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

Eli Thomas Launches 'VerifiedCollab' Verification Platform

Performer Eli Thomas has launched VerifiedCollab, a verification platform for creators and producers.

Little Puck Makes Her Deeper Debut

Little Puck has made her debut for Vixen Media Group (VMG) studio imprint Deeper, alongside Hollywood Cash, in “Respect.”

Rocco Siffredi Stars in Mainstream Italian Drama 'Blue'

Multi-XMAs winner Rocco Siffredi stars in the new Italian mainstream drama "Blue," directed by Eleonora Puglia.

Penthouse Names Natalie Grace March's 'Pet of the Month'

Penthouse Magazine has named model Natalie Grace as Pet of the Month for March.

Jessi Rae Makes Her MILFY Debut

Jessi Rae has made her debut for Vixen Media Group (VMG) studio imprint MILFY, alongside 2025 XMAs Male Performer of the Year Alex Jones.

House Committee to Weigh Online Safety Bill With Federal AV Requirement

The U.S. House of Representatives Committee on Energy and Commerce will meet Thursday to consider and potentially amend the Kids Internet and Digital Safety (KIDS) Act, which includes provisions to make age verification by adult websites federal law.

SWR Data Publishes 'Creator Income' Report

Adult industry market research firm SWR Data has published a report on creator incomes.

Stephanie Love Performs 1st Anal Fisting for Evil Angel

Stephanie Love has performed her first anal fisting scene alongside director and newly-crowned XMAs Male Performer of the Year Vince Karter in the latest scene from Evil Angel, titled “Stephanie Love Anal Gaping & Squirt.”

Penelope Reed Returns to Adult Time in New Pure Taboo Release

Penelope Reed has returned to Adult Time for the first time since 2018, starring in the latest release from studio imprint Pure Taboo, titled "The Family Ritual."

Show More