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

Brittany Andrews Stars in Latest From Pervz

Brittany Andrews stars with Mike Ox in a new scene from Pervz series PervPrincipal, titled “MILF Principal Makes a Dirty Deal with a Student.”

Ariel Demure Leads Latest From TransSensual

Reigning XMAs Trans Performer of the Year Ariel Demure stars with Adam X Lee and Mark X in the latest scene from Mile High Media studio imprint TransSensual, titled “Two Dicks and a Drildo Does the Trick.”

Sarah Arabic Stars in Latest From Brazzers

Sarah Arabic stars with Victor Ray in the latest release from Brazzers, titled “First Time Cheater, First Time Anal.”

Chloe Temple Returns to Immoral Productions

Chloe Temple stars in a Christmas-themed trilogy from Immoral Productions, alongside Dean Van Damme and Charlie Dean.

Munro Blaxxx Makes Her Hookup Hotshot Debut

Munro Blaxxx has made her Hookup Hotshot (HUHS) debut alongside studio honcho Bryan Gozzling.

Lilly Bell Leads Latest Release From Vampired

Reigning XMAs Girl/Girl Performer of the Year Lilly Bell stars with Melody Marks in the latest release from Vampired, titled "Immortal Hunger."

Kyaa Chimera Fronts Latest From MYLF

Kyaa Chimera stars with Juan Loco in the latest release from MYLF, titled "Secret Recipe Requires a Creamy Collaboration."

Arcom-Targeted Sites Implement Age Verification in France

Five high-traffic adult websites based outside of France have implemented age verification as required under the nation’s Security and Regulation of the Digital Space (SREN) law, after receiving warnings from French media regulator Arcom.

Goddess Lilith Launches 'Adultpreneurs' Networking Site

Goddess Lilith has launched Adultpreneurs, a new community and networking site.

Leilani Li, Arson Leigh Star in Latest From Kink.com

Leilani Li and Arson Leigh star with Baxxx in the latest release from Kink.com's KinkTrans studio brand, titled "Open Your Hole, Fuckmeat!"

Show More