Yahoo Resists Marissa Mayer Deposition in $1 Billion NCAA Bracket Lawsuit

2012-38 REP Marissa Mayer H

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What are the odds that Yahoo CEO Marissa Mayer knows something about a contest that offered to pay $1 billion to whomever correctly picked all the winners of the 2014 NCAA Men's Basketball Tournament? According to SCA Promotions, a Texas company that specializes in offering insurance for these type of contests, the chances are quite good. SCA wants to depose Mayer about what she knows. Yahoo is resisting.

Last year, Warren Buffett made a splash with a "Billion-Dollar Bracket Challenge,” and while nobody walked away a billion dollars richer, some lawyers are at least collecting millions in fees for the resulting fallout.

According to SCA's complaint for breach of contract, Yahoo was to be a sponsor. SCA was to pay the $1 billion prize in the event that someone defied the extraordinary odds and correctly guessed all 63 games. In return, Yahoo would pay SCA $11 million for incurring the liability.

Yahoo canceled the contract on January 27, 2014, which SCA says meant that Yahoo had to pay a 50 percent cancelation fee. SCA never got the $5.5 million so it filed a lawsuit in March 2014.

The next month, Yahoo brought counterclaims, alleging that it had developed a "unique promotional concept" on the billion-dollar bracket, that SCA agreed to ensure confidentiality, but that SCA then approached Buffett and his Berkshire Hathaway about the contest.

"SCA acted in its own best interest in misusing and abusing Yahoo’s trust by disclosing Yahoo’s confidential and proprietary information and trade secrets to third parties," stated the counterclaims. "As a result of the acts undertaken by SCA, in an effort to mitigate its losses, Yahoo has by necessity been forced to work with third parties as part of the 'Billion-Dollar Bracket Challenge,'  which was going forward with or without Yahoo’s participation."

Now, Mayer enters the picture.

Earlier this year, Yahoo filed a motion for a protective order to shield Mayer from being deposed. A magistrate judge denied it. The parties are now in the midst of an appeal.

Last week, SCA told a district judge that Mayer was a "central player and decision-maker" in the ordeal and that Mayer's testimony would buttress its defense that "the idea for a $1 billion bracket contest is neither confidential nor a trade secret, and that Yahoo itself did not keep the concept of its contest a secret, but instead disclosed it to numerous third parties (including, significantly, Berkshire Hathaway) without any protections in place to keep that information confidential."

SCA pointed to internal Yahoo emails about Mayer's role. Several employees had written how Mayer was going to contact Buffett directly to negotiate. Other email chains allegedly revealed that Mayer had talks with Quicken founder Dan Gilbert, who sponsored Buffett's "Billion-Dollar Bracket Challenge.” Yet another employee email allegedly shows that Mayer made the final decision on the $1 billion bracket contest. One more employee email described Mayer has "very involved."

"All of these emails convincingly demonstrate that Ms. Mayer has substantial unique personal knowledge that SCA needs to explore to defend against Yahoo’s claims," argues SCA's lawyer Jeffrey Tillotson.

Lest private communications between Mayer and Buffett be explored, Yahoo is putting up an objection that Mayer represents an "apex witness," and that SCA must first seek the information from less-intrusive means such as depositions of lower-level witnesses. "The emails cited by SCA specifically demonstrate that Ms. Mayer had high-level involvement with the Concept, but not that she had first-hand, non-repetitive knowledge," adds Yahoo attorney Thomas Patrick Lane.

Yahoo also says that in any event, SCA can't dispute that Mayer wasn't the first to present the concept of a billion-dollar bracket to Berkshire Hathaway, which isn't offering the same $1 billion prize this year. Not that anyone had Villanova, Virginia and Kansas all losing this past weekend.

Twitter: @eriqgardner