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 © 2026 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

DarkFans Rolls Out 'Configure Limits' Solution

DarkFans has debuted its Configure Limits monetization solution for creators.

Clips4Sale, Free Speech Coalition Partner for 'Creator Workflow' Webinar

Clips4Sale (C4S) and Free Speech Coalition (FSC) have partnered for a webinar titled “Organization & Workflow: Simple Systems for Busy Creators.”

Sophia Locke, Lexi Luna Lead Finale of 'MILF Performers of the Year 2026'

Reigning XMAs MILF Performer of the Year Sophia Lock stars with Lexi Luna and Isiah Maxwell in the final installment of Elegant Angel’s latest release, "MILF Performers of the Year 2026."

Pineapple Support, Streamate Partner for 'Self-Parenting' Support Group

Pineapple Support and Streamate are hosting a free online support group focused on self-care for performers, titled "Self-Parenting: Becoming Your Own Safe Space."

Nerds of Porn to Relaunch Site Through MyMember.site

Nerds of Porn is relaunching its membership site through MyMember.site on Aug. 14.

Krystal Sparks Fronts Latest Reality Junkies

Krystal Sparks stars with Jay Smooth in the latest scene from Mile High Media studio imprint Reality Junkies.

Yhivi, Lulu Chu Star in Latest From Brazzers

Yhivi stars with Lulu Chu in the studio's latest release, titled “Splish Splash Squirt.”

Octavia Red, Little Puck Lead Latest From Girlsway

Reigning XMAs Girl/Girl Performer of the Year Octavia Red stars with Little Puck in the latest release from Girlsway, titled “How’s the View?”

Eva Angelina Returns to Tushy

Eva Angelina stars with Milan Ponjevic in the latest release from Vixen Media Group (VMG) studio imprint Tushy.

Show More