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

Eva Angelina Makes Her Tushy Debut

Eva Angelina has made her debut for Vixen Media Group studio imprint Tushy.

FSC Talks Age Verification on Capitol Hill

The Free Speech Coalition (FSC) has published a blog post detailing the organization's talks on age verification on Capitol Hill in Washington.

Catherine Knight, Dolly Dyson Star in Latest From Blacked Raw

Catherine Knight stars with Dolly Dyson in the latest release from Vixen Media Group studio imprint Blacked Raw.

FTC Warns PayPal, Stripe, Visa, Mastercard Against Debanking

Federal Trade Commission Chairman Andrew Ferguson sent letters on Thursday to the CEOs of PayPal, Stripe, Visa and Mastercard, warning them against debanking practices — including denying access to services due to a customer’s lawful business activities.

AEBN Publishes Report on Ejaculate Trends

AEBN has published a report on ejaculate categories from its straight and gay theaters.

Brooke Tilli Makes Her Brazzers Debut

Brooke Tilli has made her Brazzers debut alongside studio exclusive Girthmasterr in "Who's In Charge Here!?"

Chaturbate to Hold 'CB15' Creator Retreat in Arizona

Chaturbate will hold its CB15 creator retreat in Scottsdale from April 20-23.

EU Cites 4 Adult Sites for AV Breaches

The European Commission has preliminarily found PornHub, Stripchat, XNXX and XVideos to be in breach of Digital Services Act provisions intended to shield minors from adult content.

Alison Rey, Alexis Malone Lead Latest From Swappz

Alison Rey and Alexis Malone star in the latest release from Swappz's "MomSwap" series, titled “Four-Way 69 — The Hunting Moms.”

Kazumi Guests on Chaturbate's 'Sex Tales' Podcast

Kazumi is the latest guest on Chaturbate’s “Sex Tales” podcast, hosted by Melissa Stratton and Vanniall, and streaming on the company’s “Camming Life” YouTube channel.

Show More