicit sexual activity in the "Hot Coffee" minigame. At the time, Yee had been promoting his bill AB 450, which would require the state of
California to place warning labels on violent video games and require retailers to check for identification before selling these games to customers. On the following day, while Vance criticised Yee for his "crusade ... to undermine the integrity of the ESRB", she also announced that the Board had opened an investigation into "the circumstances surrounding the 'Hot Coffee' modification". On 12 July, meanwhile, the Australian
Office of Film and Literature Classification (OFLC) announced that it was opening its own investigation into the game at the request of
Philip Ruddock, the
Attorney-General of Australia. The OFLC had originally rated
San Andreas MA15+, which limited purchase to individuals aged 15 or older. While "Hot Coffee" had been popular among the
Grand Theft Auto modding community upon its release, Yee's comments drew the public's attention to the minigame. In a statement on his personal website, Wildenborg clarified that although he was not responsible for the creation of any explicit sexual material present in the game, such material was impossible to access without modifying the source code, and thus "Hot Coffee" could "therefore not be considered a
cheat,
Easter egg or hidden feature but is most probably just leftover material from a gameplay idea that didn't make the final release". On 14 July, Rockstar Games released a statement denouncing any responsibility for "Hot Coffee", stating that the minigame was "the work of a determined group of hackers who have gone to significant trouble to alter scenes in the official version of the game". On 20 July 2005, the ESRB announced that all editions of
San Andreas would be re-rated from M to AO. While acknowledging that Rockstar Games had not intended to make any graphic material accessible to customers, they issued the re-rating on the basis that the material was present "in a fully rendered, unmodified form on the final discs" of the game, which, "compounded by the broad distribution of the third party modification", undermined "the credibility and utility of the initial ESRB rating". As a result, major retailers such as
Walmart,
Target,
Best Buy, and
Circuit City announced that they would immediately cease all sales of
San Andreas for as long as it was rated AO. On 29 July, the OFLC stripped
San Andreas of its classification. Because Australia did not have an R18+ rating for games and it was used only for movies and TV shows at the time, the inclusion of explicit content instead resulted in a complete ban on sales of the game. In response to the re-ratings, Take-Two suspended all production of
San Andreas until they could release a version of the game that prohibited access to "Hot Coffee". By September,
San Andreas had been edited and released as an M-rated game for Windows and the Xbox. In November,
Grand Theft Auto: San Andreas – Special Edition was released for PlayStation 2 without "Hot Coffee". Outside of the US, Rockstar Games released an edited version of the game in September 2015, which received an MA15+ rating in Australia.
Federal and legal action introduced the
Family Entertainment Protection Act in response to the "Hot Coffee" scandal. Following the ESRB's announcement that they were investigating
San Andreas,
U.S. Senator Hillary Clinton petitioned the
Federal Trade Commission (FTC) to uncover the source of the game's "graphic pornographic and violent content", determine whether the game should receive an AO rating, and "examine the adequacy of the retailers' rating enforcement policies". Clinton further declared that she would begin work on a bill that would make it a federal crime, accompanied by a mandatory fine, to sell violent or sexually explicit video games to individuals under the age of 18. In addition to preventing the sale of M- and AO-rated video games to minors, the bill recommended that the FTC check annually for hidden content in existing games, such as the code that led to the "Hot Coffee" mod. The bill was referred to the
United States Senate Committee on Commerce, Science and Transportation, where it expired without action at the end of the
109th Congress. Meanwhile, on 28 July 2005, the
United States House of Representatives voted 355–21 to launch an FTC investigation against Take-Two and Rockstar Games with the intent of determining whether the developers had intentionally misled the ESRB on the content of
San Andreas to avoid an AO rating. The parties reached a settlement on 8 June 2006, with the FTC ruling that Take-Two and Rockstar Games had violated the
Federal Trade Commission Act of 1914 by failing to disclose the inclusion of "unused, but potentially viewable" nude imagery and sexual content in the game, regardless of whether the content was enabled by a third party. The settlement required that Take-Two and Rockstar Games "clearly and prominently disclose on product packaging and in any promotion or advertisement for electronic games, content relevant to the rating, unless that content had been disclosed sufficiently in prior submissions to the rating authority", with violations punishable by a fine of up to . The FTC opted not to fine either company for the "Hot Coffee" incident, but at the time of the decision, Take-Two had already incurred losses of (equivalent to in ) from the earlier recall. A similar lawsuit was filed in January 2006 by the city of
Los Angeles, headed by
City Attorney Rocky Delgadillo. Several similar claims were ultimately consolidated into one case. In October 2006, a federal judge ruled that the initial plaintiff could pursue
class action status for her lawsuit. Settlement talks between the associated parties began in February 2007, and the case was settled on 28 January 2008. All customers who purchased the game before its ESRB re-rating were eligible for a claim up to . While
San Andreas had sold over 21.5 million copies, fewer than 3,000 customers filed claims in response to this settlement. While attorneys had settled the case for , it would take less than to resolve the submitted claims, and most of the settlement cost would be in legal fees. Rockstar Games also agreed to make a charitable donation worth as part of the settlement. Because so few affected individuals pursued settlement claims, a judge decertified the settlement class on 31 July. At the time of the "Hot Coffee" controversy, Take-Two was already under investigation by the
United States Securities and Exchange Commission on charges of
insider trading involving company founder and
chairman Ryan Brant. This investigation culminated in a settlement on 9 June 2005. On 17 February 2006, Take-Two
shareholders filed a class action lawsuit alleging that the company's mishandling of various financial aspects had caused a direct, negative impact on their earnings. One example of this financial mismanagement was the company's response to the "Hot Coffee" scandal. Plaintiffs alleged that Take-Two had engaged in a
securities violation, as by "merely 'wrapping' rather than removing the Adult Content, Defendants knew that the Adult Content would inevitably be made widely available". By this point, shareholders had voted to oust most of the executive leadership at Take-Two, with
Strauss Zelnick named the new chief executive officer. == Impact ==