Unreported / Non-Citable
Background
Firdos S. Sheikh sought clarification or reconsideration of part of the Eastern District of California’s prior order denying her motion for partial summary judgment. The earlier order had concluded that omission of the incident-to rule was immaterial to probable cause because it was undisputed that Sheikh’s employee, Mona Lata, lacked a physical-therapy license and the rule therefore did not apply. Sheikh challenged only that finding. The motion was fully briefed and submitted without oral argument under Local Rule 230(g).
The court explained that district courts have inherent power to reconsider, rescind, or modify an order for sufficient cause, and that Federal Rule of Civil Procedure 54(b) permits revision of interlocutory orders. Reconsideration generally is appropriate when controlling law changes, new evidence becomes available, or correction of clear error or prevention of manifest injustice is necessary. With further briefing, the court recognized that it had erred by deciding whether the incident-to rule applied as a matter of law instead of asking whether information about Sheikh’s belief in its applicability was material to probable cause.
The Court’s Holding
The court granted Sheikh’s motion for clarification or reconsideration. It held that information concerning the incident-to rule was relevant and material to the probable-cause determination. A judicial-deception claim requires a substantial showing of a deliberate or reckless omission that was material to probable cause. Because the arrest affidavit accused Sheikh of healthcare billing fraud, which requires fraudulent intent, evidence of mistake could negate that intent. The court identified a full description of the rule and the defendant’s interview with Sheikh’s biller, Doreen Rogers, who shared Sheikh’s understanding, as material evidence bearing on whether the billing practices reflected fraud or innocent error.
The court nevertheless declined to hold that including the omitted information would have defeated probable cause as a matter of law. Materiality requires proof that probable cause would have been absent with false information redacted or omitted information included. Given additional evidence in the arrest affidavit on which a magistrate judge could conceivably find probable cause, Sheikh was not entitled to judgment as a matter of law. The jury must assess both whether Defendant Katie Phelan deliberately made the omissions and whether the revised affidavit, considered as a whole, negates probable cause. The order permits Sheikh to introduce evidence at trial concerning her understanding of the incident-to rule and vacates the November 5, 2026 hearing.
Key Takeaways
- The court corrected its earlier analysis by focusing on the materiality of Sheikh’s belief about the incident-to rule rather than deciding whether the rule legally applied.
- Evidence bearing on mistake was material because the affidavit alleged healthcare billing fraud, an offense requiring fraudulent intent.
- The court did not award Sheikh judgment as a matter of law or decide that the corrected affidavit necessarily lacked probable cause.
- The jury remains responsible for deciding whether the omissions were deliberate and whether they were material to the ultimate probable-cause determination.
- Sheikh may present evidence at trial about her understanding of the incident-to rule, and the scheduled motion hearing was vacated.
Why It Matters
The order narrows the effect of reconsideration: it changes the court’s materiality analysis and permits specified trial evidence, but preserves the central judicial-deception issues for jury resolution. It distinguishes the relevance of omitted information from the separate question whether inclusion of that information would have defeated probable cause as a matter of law.
The ruling also makes clear that the court did not resolve whether Phelan acted deliberately or whether the affidavit’s remaining evidence independently supported probable cause. Those questions remain open for trial under the court’s stated framework.