i
TABLE OF CONTENTS
TABLE OF AUTHORITIES .......................................................................................................... iiSUMMARY OF ARGUMENT .......................................................................................................1
RELEVANT STATUTORY BACKGROUND: THE FCPA .........................................................4
UNDISPUTED FACTS ...................................................................................................................5
A.
Sidley Is Engaged for Limited Due Diligence at Changsha Valve. .........................5
B.
Deloitte Reported the Purported “Kickback Policy” to Watts in 2004. ...................7
C.
Watts Creates and Operates a New Chinese Subsidiary. .........................................7
D.
Watts and Its Newly Formed Subsidiary Begin Violating the FCPA MoreThan Two Years After Sidley’s Due Diligence at Changsha Valve. .......................8
WATTS’ COMPLAINT ..................................................................................................................9
SUMMARY JUDGMENT STANDARD......................................................................................11
ARGUMENT .................................................................................................................................11
I.
WATTS CANNOT SHIFT TO INNOCENT OUTSIDE COUNSEL THECONSEQUENCES OF WATTS’ WRONGFUL CONDUCT. .........................................11
A.
In Pari Delicto Bars Watts’ Claims. .......................................................................12
1.
In Pari Delicto. ...........................................................................................12
2.
The Complaint Establishes Watts’ Vastly Greater Culpability. ................13
B.
Watts’ Wrongdoing Proximately Caused Its Own Alleged Losses. ......................14
C.
Watts’ Claims Violate Judicially Recognized Public Policy. ................................15
D.
Contributory Negligence Bars the Negligence Claims (Counts 1 and 3). .............17
II.
FCPA WORK WAS BEYOND THE SCOPE OF SIDLEY’S ENGAGEMENT. ............18
III.
THE STATUTE OF LIMITATIONS BARS ALL THREE COUNTS. ............................21
A.
The Breach of Contract Claim Is Time-Barred. .....................................................21
B.
The Negligence Claims Are Time-Barred. ............................................................21
IV.
SUMMARY JUDGMENT IS WARRANTED ON WATTS’ DUPLICATIVECOUNTS 2 AND 3. ...........................................................................................................23
CONCLUSION ..............................................................................................................................24