Top Plaintiffs' Verdicts by Impact: Zulfer v. Playboy Enterprises Inc.

The biggest obstacle to getting a winning verdict for former Playboy Enterprises Inc. executive Catherine Zulfer came before the jury could be selected. U.S. District Judge Margaret M. Morrow had to decide whether what Zulfer alleged happened was even a form of retaliation.

Zulfer, a financial officer who'd been with Playboy for 30 years, said she was fired for protesting when other executives tried to give themselves raises without approval from the board of directors. Her firing was a form of retaliation under the Sarbanes-Oxley Act, she alleged.

Lawyers for Playboy argued that Zulfer's action wasn't protected under the law because the executives did not get their raises without board approval. Plaintiffs' attorney David M. DeRubertis successfully argued against this interpretation of the law to Judge Morrow.

"The number-one way [these] claims have been improperly limited ... in the courts is by really narrow interpretations of the protected activity prong," deRubertis said.

After convincing the judge, the next challenge was the jury.

Through focus group research, deRubertis said he learned that jurors might think the seven-month gap between Zulfer's complaint and her firing undermined her claim of retaliation. As a result, he planned to use evidence to show, "right after the protected activity, they started the plan to get rid of her."

What's more, he had to fight the defense claim that Zulfer's complaint about the bonuses was actually incorrect. He told the jury it didn't matter either way: Zulfer's job was to voice concerns over financial practices. "We framed it around, 'You fired her for doing her job,'" he said.

DeRubertis said he hoped the case, which resulted in a $6 million verdict and then settled before the punitive damages stage of the proceedings, would encourage other plaintiffs' attorneys to file similar cases in federal court. Zulfer v. Playboy Enterprises Inc., CV12-1863 (C.D. Cal., filed Sept. 25, 2012)

Usually, he said attorneys opt to go through an administrative process with the federal government rather than filing a lawsuit. "It will hopefully restore some faith in the plaintiffs' bar that Sarbanes-Oxley claims can be viable."

- LAURA HAUTALA