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

TTS Expands Testing Coverage to 300 New Labs

Talent Testing Service (TTS) has expanded its coverage to 300 ARCPoint and Any Lab Test Now locations across the U.S.

EU Court Rejects Stripchat Challenge of Past VLOP Designation

The EU’s General Court on Wednesday ruled against Stripchat in a lawsuit seeking to annul a 2023 European Commission decision designating the site as a “very large online platform” (VLOP) under the Digital Services Act (DSA).

Penny Barber Leads Latest From MYLF

Penny Barber stars with newcomer Vince Vicious in the latest release from MYLF.

Emma Rose, Kasey Kei Star in Latest From Transfixed

Multi-XMAs winner Emma Rose and Kasey Kei star with Ameena Green in the latest release from Transfixed, titled "A Nuru Solution."

Aylo Case Against Utah VPN Rule on Hold Pending Legislative Changes

A federal court has paused Aylo’s suit over a Utah law making adult websites liable if minors bypass age verification by circumventing geolocation efforts, until the state legislature can meets to potentially amend the statute.

Dorcel Drops Franck Vicomte's 'Our First Orgy'

Dorcel has released director Franck Vicomte's latest feature, "Our First Orgy."

Khloe Kapri Headlines 'After Hours' From Sweet Sinner

Khloe Kapri toplines "After Hours," the latest release from Mile High Media studio imprint Sweet Sinner.

Angela White Stars in Jonni Darkko Blowbang Release

Multi-XMAs winner Angela White stars in a new blowbang release from Evil Angel, directed by Jonni Darkko.

Violet Voss Makes Her Deeper Debut

Violet Voss has made her debut for Vixen Media Group studio imprint Deeper alongside Alex Jones in the studio's latest release, titled "Absolution."

Kayden Kross Explores the Divine Side of Desire in 'Equilibrium'

For as long as humans have told stories, goddesses have embodied our fascination with desire, temptation and pleasure. Kayden Kross taps into that ancient fascination in "Equilibrium," her five-part fantasy feature for Deeper, where desire exists on two planes. On the surface, pleasure collides with duty, appearances and expectations. But beneath it lies an underworld of the psyche, where desire takes physical form and characters confront the parts of themselves they would rather keep buried.

Show More