Defendant has filed a Motion to Compel seeking documents responsive to three discovery requests served upon plaintiff: (1) an amended notice for taking depositions with accompanying document requests under Rule 34,[1]served on April 2, 2012; (2) a third set of requests for production of documents, served on July 8, 2011; and (3) a sixth set of requests for production of documents, served on March 9, 2012. (JS 3). Collectively, these requests seek electronically stored information (“ESI”), namely emails and attachments from various custodians. Because the requested ESI has been lost or destroyed and is only available on plaintiff's disaster recovery backup tapes, defendant seeks an order compelling plaintiff to restore and search its backup tapes in order to locate and produce the responsive emails and attachments. Both parties have filed Supplemental Briefs.

The Federal Rules of Civil Procedure should be administered in such a way so as “to secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed.R.Civ.P. 1; see also Landis v. North American Co., 299 U.S. 248, 254-55, 57 S.Ct. 163, 81 L.Ed. 153 (1936) (a court has the inherent power “to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants” and “[h]ow this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance”). Under Rule 26(b)(1), discovery is permitted of “any nonprivileged matter that is relevant to any party's claim or defense.” Rule 26(b) is to be “liberally interpreted to permit wide-ranging discovery of information,” even if that information is not ultimately admitted at trial. See Comcast of Los Angeles, Inc. v. Top End International, Inc., 2003 WL 22251149, at *2 (C.D. Cal. July 2, 2003); see also Fed.R.Civ.P. 26(b)(1) (“[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”). Here, the burden is on plaintiff to show that discovery should not be allowed (Comcast, at *2, citing Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975)); it is not up to plaintiff to decide what defendant needs to defend this action. Nevertheless, “[d]iscovery must be narrowly tailored ... and must not be a fishing expedition.” Zewdu v. Citigroup Long Term Disability Plan, 264 F.R.D. 622, 626 (N.D. Cal. 2010) (citing Groom v. Standard Ins. Co., 492 F.Supp.2d 1202, 1205 (C.D. Cal. 2007)); see also Myers v. Prudential Ins. Co. of America, 581 F.Supp.2d 904, 913 (E.D. Tenn. 2008) (“This approach does not mean oceanic fishing expeditions will be permitted. Much of discovery is a fishing expedition of sorts, but the Federal Rules of Civil Procedure allow the Courts to determine the pond, the type of lure, and how long the parties can leave their lines in the water.”).

*2 The rules of discovery presume that “the responding party must bear the expense of complying with discovery requests.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 358, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978). Although “[e]lectronic documents are no less subject to disclosure than paper records” (General Elec. Co. v. Wilkins, 2012 WL 570048, at *4 (E.D. Cal. Feb. 21, 2012)) (quoting Rowe Entm't, Inc. v. William Morris Agency, Inc., 205 F.R.D. 421, 428 (S.D.N.Y. 2002)), in 2006 Congress added Fed.R.Civ.P. 26(b)(2)(B) in response to concerns that the broad discovery principle announced in Fed.R.Civ.P. 26(b)(1) could cause responding parties to incur unreasonable costs in producing electronically stored information. See Advisory Committee's Notes on 2006 Amendment to Fed.R.Civ.P. 26(b)(2). Under Rule 26(b)(2)(B), “[a] party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” However, even if the party resisting discovery makes this showing, discovery may still be ordered if the requesting party shows good cause.[2]

In turn, Rule 26(b)(2)(C) requires a balancing of the costs and potential benefits of the requested discovery. Pursuant to Rule 26(b)(2)(C), a court must limit the frequency or extent of discovery if it determines that:

Email discovery is not presumptively relevant to litigation. See, e.g., DCG Sys., Inc. v. Checkpoint Technologies, LLC, 2011 WL 5244356, at *1 (N.D. Cal. Nov. 2, 2011) (in patent litigation case, discussing restrictions on email discovery that are “designed to address the imbalance of benefit and burden resulting from email production” and noting belief that the production burden of expansive e-requests outweighs their benefits); see also Introduction to Model Order Regarding E-Discovery in Patent Cases at p. 2 (Fed. Cir. 2011) (“Excessive e-discovery, including disproportionate, overbroad email production requests, carry staggering time and production costs that have a debilitating effect on litigation. Routine requests seeking all categories of Electronically Stored Information often result in mass productions of marginally relevant and cumulative documents. Generally, the production burden of these expansive requests outweighs the minimal benefits of such broad disclosure.”). Moreover, a party's disaster recovery backup tapes are generally not considered to be “reasonably accessible without undue burden or cost.” See Margolis v. Dial Corp., 2012 WL 2588704, at **2-4 (S.D. Cal. Jul. 3, 2012) (“True forms of disaster recovery tapes are not ‘reasonably accessible without undue burden or cost.’ ”). However, when it comes to ESI discovery from backup tapes, courts may consider a range of options, including cost-shifting, to alleviate the responding party's undue hardship. Fed.R.Civ.P. 26(c)(1). See Oppenheimer Fund, 437 U.S. at 358. As stated in Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 316 (S.D.N.Y. 2003):

The crux of the disagreement between the parties centers on the restoration of plaintiff's backup tapes in order for plaintiff to retrieve the emails of certain custodians.

On November 5, 2005, plaintiff initiated this action by suing defendant alleging property damage and Time Element losses in excess of $1.2 billion. Phase I discovery (dealing with coverage issues) concluded on August 26, 2010, after which Phase II discovery (dealing with the Time Element claim) commenced. (Defendant's Supplemental Brief at 3). The fact discovery portion of Phase II is currently set to conclude on August 30, 2012, and the fact deposition cut-off is currently set for October 1, 2012. With respect to the Phase II discovery at issue in the instant Motion to Compel, defendant propounded the third set of requests for production on July 8, 2011, and the sixth set of requests for production on March 9, 2012. Defendant subsequently propounded the amended notice for taking depositions with document requests on April 2, 2012.

On August 10, 2012, the Joint Stipulation was filed. The hearing on the Motion was scheduled for August 28, 2012, which the Court subsequently took off-calendar.

Defendant seeks ESI from two categories of plaintiff's employees: “agreed” and “disputed” custodians. The “agreed custodians” comprise a group of employees the parties mutually agreed would likely possess information relevant to the insurance claim. On the other hand, the “disputed custodians” are a group of twelve employees that plaintiff asserts are not key personnel with respect to the insurance claim. Defendant's amended notice of deposition with the Rule 34 document requests was directed at the disputed custodians,[3] while the third and sixth sets of requests for the production of documents were directed at the agreed custodians. (See JS, Exhibits 45, 48).

With respect to the request for ESI from the disputed custodians, defendant asserts that in order to determine plaintiff's covered losses for the Time Element claim, it seeks evidence that will allow it to identify and account for covered and non-covered issues that prompted any “loss of margin,” including specific damage in shipyards caused by wind and flood, plaintiff's performance, and whether plaintiff's methodology for determining its losses is reliable. This, according to defendant, requires an understanding of plaintiff's shipbuilding process, shipbuilding performance, the performance of shipyards before and after the hurricane, and the impact of “non-Katrina issues” on plaintiff's performance. Defendant contends that the requested emails are relevant to these topics, as the disputed custodians are/were primarily operations personnel who have specific knowledge of plaintiff's ship programs, and that the documents are necessary to aid in the depositions of plaintiff's current and former employees. (JS 2-3). As for document requests sets three and six directed at the agreed custodians, defendant seeks to have plaintiff complete its production by restoring the backup tapes and locating responsive emails for those custodians whose ESI has been lost or destroyed.[4]

*4 Plaintiff concedes that there was a failure to preserve emails on the part of numerous of its custodians, and that there was also a failure to retain the hard drives of certain custodians when they left the company. (JS 6). Plaintiff explains that on December 7, 2005, it distributed a litigation hold notice to 26 employees who were considered likely to possess documents relevant to the Katrina insurance claim (this included employees on the Hurricane Katrina Insurance Claim Team, key personnel involved in the Katrina recovery and rebuilding efforts, and key personnel involved in the financial impact of Katrina). (JS 58). According to plaintiff, throughout 2008, “[a]s the adjustment process and the litigation expanded ... and the parties began to focus on business interruption quantum issues,” plaintiff's litigation hold was expanded to add more key personnel who were likely to possess documents relevant to the business interruption claim. (JS 59). In total, all of the “agreed” custodians and nine of the disputed custodians eventually received a litigation hold. (JS 59). Nevertheless, despite the litigation holds, numerous custodians failed to preserve their emails, and plaintiff failed to retain the hard drives of other custodians who left the company. (JS 58). Therefore, the emails of certain custodians –– including the disputed custodians who were never given a litigation hold –– can presently only be obtained through the restoration of plaintiff's backup tapes. To mitigate the “preservation issues,” plaintiff has agreed to produce emails obtained from every available alternative source short of restoration of the backup tapes. (JS 6, 60-61).

Plaintiff argues that defendant's request for an order compelling plaintiff to restore and search its backup tapes would violate Rule 1's directive that litigation should proceed in a “speedy” and “inexpensive” manner, as well as Rule 26(b)(2)(C)'s rule of proportionality. In particular, plaintiff asserts (1) that the information sought is “unreasonably cumulative” and defendant has already obtained (or soon will obtain) much of the sought after information from other sources; (2) that defendant had “ample opportunity” during this litigation to obtain the information it now seeks but chose to wait until the final months of fact discovery to do so; and (3) that the burden of the discovery outweighs its likely benefit. (JS 5). Plaintiff asserts that because it has already produced “massive amounts of information,” “it simply is not credible to believe that [defendant] does not ‘understand’ [plaintiff's] processes and performances or that a deponent's email is going to provide any new or material information regarding those processes and performances.” (JS 54).

As for the backup tapes, plaintiff states that approximately 3500 tapes exist, and of those, approximately 2000 contain material deemed “Classified” by the United States government.[5] In an effort to establish undue burden and cost, plaintiff has submitted declarations explaining the restoration process for both the classified and non-classified tapes.

According to plaintiff, the classified tapes require an elaborate, expensive, and time-consuming process for the restoration and retrieval of documents. To explain the process, plaintiff has submitted the declaration of employee Jason Brown, a Director of Information Technology. Brown explains that all of plaintiff's backup tapes dating from August 2007 and before (1,931 in total) have been designated “Classified-Secret” by the Department of the Navy. Because of this Classified designation, restoring the backup tapes and producing the requested information involves a “lengthy[,] multi-step” process. (JS, Exhibit G, Declaration of Jason M. Brown (“Brown Decl.”) ¶ 13). First, plaintiff must obtain permission from the Department of Defense (“DoD”) before undertaking the restoration because the classified information on the tapes relates to multiple classified DoD projects. The DoD would need to issue a new contract authorizing restoration of all of the classified backup tapes at issue and, according to Brown, it is not known “how likely the DoD would be to grant such a request, or if it would grant the request at all.” (Brown Decl. ¶ 14). Second, assuming the DoD issued a new contract, the next step would be to construct, at plaintiff's expense, a secure “Closed Area” which could be used to restore and process the information from the backup tapes. The “Closed Area” would need to meet the requirements set forth in the National Industrial Security Program Operating Manual (“NISPOM”) as well as any additional requirements from the DoD. Plaintiff would first attempt to find an appropriate existing space, but if none were available, plaintiff would be required to physically build a compliant space. Brown estimates that it could take approximately 6 months to obtain approval from the DoD and to create the Closed Area. (Brown Decl. ¶¶ 15-17). Next, plaintiff would have to obtain DoD accreditation for the Closed Area pursuant to the requirements set forth in the Defense Security Service Industrial Security Field Operations Process Manual (“DSS ISFO Process Manual”), which Brown estimates would take an additional 176 days. (Brown Decl. ¶¶ 20, 21). Lastly, the space would need to be outfitted with the equipment necessary to conduct the actual restoration. Restoration of the cataloguing system would then be handled by a third-party vendor, which could take up to 12 months. (Brown Decl. ¶¶ 18, 19). Overall, Brown estimates that this entire process (i.e., obtaining DoD approval and a new contract from the DoD, constructing the Closed Area, obtaining accreditation from the DoD, and having the third-party vendor conduct the restoration of the cataloguing system) would take approximately one year. The actual restoration of the classified backup tapes could then take up to an additional year, depending on the number of tapes that are ultimately determined to contain emails for the requested custodians. (Brown Decl. ¶ 23). This estimate does not include the time to search the tapes for information responsive to defendant's discovery requests, which Brown explains must be done only by individuals with “Secret” security clearances, and who are preapproved by the DoD. Additionally, the form in which the responsive information may be produced is governed by the DSS ISFO Process Manual. (Brown Decl. ¶¶ 23-25). Based on the foregoing, Brown estimates that it could take one to two years and cost more than $1.4 million to restore the classified tapes and produce responsive documents. (Brown Decl. ¶ 19).

*5 To describe the process for restoring the non-classified tapes, plaintiff has submitted the declaration of employee Timothy Rivera, a Manager of Information Systems Technology. Rivera explains that there are approximately 1,500 non-classified backup tapes for the period July 22, 2007, through January 30, 2009. (JS, Exhibit H, Declaration of Timothy C. Rivera (“Rivera Decl.”) ¶ 8). During the backup process, Exchange mailboxes were divided into “messaging databases” that were in turn organized into nine “storage groups.” Distribution of the messaging databases across the nine storage groups was based on the system's architectural design and not on plaintiff's organizational structure. Thus, until the backup tapes are reviewed, plaintiff cannot determine onto which tapes a particular custodian's mailbox may have been stored. (Rivera Decl. ¶ 9). Rivera explains that the number of tapes that would need to be restored for a selected group of Exchange account users depends on two variables: (a) on how many of the nine storage groups were the selected group of mailboxes backed up; and (b) over what period of time. (Rivera Decl. ¶ 11). During the time period for which the tapes were retained, there are a total of 39 “storage dates” that could possibly be restored. (Rivera Decl. ¶ 12). To determine the number of restores that would have to occur for a selected group, plaintiff has begun the process of searching its “Active Directory archives” to locate the servers that contain emails for each of the selected group of Exchange account users. (Rivera Decl. ¶ 14). If it turns out that all nine storage groups from each of the 39 storage dates will need to be restored in order to locate responsive information, Rivera estimates it would take plaintiff “nearly a year” to do so at a cost of $146,000. (Rivera Decl. ¶¶ 15, 15.2, 15.5). While the restoration is being conducted, a messaging operations engineer would prepare a database to process the restored information and export the information as “Personal Storage Table” (“PST”) files. (Rivera Decl. ¶ 16). Rivera's estimate is based on the assumption that Northrop personnel would conduct the restoration. Rivera states that he is “not aware of any outside vendor who currently has the technical capabilities to handle the requirements of this project because restoration requires an outdated server environment.”[6] (Rivera Decl. ¶ 15.4).

In its Supplemental Brief, defendant contends that plaintiff has “grossly overstate[d] its estimates of the time and cost burden” to restore the backup tapes. (Defendant's Supplemental Brief at 5). In support of its contention, defendant has submitted declarations from two consultants: the first, a declaration from an information security consultant, who was retained to independently analyze the procedure to restore the classified tapes as described by plaintiff; and the second, a declaration from a senior client advisor for third-party vendor Renew Data Corp. (“RenewData”), who was retained to analyze the process described by plaintiff for restoring the non-classified tapes.

With respect to the restoration of the classified tapes, defendant's retained security consultant presents a vastly different estimate. While agreeing that the restoration must be accomplished in a “cleared-for-Secret space” under a United States Navy contract, the consultant states that after the contract is issued, a limited-access or closed-area space that meets all the requirements of the DoD and NISPOM may be used, and that “[t]here are existing Government facilities in the Gulf Coast Region which meet these requirements and are available for lease.” (Defendant's Supplemental Brief, Exhibit M, Declaration of Zunelle Bookhardt (“Bookhardt Decl.”) ¶¶ 4, 5). Therefore, “[t]here is no need [for plaintiff] to construct a new facility and obtain accreditation for a new facility.” (Bookhardt Decl. ¶ 5). Defendant's security consultant explains that after the US Navy contract is issued, plaintiff “would be able to obtain clearance from the [Defense Security Service] to process the classified tapes ... in a matter of 2-4 weeks.” (Bookhardt Decl. ¶ 8). The consultant does not address the issue of restoring the cataloguing system or the time required to search the restored tapes for responsive emails.

With respect to the non-classified tapes, the consultant from RenewData states that “[b]ased on the information provided [by plaintiff in connection with the Joint Stipulation],” he believes that “RenewData's standard process for backup tape restoration would apply if we were asked to restore and search backup tapes in this matter.” (Defendant's Supplemental Brief, Exhibit N, Declaration of Danny R. Aga (“Aga Decl.”) ¶ 5). The “process flow” would entail the following: performing tape extractions for the emails, pulling custodian mailboxes from Exchange database files into PST files, deduplicating data, and loading deduplicated messages into a hosted review platform. (Aga Decl. ¶ 5). According to the RenewData consultant, this “process flow is very typical and has been used for the majority of email backup tape restoration jobs throughout RenewData's history,” and RenewData “has developed proprietary tools to facilitate accomplishing the [restoration process] in a very timely and cost effective manner, well beyond what an IT department could accomplish.” (Aga Decl. ¶ 10). Given that there are 1500 non-classified tapes encompassing 39 different points in time, it can be assumed that a single backup set is approximately 39 tapes. Applying a “25% email assumption” to the 39 tapes, there would be approximately 10 tapes containing Exchange backups for every point in time. (Aga Decl. ¶ 7). Based on this scenario, the RenewData consultant states that

(Aga Decl. ¶¶ 8, 9). The consultant also explains under the circumstances presented here, most likely “95% of the available documents contained on all available tape sets can be recovered through restoring 25% of the weekly tape sets (i.e. one set per month). Thus with 39 tape sets here, the parties could likely obtain 95% of the total by restoring only 10 tape sets.” (Aga Decl. ¶ 13). The consultant estimates, under this scenario of restoring 10 tape sets, that the total cost of the restoration would be in the $40,000 to $60,000 range, and take approximately 12-14 business days. (Aga Decl. ¶ 13).

The Court must balance the overall likelihood that the restored emails from the backup tapes will prove relevant to the instant litigation against whether the cost of restoration and the time required places an undue burden on plaintiff and the Court. After considering the parties' arguments, supporting evidence, and cited authorities, including the weighing of numerous factors ––such as plaintiff's failure to preserve the emails, the late timing of defendant's Motion to Compel, the expense and time required to complete the restoration of the classified and non-classified tapes based on the parties' differing estimates, and the degree of relevance of the requested ESI –– the Court concludes that, although the backup tapes are not reasonably accessible, it would not place an undue burden on plaintiff to produce ESI from the non-classified tapes according to the Court's limitations described below. With respect to the classified tapes, however, the Court finds that plaintiff has sufficiently shown that defendant's discovery requests are unduly burdensome, and that defendant has not demonstrated good cause to overcome this showing of burden.

The Court notes that the cut-off for fact discovery is currently set for August 30, 2012. Defendant, however, did not file the instant Motion until August 10, 2012, which resulted in a hearing scheduled for August 28, 2012, just two days before the deadline –– a circumstance which alone could justify denying the Motion with respect to the requests for production of documents. Moreover, the fact deposition cut-off, currently scheduled for October 1, 2012, is also rapidly approaching, and even under defendant's best case scenario for restoring the backup tapes and recovering ESI, it is unlikely that the restoration would result in any document production by the October 1, 2012, deadline. Although defendant asserts that the emails on the backup tapes are relevant and necessary to properly evaluate the Time Element claim, this delay in moving to compel production until the last month of fact discovery belies defendant's assertion –– especially considering that one of the requests for production of documents was propounded back in July 2011, more than a year before the instant Motion was filed. If the requested ESI were truly essential to the Time Element claim, it is unlikely that defendant would have waited until this late in Phase II discovery to seek to obtain the documents. In other words, the delay itself appears to indicate that the requested emails are of only marginal relevance to defendant in this action –– especially taking into consideration the evidence showing that plaintiff has already produced voluminous quantities of documents relating to both the Time Element claim (including documents relating to its ship-building programs and performance both pre– and post-Katrina), and to the requested custodians themselves (including documents from the custodial files, the custodians' emails and attachments that were preserved, and/or other documents and emails that reference the custodians). (See JS 49-52). Although defendant asserts that recovering the lost or destroyed emails is necessary for refreshing custodians' memories during depositions, there is no indication that defendant has been unable to conduct a meaningful deposition of any custodian due to missing documents, or that there is any void in the overall document production with respect to any particular topic relevant to the Time Element claim. Thus, because this discovery was not pursued in a timely manner, and in light of the substantial amount of relevant documents defendant has already received from plaintiff during the many years that this case has been litigated, it does not appear that the requested ESI is essential to the defense of this action.

*7 The Court next considers plaintiff's failure to preserve ESI. “Federal courts have long recognized a duty of the parties to preserve relevant evidence for litigation.... The duty to preserve attaches not just when suit is filed, but whenever a party knows or should know that evidence may be relevant to anticipated litigation,” and its scope “extends to electronic documents, such as e-mails and back-up tapes.” AAB Joint Venture v. U.S., 75 Fed.Cl. 432, 440-41 (Fed. Cl. Feb. 28, 2007) (citations omitted). Because plaintiff caused the discovery problem by failing to preserve the emails at issue –– even though the failure appears to be wholly inadvertent and not intentional –– plaintiff should not in effect be rewarded for its noncompliance by relieving it of any obligation to retrieve the lost or destroyed emails. See id. at 443 (“Defendant's decision to transfer the e-mails to back-up tapes does not exempt Defendant from its responsibility to produce relevant e-mails.”); Linnen v. A.H. Robins Co., 1999 WL 462015, at *6 (Mass. Super. Ct. June 16, 1999) (“To permit a corporation ... to reap the business benefits of such technology and simultaneously use that technology as a shield in litigation would lead to incongruous and unfair results.”); but seeMajor Tours, Inc. v. Colorel, 720 F.Supp.2d 587, 621 (D.N.J. 2010) (finding no abuse of discretion where magistrate judge ruled that because the backup tapes “were likely to produce evidence of only marginal, cumulative benefit, and at great expense,” “this outweighed the slim likelihood of the discovery of non-cumulative evidence even if there was some unknown degree of negligent spoliation”).

Additionally, although plaintiff asserts that it has attempted to mitigate the preservation failure by offering extra time for the custodial depositions and by producing ESI from alternative accessible sources, this does not fully resolve the discovery dispute. Such mitigation attempts could still in the end deny defendant the custodians' emails as there is no way to confirm that the emails from the alternative sources encompass all of the responsive ESI from the requested custodial files. Plaintiff also objects on the ground that searching the restored tapes would only yield cumulative information that has already been produced. However, without having any way to review the emails stored on the backup tapes, it is not possible to determine if there is any foundation for plaintiff's objection. Under these circumstances, the Court finds that plaintiff has not met its burden of demonstrating that defendant's discovery requests seek only cumulative information.

Balancing the factors regarding timing and relevance (which weigh against defendant) against the failure to preserve (which weighs against plaintiff), the Court finds that the outcome of the Motion primarily hinges on whether there is undue burden. The parties have presented drastically different estimates with respect to the time and cost burden associated with restoring the classified and non-classified tapes. With respect to the classified backup tapes, both parties agree that they cannot be restored absent a DoD or US Navy contract. The Court notes that according to defendant's estimate of the time and cost required to restore the classified tapes, the restoration could be completed in just a matter of weeks once the DoD or US Navy issues plaintiff the contract to undertake the restoration process. Defendant's estimate assumes, however, that the DoD or US Navy will readily issue the requisite contract. Defendant does not provide any basis for such an assumption, or set forth with any specificity the amount of time needed to obtain such a contract. On the other hand, plaintiff states that given the circumstances of this case, it is not known how likely the DoD would be to grant permission to restore the classified backup tapes, or how long it would take to obtain the requisite contract in the event permission is granted. Because of plaintiff's extensive involvement with the DoD and US Navy, plaintiff's interpretation of the restoration process for the classified tapes appears to be the more realistic of the two versions presented by the parties –– especially considering that, in giving its estimate, defendant did not address certain particulars of the restoration process, such as the time required for restoring the cataloguing system, and did not estimate how much time would be required to search the restored tapes for responsive emails. Thus, given the complexity of the restoration process with respect to the classified tapes –– in particular the fact that plaintiff must obtain a new contract from the DoD or US Navy while the time frame for doing so, and the likelihood of success, are unknown –– and taking into account that the relevance of the requested ESI appears to be marginal,[7] the Court finds that, even though plaintiff failed to preserve the emails, the burden to plaintiff and to the Court in significantly delaying this action outweighs the likely benefit of the requested documents. In short, and mindful of Rules 1 and 26(b)(2)(B) & (C) of the Federal Rules of Civil Procedure, the Court concludes that the open-ended delay associated with the restoration of the classified backup tapes poses a burden that outweighs the likely benefit of the requested discovery. Defendant's Motion to Compel is therefore DENIED IN PART with respect to the classified backup tapes.

*8 The parties have also provided vastly different estimates for the restoration of the non-classified tapes. As explained in more detail above, in the event that all of the tape sets would need to be restored in order to locate responsive information, plaintiff states that the task could take up to a year and cost $146,000. This estimate assumes that plaintiff would undertake the restoration process itself, as it is not aware of any third-party vendor with the needed technical capabilities. Defendant counters by presenting an estimate from a consultant employed by third party vendor RenewData who states that RenewData has the technological capability to facilitate the restoration in a timely and cost effective manner. According to RenewData, based on the information plaintiff has provided, restoring just 25% of the total tape sets (i.e., 10 sets out of the 39) would likely yield 95% of the available documents. Thus, RenewData estimates that under this scenario the total cost of the restoration would be in the $40,000 to $60,000 range, and take only 12-14 business days.

The Court has thoroughly reviewed the parties' competing claims and estimates regarding costs and time frames for the non-classified tapes. After balancing the relevant factors, as well as the amount at issue in this litigation and the significant costs plaintiff has already incurred with respect to discovery, the Court finds that defendant's estimate that restoration could cost up to $60,000 is not unreasonable, especially in light of plaintiff's failure to preserve the ESI. Thus, relying on defendant's estimate that the restoration could be completed within a matter of weeks and at a reasonable cost, the Court finds that it is not unduly burdensome for plaintiff to restore the non-classified tapes in the manner described by defendant in order to produce responsive ESI for the discovery requests at issue (i.e., the amended deposition notice with Rule 34 document requests, and sets three and six of the requests for production of documents). Accordingly, based on defendant's estimates with respect to time and cost for restoring the non-classified tapes, the Court GRANTS IN PART the Motion to Compel and orders the following:

In ordering this limited production of ESI, the Court notes that in plaintiff's initial responses to the discovery requests, plaintiff objected that the requested discovery seeks documents protected by the attorney/client privilege and attorney work product doctrine. It is well-established that an entity that withholds discovery materials based on a privilege must provide sufficient information (i.e., a privilege log) to enable the requesting party to evaluate the applicability of the privilege or other protection. Fed.R.Civ.P. 26(b)(5); see Clarke v. American Commerce Nat'l Bank, 974 F.2d 127, 129 (9th Cir. 1992). Failure to provide sufficient information may constitute a waiver of the privilege. See Eureka Financial Corp. v. Hartford Acc. & Indem. Co., 136 F.R.D. 179, 182-83 (E.D. Cal. 1991) (a “blanket objection” to each document on the ground of attorney-client privilege with no further description is clearly insufficient); Peat, Marwick, Mitchell & Co. v. West, 748 F.2d 540, 542 (10th Cir. 1984) (attorney-client privilege waived when defendant did not make a timely and sufficient showing that the documents were protected by privilege). Asserting a “blanket objection” to document requests will be found to be insufficient and improper. Davis v. Fendler, 650 F.2d 1154, 1160 (9th Cir. 1981) (blanket privilege objection is improper); see Clarke, 974 F.2d at 129 (blanket assertions of privilege are “extremely disfavored”). The attorney-client privilege applies only when “(1) legal advice is sought (2) from a professional legal advisor in his capacity as such, and (3) the communications relating to that purpose (4) are made in confidence (5) by the client.” Griffith v. Davis, 161 F.R.D. 687, 694 (C.D. Cal. 1995). Here, although plaintiff asserted the attorney-client privilege, plaintiff has not established that counsel was contacted for the purpose of providing legal advice about any of the documents to which it objected. Nor does it appear that a privilege log was produced. Thus, the purpose of the privilege –– to protect disclosures necessary to obtain informed legal advice and to encourage “full and frank disclosure by the client to his or her attorney” –– has not been shown to be implicated in this case. Clarke, 974 F.2d at 129. At this time, the Court will not sustain an objection by plaintiff on this ground as there is no showing that the privilege attaches to any of the requested documents. In the event that the privilege is later invoked as to any specific document, plaintiff must provide defendant the requisite privilege log.

*10 Nor can the Court conclude at this point that the work product doctrine protects any of the requested documents. Rule 26(b)(3) of the Federal Rules of Civil Procedure may “protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney ... concerning the litigation.” The work product doctrine “is intended to preserve a zone of privacy in which a lawyer can prepare and develop legal theories and strategy ‘with an eye toward litigation,’ free from unnecessary intrusion by his adversaries.” United States v. Adlman, 134 F.3d 1194, 1196 (2d Cir. 1998) (quoting Hickman v. Taylor, 329 U.S. 495, 511, 67 S.Ct. 385, 91 L.Ed. 451 (1947)). Furthermore, “[t]o be entitled to the protection of the work product rule, the material must have been generated in preparation for litigation. The prospect of future litigation is insufficient.” Whitman v. United States, 108 F.R.D. 5, 9 (D.N.H. 1985). Here, plaintiff has not made a showing that documents were generated in preparation of litigation; accordingly, this doctrine does not appear to shield any of the requested documents.

If plaintiff believes that any of the yielded documents are protected by the attorney/client privilege or attorney work product doctrine, it must provide a detailed privilege log.

Based on the foregoing, defendant's Motion to Compel is GRANTED IN PART AND DENIED IN PART as set forth above. No later than December 17, 2012, plaintiff shall produce all responsive emails and their attachments as ordered herein and, if applicable, produce a detailed privilege log reflecting all documents it is withholding based on the attorney/client privilege or attorney work product doctrine.

IT IS SO ORDERED.

DATED: August 29, 2012.

Under Rule 34, a party may serve on any other party a request to produce “any designated documents or electronically stored information ... stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form.” Fed.R.Civ.P. 34(a).

Rule 26(b)(2)(B) provides: “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.”

The Rule 34 deposition request sought the complete files and documents, including all communications, analyses, and work papers for each deponent relating to the adjustment, calculation, and/or valuation of plaintiff's claim. (See JS 7-8; Exhibit I-38).

For purposes of this discovery order, the Court finds the difference between the “agreed” and “disputed” custodians to be largely insignificant. In the Joint Stipulation, plaintiff makes clear that the only discovery it resists producing with respect to both the “agreed” and “disputed” custodians is the restoration of the backup tapes to obtain the custodians' emails. Specifically, plaintiff states that it “has agreed to produce everything that [defendant] seeks in its Motion –– except emails that require restoration of backup tapes.” (JS 60-61). As shown herein, the Court's weighing of factors to determine whether plaintiff has shown undue burden does not depend on whether the ESI is directed at “agreed” versus “disputed” custodians.

In mid-2007, plaintiff's Microsoft Exchange users' accounts were migrated to a different set of servers. Essentially, the tapes corresponding to dates prior to the 2007 migration contain classified information, while the tapes after the 2007 migration contain non-classified information. (See JS 37, 39, 45).

Rivera also states that “security concerns would prevent [plaintiff] from using an outside vendor.” (Rivera Decl. ¶ 15.4). However, because Rivera sets forth no additional information regarding the type and extent of “security concerns” implicated by the restoration of the non-classified tapes, the Court finds that this brief assertion of security issues with respect to the non-classified tapes is insufficient and unsubstantiated.

The Court further notes that it appears defendant did not make its discovery request for ESI concerning the disputed custodians until it served the amended deposition notice in April 2012. In other words, defendant –– after conducting years of discovery in this matter –– imposed a highly burdensome request for ESI that would require plaintiff to perform time-consuming searches of numerous custodial electronic files in the final stages before the discovery cut-off.

The Court notes that plaintiff has been utilizing vendor Kroll Ontrack in connection with this litigation. However, without having the physical tapes in its possession for evaluation, Kroll was unable to “specifically attest to [its] ability to process” the data stored on the tapes. (JS, Exhibit E, Declaration of Daniel Larson ¶ 9).

Given the time frame involved and the limited relevance of the emails, the Court finds a maximum of 5000 emails to be reasonable, and an appropriate number for plaintiff to review for privilege. An attachment to an email shall not be counted as a separate document but shall be considered as part of the email.

The Court notes that plaintiff has represented that it “has produced and is producing, from all identified reasonably accessible alternative sources, all of the emails to/from all custodians at issue,” and that “[a]s of August 17, 2012, [it] has produced 179,225 emails and attachments to [defendant] and will produce additional emails within the next two weeks.” (Plaintiff's Supplemental Brief at 5). The Court's Order does not relieve plaintiff of its representation, as the instant Order is not a substitute for this ongoing document production.