International Technologies Marketing Inc. v. Cognyte Technologies Israel Ltd.

MEMORANDUM OPINION & ORDER I. INTRODUCTION For years, plaintiff International Technologies Marketing, Inc. (“Plaintiff” or “ITM”) pursued defendant Cognyte Technologies Israel Ltd., formerly known as Verint Systems, Ltd. (“Defendant” or “Cognyte”), for allegedly failing to compensate ITM for advising services it provided between 2006 and 2007 in connection with a potential acquisition. What began as a straightforward contract dispute has become a six-year odyssey for Cognyte. Several years of that odyssey stemmed directly from ITM’s bad-faith pursuit of a frivolous quantum meruit claim. As a result, Cognyte has asked the Court to impose monetary sanctions against ITM and its principal, Anthony Schehtman, for litigation misconduct under both the Court’s inherent authority and Rule 11. For the reasons set forth below, the Court grants Cognyte’s motion to impose sanctions pursuant to its inherent authority but denies — under a plain-text reading of Rule 11 — Cognyte’s motion for Rule 11 sanctions. II. BACKGROUND The Court presumes the reader’s familiarity with this case. The facts are described in several of the Court’s previous orders. See Int’l Techs. Mktg., Inc. v. Verint Sys., Ltd., 157 F. Supp. 3d 352, 357 (S.D.N.Y. 2016); Int’l Techs. Mktg., Inc. v. Verint Sys., Ltd., No. 1:15-cv-2457, 2019 WL 1245013, at *1 (S.D.N.Y. Mar. 18, 2019), aff’d, 850 F. App’x 38 (2d Cir. 2021) (summary order). What follows are the facts and procedural history that are particularly relevant to Cognyte’s motions for sanctions. See Dkt. Nos. 80-82, 218-21, 285-86. ITM filed its initial complaint in March 2015, asserting various contractual and quasi-contractual claims against Cognyte. Dkt. No. 1. The complaint’s basic allegations centered on Cognyte’s alleged failure to compensate ITM for advising services related to work on a potential acquisition. Id. at

67-90. Most relevant here, ITM asserted that it should be compensated for $350,000 in costs that it had incurred during the period of its engagement under a claim of unjust enrichment, or in the alternative, under a claim of quantum meruit. Id.