Playboy Sues Sheppard Mullin Law Firm for $7.6 Million

LOS ANGELES — Playboy Enterprises Inc. on Friday filed a $7.6 million malpractice suit against the international law firm of Sheppard Mullin Richter & Hampton LLP for allegedly exposing the adult entertainment company to millions of dollars in damages by failing to settle an employee’s claim of retaliation out of court.

The professional negligence suit, filed at Los Angeles Superior Court, said that the law firm lost the case against former Playboy controller Catherine Zulfer in "spectacular fashion" after she claimed she was fired as payback for exposing a scheme to award company executives $1 million bonuses without board approval.

Playboy had a chance to settle the Zulfer’s whistleblower suit for $1 million, but Sheppard Mullin recommended that it take its chances at trial.

Playboy claims that Sheppard Mullin gave it a 75 percent chance of prevailing in the case after it formulated a mock jury trial and polled participants. The firm estimated wage losses of between $1.5 million-$3.24 million if Zulfer prevailed in the case in a worst-case scenario, according to the suit.

But in March 2014, a Los Angeles jury returned with a verdict of $6 million in compensatory damages and a finding of malice.

Playboy’s new counsel — Engstrom, Lipscomb & Lack — said in the suit that an "attorney of ordinary skill and capacity" would have advised the company to settle the case, noted that a more thorough analysis would have showed that Playboy could be liable for an award beyond its $5 million policy limit.

Zulfer's suit maintained that Playboy violated the California Whistleblower Act and that she was terminated because of her age, which was 56 at the time.

The Playboy veteran was fired on Dec. 31, 2011, after refusing a second request to dole out unwarranted bonuses in January 2011. At that time she blew the whistle on the scheme and reported what she saw as questionable accounting practices to Playboy’s general counsel and the Securities and Exchange Commission.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

NYC Adult Businesses Seek SCOTUS Appeal in Zoning Case

Attorneys representing a group of New York City adult businesses are asking the U.S. Supreme Court to hear an appeal of a lower court’s decision allowing enforcement of a 2001 zoning law aimed at forcing adult retail stores out of most parts of New York City.

Teasy Agency Launches Marketing Firm

Teasy Agency has officially launched Teasy Marketing firm.

Kasey Kei Fronts 'Transsexual Hitchhikers 5' From GenderX

Kasey Kei stars alongside reigning XMAs Gay Performer of the Year Derek Kage in the fifth volume of GenderX Films' "Transsexual Hitchhikers," directed by Jim Powers.

Amirah Adara, Tiffany Tatum Star in Latest From MixedX

Amirah Adara and 2023 Euro XMAs Female Performer of the Year Tiffany Tatum star in the latest release from MixedX, titled “The Wrong Word.”

LorReign Performs 1st Gangbang for WIFEY

Content creator and former Colorado sheriff's deputy LorReign performs her first gangbang in the latest scene from Vixen Media Group (VMG) studio imprint WIFEY.

Richard Mann Drops 1st Evil Angel Showcase With Rebel Rhyder

Rebel Rhyder stars in Richard Mann’s first Evil Angel showcase, titled "A Day In The Life Of: Rebel Rhyder."

Amy Nosferatu Fronts Latest From TransAngels

Amy Nosferatu stars with OnlyMatt in the latest release from TransAngels, titled “It’s Giving No Thanks.”

Daphne Klyde Returns to Immoral Productions

Daphne Klyde stars in a new two-part scene from Immoral Productions alongside Charlie Dean and Matt Bird.

Erika Lust Reflects on Vanguard Legacy and the Right to Pleasure

Erika Lust has spent two decades defying assumptions about what porn can be. The Barcelona-based filmmaker and studio head has built a global reputation on a simple premise: that sex onscreen should feel human, ethical and emotionally resonant.

Ofcom Investigates More Sites in Wake of AV Traffic Shifts

U.K. media regulator Ofcom has launched investigations into 20 more adult sites as part of its age assurance enforcement program under the Online Safety Act.

Show More