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

Lucy Mochi Makes Her Slayed Debut

Lucy Mochi has made her debut for Vixen Media Group studio imprint Slayed, alongside Della Cate.

Platform Pulse: Inside the Technology and Trends Powering the Direct-to-fan Economy

For a brief, glittering moment, the fan-platform boom felt like a modern-day gold rush. The premise seemed simple: Open an account, post some tantalizing content and watch the subscriptions roll in. OnlyFans became a household name, "selling feet pics" became a cultural punchline and creators poured into the market hoping to claim their share of the action.

West Coast Productions Debuts Cory Chase Showcase 'Unleashed Desires'

West Coast Productions has released its latest showcase title, "Cory Chase: Unleashed Desires."

Mayalynn Makes Her WIFEY Debut

Mayalynn has made her debut for Vixen Media Group studio imprint WIFEY, alongside her husband MrJax and Don Sudan.

FSC Sets Dates, Qualifiers for December Board of Directors Election

The Free Speech Coalition (FSC) has published dates and qualifiers for its upcoming board of directors election.

Private Drops 'Pornstars Summer Getaway'

Private has released its latest title, "Pornstars Summer Getaway," directed by Xavi Rocka.

The End Is Coming: Pure Taboo Explores Post-apocalyptic Sex, Survival and Submission in 'The Doctrine'

It's the end of the world as we know it, and Seth Gamble feels fine. On a scorching hot day in the remote mountains of Santa Clarita, Gamble is directing "The Doctrine," an ambitious post-apocalyptic drama for Adult Time's Pure Taboo label.

Aylo Wins Preliminary Injunction Against Utah AV Law's VPN Rule

A federal court on Thursday issued a preliminary injunction preventing the state of Utah from enforcing a legal provision that would make adult websites liable if minors in the state circumvent geolocation efforts in order to bypass age verification.

Avery Lust Leads Latest From TransAngels

Avery Lust stars with Jack Des Feux in the latest release from TransAngels, titled "Hung Waitress."

Emma Rose Toplines 'TS Girls Do It Best 4' From TransSensual

Two-time XMAs Trans Performer of the Year Emma Rose headlines "TS Girls Do It Best 4," from Mile High Media studio imprint TransSensual.

Show More