Reshelle Cable claims the microsoft violated multiple state consumer-protection and unfair-competition laws. Cable alleged that the company continued to sell the Xbox 360 even though it knew that the console's hardware was likely to fail.
According to Cable, Microsoft pushed the Xbox 360 to market in the hope of trumping machines from rivals Sony and Nintendo even thoughit was aware of problems. "[The Xbox 360's] rush to the market was detrimental to consumers because [it] suffered from numerous hardware defects," reads the lawsuit.
The Xbox 360's hardware problems - dubbed the 'red ring of death' for the flashing red lights that signal a general failure of the machine - have dogged Microsoft since the game system's first year. In July 2007, Microsoft finally acknowledged that an "unacceptable number of repairs" had to be authorised on returned units, and said that it was taking a $1bn (£587m) charge against earnings to pay for the fixes.
At the time, Microsoft also extended the Xbox 360's warranty to three years for any Xbox 360 that displayed the error signal.
The lawsuit asks that Microsoft be required to hand over profit it made by deceiving consumers and that Xbox 360 owners be refunded their money. The case sought class-action status so that other Californians could participate.
The lawsuit was filed by Keith Cable, also of Folsom. It is not known whether Reshelle Cable and Keith Cable are related. The latter did not immediately return a call for comment.
Microsoft was also not available for comment.
See also: $5m lawsuit targets Xbox 360 failures