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

Connie Perignon, Cyber Doll & Nicole Doshi Front Latest From Brazzers

Connie Perignon stars with Cyber Doll and Nicole Doshi in the latest release from Brazzers, titled “Bigshot Sluts Work Hard, Play Harder.”

Seth Gamble Wraps Production on Pure Taboo Drama 'The Doctrine'

Adult Time has announced that production has wrapped on the post-apocalyptic drama, "The Doctrine," directed by multi-XMAs winner Seth Gamble.

Jackie Diary Makes Her WIFEY Debut

Jackie Diary stars with her husband Chris the Captain and Damion Dayski in the latest release from Vixen Media Group studio imprint WIFEY.

Pornhub Awards Fiesta: A Night of Music, Dancing and Camaraderie

The eighth annual Pornhub Awards transformed Los Candiles Night Club in Glassell Park into a celebration of glamour, glitter, fashion and fame Wednesday night, as performers, creators and industry insiders toasted the year’s winners and danced late into the night while Diplo and Midnight Mary kept the party pulsing from behind the decks.

Carmen Valentina Stars in Latest From Elegant Angel

Carmen Valentina stars with reigning and three-time XMAs Male Performer of the Year Vince Karter in the latest release from Elegant Angel, titled "The Cure for Priapism."

Ukrainian Parliament Rejects Porn Decriminalization Bill

The Verkhovna Rada, Ukraine’s parliament, on Thursday voted against passage of a bill that would have decriminalized the creation and distribution of pornography in that country — an activity that currently carries a prison sentence of three to five years.

Cherie DeVille Leads New Gangbang From Brazzers

Cherie DeVille stars in a new gangbang from Brazzers, titled “Cherie’s Pool Party Parfait.”

Ivy Ireland Fronts Latest From Bellesa Plus

Ivy Ireland stars with Small Hands in the latest release from Bellesa Plus, titled “The Breakup.”

FSC Launches Pride Fundraising Drive

The Free Speech Coalition (FSC) has launched its Pride Fundraising Drive to support its efforts on behalf of the LGBTQ+ community.

Cultpix Debuts AI-Generated Vintage Adult Films at Cannes

At this year’s Cannes Film Festival, B-movie streaming service Cultpix debuted a collection of AI-generated short films drawn from erotic magazine photo spreads published 50 years ago.

Show More