The problem stems from the depiction of a character in the game known as Auntie Poulet, which apparently is too close to the Psychic Readers Network's Miss Cleo.
Auntie Poulet was leader of Vice City's Haitian gang and gives missions to protagonist Tommy Vercetti that will help her take on a rival Cuban gang.
According to website TMZ the network is claiming it's spent more than $100 million ($75m) promoting Miss Cleo over the years, and that Rockstar has made more than $500m (£375m) from copying the character. Adding to that claim, they said Rockstar even hired the actress who used to play Miss Cleo in real life, Youree Harris, and had her voice the character of Auntie Poulet.
Rockstar Games responded to the lawsuit, telling TMZ: "These claims are entirely meritless and completely ridiculous".
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There are a couple of things to know before making a snap judgment on the claim. It smacks of patiently waiting for the game to sell enough copies before hoping to capitalise on its success with a lawsuit which is probably going to be thrown all the way out.
This isn't the first time that Rockstar have been sued however with actress Lindsey Lohan filing a lawsuit against the studio for allegedly using her likeness in GTA V. That case was dismissed by a judge and it looks as if this latest lawsuit may have the same outcome.
Below are videos of Auntie Poulet in GTA Vice City, as well as a video of Miss Cleo on television.