Elkins Constructors, Inc. (“Elkins”) had a contract with University of South Alabama (“USA”) to build a student dormitory. Continental Casualty (“Continental”) issued the payment bond for Elkins on this project. Coltin Electric (“Coltin”) was an electrical subcontractor on the project. Coltin filed this action in August 2, 2012 against Continental for payment under Elkins' bond. Coltin alleges that Elkins failed to pay for work that Coltin performed under the subcontract. In an Order dated July 16, 2013 (Doc. 66), the Court determined that Coltin was bonded by Ullico Casualty Company on the USA project, that Coltin had assigned its rights against Elkins to Ullico, and that because Ullico had gone into receivership, the Insurance Commissioner of the State of Delaware is the proper Plaintiff in this action. Thus, the Insurance Commissioner was substituted as Plaintiff. (Id.).

Before the Insurance Commissioner was substituted as Plaintiff, Continental filed an answer and counterclaim against Coltin. Also, Continental, on January 18, 2013, served production requests on Coltin, and on June 28, 2013, Continental filed its initial motion to compel. (Doc. 58). According to Continental, in response to the original motion to compel, Coltin produced three boxes of documents and a DVD containing electronically stored information (“ESI”)[1]. (Doc. 71 at 2). Upon review of the documents, counsel for Continental noticed that no emails had been produced, and requested production of the emails. (Id.). During a status conference conducted on July 18, 2013, counsel for Coltin represented that the emails had been withheld because the Insurance Commissioner was seeking to be substituted as the proper party Plaintiff, and that Coltin was concerned about taking any action that could be viewed as somehow compromising the Commissioner's position. Coltin's counsel further represented that since the issue had now been resolved, with the Insurance Commissioner being substituted as Plaintiff, Coltin would be producing the requested emails. In light of said representation, the motion to compel was deemed moot, and it was agreed that Coltin would produce the requested emails within the next few weeks although all other case activity was stayed for sixty days to afford the Insurance Commissioner sufficient time to determine whether to pursue Coltin's claims against Continental. (Doc. 68).

*2 More than a month later, on August 23, 2013, Continental filed the pending renewed motion to compel. (Doc. 71). In the motion, Continental advises that notwithstanding the representations by Coltin's counsel at the July 18th discovery conference, the requested emails were not produced as promised. (Id.). The Court entered an order directing Coltin to file a response to the motion by September 17, 2013. (Doc. 72). In its response to the Court's order, Coltin advised that the production of electronically stored data (“ESI”) was not addressed in the parties' Rule 26 meeting, that on or about July 11, 2013, Coltin produced the bulk of the documents except for an email file in its native format, and that Coltin mailed a disk containing the sought-after e-mails on September 17, 2013 after counsel for the parties conferred and reached an agreement regarding ESI. Coltin thus argued that Continental's motion to compel was moot.

A second discovery conference was conducted on November 1, 2013[2]. At the conference, counsel for Continental argued that its discovery motion is not moot because Coltin has still not produced any emails dated before July 19, 2010, and that the missing emails are important because Coltin performed a cost estimate for its USA subcontract proposal prior to July 19, 2010, that the estimating process for the Coltin proposal would have occurred between June 15 and July 10, 2010, and that the reasonableness of Coltin's original cost estimate is a major issue in the case because of the particular “total cost” method Plaintiff is using to prove its damages. (Doc. 85). Continental also argued that not only should Coltin be compelled to produce the missing emails, but that it should also be forced to reimburse Continental for the attorney fees and costs that it. has incurred in connection with the motions to compel. Subsequent thereto, Continental filed a motion for attorney's fees and requested that the Court issue an order requiring Coltin to reimburse Continental for its attorney's fees and costs incurred in connection with the motions to compel. (Doc. 85).

At the November 1st conference, counsel for Coltin noted that the discovery requests were served upon it before the Insurance Commissioner was determined to be the proper Plaintiff in this case, and since that time, Coltin has not been served with any new discovery requests in its current role as a third party Defendant. Coltin further argued that its computers were changed out in July 2010, and that while Coltin still has the hard drives from the old computers, it will be expensive to have a forensic search conducted in an attempt to retrieve the requested emails. Following the hearing, Coltin submitted a supplemental response that indicates that the cost for cloning five (5) workstation hard drives, and conducting a forensic search of the hard drives will total $13,267.70. (Doc. 87-1). Coltin argues that it should not have to bear this expense, and that the party requesting the emails, Continental, should, instead, bear the expense. (Doc. 87). Coltin also filed a response to Continental's motion for attorney fees and costs, and the affidavit of Alan Rodgers, CEO of Coltin. (Docs. 88, 88-2). In the declaration, Rodgers asserts that Coltin began to utilize a new computer system in July 2010, and that prior to the switch, Coltin's emails were stored on the individual computers of Coltin's employees. He further asserts that efforts were made to back-up the e-mails from the old system; however, he is not sure if those efforts were successful. According to Rodgers, the old computer hard drives are currently in storage and a forensic search must be conducted to determine if the emails still exist. He further contends that such a search would be an undue financial burden for Coltin and that if the Court requires a forensic search, Continental should be required to cover the costs for the forensic search. (Id.).

*3 Rule 26(b) (1) defines the general scope of discovery in civil litigation. Under Rule 26(b)(1), parties may obtain discovery regarding any nonprivileged matter that is relevant to any other party's claim or defense. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. Thus, a party is required to produce electronically stored information unless the party shows that the source of the information is “not reasonably accessible because of undue burden of cost.” Fed. R. Civ. P 26(b)(2)(B). Once it is shown that a source of ESI is not reasonably accessible, the requesting party may still obtain discovery by showing good cause, considering the limitations of Rule 26(b)(2)(C) which balance the costs and potential benefits of discovery. “The decision whether to require a responding party to search for and produce information that is not reasonably accessible depends not only on the burdens and costs of doing so, but also on whether those burdens and costs can be justified in the circumstances of the case.” Fed. R. Civ. P. 26, Advisory Committee Note to the 2006 amendments to Rule 26(b)(2)[3].

Based upon the record before the Court, the undersigned finds, as an initial matter, that Continental is entitled to recover the attorney fees it has incurred in connection with the filing of its renewed motion to compel. The record clearly reflects that although discovery activity in this case came to a halt while the Court resolved the issue of the proper Plaintiff in this action, at the discovery conference conducted on July 18, 2013, Coltin's counsel acknowledged receipt of Continental's production requests, agreed that Continental was entitled to the requested emails, and agreed that the requested emails would be produced in the next week or two. (Doc. 68). As a result, the motion to compel was denied as moot. Notwithstanding the representations by Coltin's counsel, Coltin reneged on its commitment to produce the emails, and did not produce any emails until afterColtin renewed its motion to compel. Given these events, it is disengeous for Coltin to suggest that the delay in producing the emails somehow resulted from the fact that the discovery requests were not re-served upon it once the Insurance Commissioner was determined to be the proper plaintiff, or that a new protective order was necessary before the emails could be produced.

Rule 37 of the Federal Rules of Civil Procedure empower courts to compel disclosure and enter sanctions against individuals who fail to make disclosures or participate in discovery[4]. The undersigned finds that Coltin's failure to tender the emails dated after July 19, 2010 until after Continental renewed its motion to compel was not justified and thus mandates the entry of sanctions. Accordingly, the undersigned finds that Coltin is entitled to recover the attorney fees incurred in filing its renewed motion to compel and its motion for attorney's fees and costs, and in attending the hearing conducted on November 1, 2013. Based on the records submitted, Continental is entitled to $940.00 in attorney's fees. This amount represents 4.7 hours for attorney time devoted to the renewed motion to compel, motion for attorney's fees and attendance at the November 1st court conference, at an hourly rate of $200.00. Coltin is hereby ordered to tender payment to Continental in the amount of $940.00 by January 31, 2014[5].

*4 As noted supra, Continental also seeks an order compelling Coltin to produce emails from the June 15 and July 10, 2010 time frame. In opposing Continental's request, Coltin does not dispute Continental's contention that the emails are necessary because they contain information about how Coltin formulated its proposal for the USA project and bears on how damages should be calculated in this case. Nor does Coltin contend that the requested information is available from other sources. Instead, Coltin argues that because it is likely to cost in excess of $13,000 to retrieve the information from computer hard drives that are no longer in use, Continental should be forced the pay the cost for the forensic search.

Based upon the record before the Court, the undersigned finds that Coltin has not met its burden of establishing that the information sought by Continental is not reasonably accessible. While Coltin has presented a proposal for a forensic hard drive search, the record does not contain any sworn testimony regarding any steps taken by Coltin to obtain the requested emails other than a declaration from the president of the company that the computers were changed out, that efforts were made to back up the emails from the old computer hard-drives, and that he is not sure if the efforts were successful. At this juncture, it is simply not clear to the Court that the hard drives are not reasonably accessible, or that the cost associated with obtaining the emails outweigh the importance and usefulness of the emails. Accordingly, the undersigned orders Coltin to make arrangements for a forensic search, to be completed by January 31, 2014, for emails sent or received during the June 15 and July 10, 2010 timeframe and contained on Alan Rodgers' old computer hard drive. This search should yield representative information regarding the accessibility of the requested emails, the probability of locating the emails, the usefulness of the emails, and the actual cost likely to be incurred for a search of all of the old computer hard drives at issue.

Coltin's cost-shifting request is denied at this time. “[C]ost-shifting should be considered only when electronic discovery imposes and ‘undue burden or expense’ on the responding party.” Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 318 (S.D.N.Y. 2003). The burden or expense of discovery is, in turn, ‘undue’ when it outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues. See Fed. R. Civ. P. 26(b)(2)(C). Under the circumstances of this case, and having considered all the relevant factors, the undersigned finds that Coltin has not made the requisite showing. Thus, the request for cost-sharing is denied.

DONE this 8th day of January, 2014.

In its response to Continental's original motion to compel, Coltin advised that because the parties' original Rule 26 (f) report did not address ESI, the parties need to confer and agree to a proposed protective order for ESI before the ESI was produced. (Doc. 62)

The discovery conference was originally scheduled for September; however, at the parties' request, the conference was rescheduled to afford counsel for the parties an opportunity to confer regarding the emails. (Docs. 81, 83)

According to the Advisory Committee's Notes to the 2006 amendments to Rule 26(b)(2),

The rule provides, in pertinent part, that:

The undersigned declines to award the requested hourly rate of $375 because this rate is not supported by the prevailing legal rates in the local market and because the record does not contain any information regarding Mr. Staak's legal experience. However, the undersigned has taken judicial notice of the fact that the Alabama State Bar lists 2005 as Mr. Staak's admission date. Additionally, the undersigned declines to award travel costs.