Jimmy Flynt Sues Flynt Management Group for Wrongful Termination

CINCINNATI, Ohio—In May, U.S. District Court Judge William Bertelsman ruled from his Ohio courtroom that Jimmy Flynt, the younger brother of Hustler publisher Larry Flynt, was not and had never been a 50 percent partner in the Hustler enterprise, as he claimed. Last Wednesday, the Ohio-based sibling brought suit in Ohio again, this time filing two actions in federal court—one against Flynt Management Group LLC for wrongful termination and breach of contract, and the other against longtime Hustler counsel Lipsitz, Green, Scime & Cambria and five of the firm’s lawyers, alleging legal malpractice and tortious interference.

In a 17-page complaint filed by Jimmy’s lawyer, Robert W. Hojnoski, the plaintiff contends that his termination by letter on June 15, 2009, was without cause, as was the cessation in February 2009 of his alleged salary of $250,000, and the termination of his employment benefits in June of that year, in addition to other actions alleged to have been taken against him.

“Flynt Management did not follow the normal course of events or company policy in their purported ‘termination’ of Jimmy,” reads the complaint. “No compensation or severance was offered. There was no legitimate business reason or justification nor was there ‘just cause’ to terminate Jimmy’s pay and benefits.”

Indeed, according to the narrative laid out in the complaint, the current hostilities between the brothers stem from the ill-fated attempt by Jimmy’s sons, Jimmy II and Dustin, to create their own Los Angeles-based adult production company, Flynt Media. The brothers were successfully thwarted in that attempt by Larry, who filed a trademark enforcement lawsuit against them in January 2009.

“In or around the time this trademark action was filed,” the complaint alleges, “Larry contacted Jimmy demanding that Jimmy ‘get control of his boys’ and exert pressure on his boys to comply with his settlement demands, which included monetary compensation ($100,000) and an agreement not to use the Flynt name, alone, to market products. Larry made threats to Jimmy that if he could not make the lawsuit go away (i.e., if he could not persuade his sons to give in to Larry’s demands) then he would ‘cut him off’ financially. Larry told Jimmy that he would take his (Jimmy’s) compensation/salary to fund the lawsuit that he instituted against Jimmy’s sons. Larry was blunt and unequivocal in threatening economic adversity and harm to Jimmy unless Jimmy was willing and able to exert sufficient and effective fatherly influence to affect the outcome of Larry’s federal lawsuit in Larry’s favor.”

At about the same time, according to the complaint, Jimmy started drawing his salary, which he claims was $250,000 a year, through Flynt Management LLC, as well as his health and other benefits, a 401k retirement plan, a leased car and an expense account. “Previously, Jimmy received salary and benefits from L.F.P., Inc., Hustler Entertainment, Inc., Hustler Hollywood of Ohio, Inc. and/or one or more other related/affiliated entities within the [Hustler] Enterprise,” the complaint states.

Jimmy was unsuccessful in his attempts to get his sons to stop using the Flynt name in their new business, and according to the complaint, “Beginning in February 2009, Larry embarked on a course of action intending to wrongfully discharge/terminate Jimmy and otherwise ‘squeeze’ Jimmy out of the Hustler business/enterprise.”

The alleged actions included the cessation of his salary, benefits and car between February and June of 2009; the demand that Jimmy pay the legal bills that Larry had incurred in connection with his lawsuit against Jimmy II and Dustin; and a situation involving an alleged request in April by a longtime Hustler employee that Jimmy’s company, Hustler Cincinnati, provide a loan of $400,000 to Hustler Internet Group LLC for a “mysterious ‘major project.’”

Jimmy refused to make the loan, believing it to be a fraudulent request, and states in the complant, “Larry has admitted that he gave the directive in or around April of 2009 to use a fraudulent promissory note / loan request in an effort to obtain ‘excess cash’ from the bank account(s)/possession of Hustler Cincinnati, Inc. Larry believed that he was entitled to those proceeds even though Jimmy was/is the sole shareholder/owner of Hustler Cincinnati, Inc. There was no ‘major internet project,’ no other divisions were requested to loan ‘excess cash’ and Larry/LFP Internet Group, LLC had no intention of paying the requested $400,000 loan back.”

The alleged recrimination escalated after the loan refusal, according to the complaint, including an ongoing legal action to evist Hustler Cincinnati from a Hustler-owned property downtown, and the eventual official termination of Jimmy, who is seeking $20 million dollars in compensatory and punitive damages, and attorney’s fees, costs and expenses.

AVN contacted Hustler for comment, but was told that Larry Flynt was out of town at the moment and that immediate comment would not be forthcoming.

In the other action, Jimmy Flynt is suing Lipsitz, Green, Scime & Cambria—and partners Paul Cambria, Jonathan Brown, Jeffrey Reina, Michael Deal and Joseph Gumkowski individually—alleging that the firm engaged in legal malpractice and tortious interference by failing to protect Jimmy’s legal interests between 1998 and 2009, during which time the lawyer defendants allegedly provided legal services, advice and representation to Jimmy in connection with several businesses, including Hustler Cincinnati, Hustler News and Gifts, Inc., and the Hustler Hollywood store in Monroe, Illinois, as well as other purchases and company business undertaken during that period.

The motive for that action, according to the complaint, is that “Cambria and Defendant Attorneys began taking adverse action against Jimmy in 2009 in a concerted and malicious effort to squeeze/push Jimmy out of the Hustler Enterprise so as to create the opportunity for Cambria and the Lipsitz Green firm to have increased power and control of the Hustler Enterprise, to protect their retainer agreement and yearly revenue stream and to otherwise increase the likelihood of increased revenues and professional fees in the years to come.”

Much of the basis for Jimmy’s claims appears to rest on his lingering belief that he has ownership rights in establishments such as the Hustler Hollywood stores, but the defendants in this latest action appear to be claiming that Jimmy’s failure to prevail in his partnership claim invalidates that argument.

“There is no legal basis for the lawsuit,” Paul Cambria told AVN, when contacted today for comment. “He sued Larry, claiming he was his partner, and the court ruled against him. We have turned it over to our lawyers and will let the courts resolve it.”

In the latter action, Jimmy is seeking compensatory and punitive damages of $2 million, plus attorney’s fees and costs. Both actions ask for a trial by jury.