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 © 2025 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

FSC Drops Florida AV Lawsuit in Wake of SCOTUS Decision

A U.S. district court judge granted on Tuesday a motion by Free Speech Coalition to dismiss the trade association’s lawsuit over Florida’s age verification law, a case that had been on hold pending the Supreme Court’s recent ruling on the constitutionality of state AV laws.

Gal Ritchie Toplines Dorcel's 'Pigalle'

2025 XMAs winner Gal Ritchie stars with Clara Mia in the latest feature from Dorcel, titled “Pigalle.”

Ukrainian President Responds to Porn Legalization Petition

President Volodymyr Zelensky responded Tuesday to an OnlyFans model’s petition to decriminalize pornography in Ukraine, stating that he would wait for the legislative process to play out “in accordance with established procedure.”

Penthouse Names Sharna Beckman July's 'Pet of the Month'

Penthouse Magazine has named Australian model Sharna Beckman as Pet of the Month for July.

Only Tax Deductions Joins Pineapple Support as Sponsor

Adult industry accounting firm Only Tax Deductions has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

Adult Empire Launches 'Conversations' Podcast Series

Adult Empire has launched a new official podcast series hosted by Nicole Chappelle and Charlie.

Adult Time Names Alison Rey as Newest Brand Ambassador

Adult Time has named Alison Rey as the studio's newest brand ambassador.

Violet Myers Stars in Latest From Brazzers

Reigning XMAs Premium Social Media Creator of the Year Violet Myers stars with Mick Blue in the latest release from Brazzers, titled "Anal Exam."

Digital Playground Premieres Marvin Love's 'The Last Resort'

Digital Playground has debuted Marvin Love's new feature, "The Last Resort."

Juliana Marie Stars in Latest From New Sensations

Juliana Marie stars with Danny Mountain in the latest release from New Sensations.

Show More