What should I do as a reader if a paper misrepresented earlier papers? I was reading a paper from a reputable journal and found that the authors misrepresented earlier papers that they cited, by saying something like 


  Theory X was developed in [A, B, and C], but the underlying assumption was not general enough, and therefore it is insufficient to address our problem, which warrants a more general approach. 


The fact is that A, B, and C (which are well-known papers in the field) actually presented a general theory, which is applicable also to the problem considered in their paper. The rest of the paper sounds like an argument against something that was not there in the first place.

I think it is a serious misrepresentation if they did it intentionally. Otherwise, they should have been more familiar with the papers they cited. The fact that such misrepresentation slipped past the peer-reviewing stage also suggests that the review was questionable. 

As a reader of the paper, what should I do if I find such misrepresentation? 

In my case, the first author of the paper is someone I personally know.
In general, there is not much you can do. If a misrepresentation leads to erroneous results, one way is to write a "letter to the editor" straightening out the error. Such an approach does not seem right in your case since the error is to state that someone has not reached conclusions they really have. I do not mean to say that this is ok but it is harder to get a comment published when the problem, for example, does not affect future research by introducing errors. One also has to bear in mind that the error apparently escaped both reviewers and editors on the way to publication. It may also well be that the author actually see it the way they write it which means the misrepresentation is not intentional (as you seem to imply). So in the way I read the particular case, I cannot see an immediate way forward. If one writes about a problem where the conclusion you refer to is cited, it is of course possible to point out who was first and thereby contribute to setting the record straight.

So, if a misrepresentation leads to errors, it can usually be pointed out in a published letter. If the misrepresentation concerns a non-critical issue, it is still just as bad, but the possibility of publishing a clarification is much smaller. Now, clearly, these issues are on a sliding scale, so it may be difficult to see where a correction may be reasonable. In such cases, the editor of the journal where the paper was published should be able to provide some feedback on how to proceed.