According to this
article on the steam support website you need to do the following:
This error commonly occurs with only the following ATI graphics cards:
Radeon X300
Radeon X700
Radeon X800
Radeon 9###
Before updating your drivers, please visit Windows Update and make sure that you have all of the critical updates and the .NET framework installed.
If you get a Failed to create D3D device error and are using any of the above ATI Cards, please update your drivers to the latest version of Catalyst by visiting the ATI driver page.
If you use a Nvidia or any other type of video card, please visit the manufacturer's website for the latest video card drivers.
If the crash persists, set the following launch option:
Go to Steam's Library.
Right-click on the affected game.
Go to Properties > General > Set launch options...
Type in -dxlevel 81.
Click OK.
Note: if you are attempting to play Left 4 Dead, Left 4 Dead 2, Portal 2, or Counter-Strike: Global Offensive, you must set your launch option to -dxlevel 90 instead.