we will next to hear more hours the herrera number seventeen gas to one eight six counsel you may  appellee this case involved underlying criminal prosecution for fraud and devilment on a professional services contract entered into between my client mr allen and the city of hama part of mexico  on appeal the appellant search two primary arguments the first argument is that the district court made a legal error as what the standard of review was in terms  of applying arguable problem haunts in the circumstances of the argument being made by telling more specifically that the underlying officer in this case falsified information in the arrest affidavit to secure the arrest warrant and arrest for fraud the district court only decided to the fraud issue up because that was dispositive the district court did not rule on the investment issue the alternative argument appellate makes is that even assuming the district court's legal framework was correct that the district court in properly applied that framework to find that a hypothetical reasonable officer could support an allegation for criminal fraud in the context of this case and in looking first at the the legal question that appellant put most of the emphasis on in looking at the briefs and the district court's opinion kind of preparing for this there's one point that i would a where it really became clear that the district court was going to stray and that's found on the bottom of page ten i'm a top page eleven of the opinion which is hendricks three thirty going over to appendix three thirty one removing those and then determining probable cause at that point pursuant to taylor so the court cited the taylor standard starting on the bottom of page ten talking about the fourth minute violation to knowing there recklessly o puts in brackets arguable probable cause for the warrant and at that point the district court has actually changed what this court stated in taylor this court stated in taylor that the question becomes once the  false information is removed you assess what a probable cause occurs adding arguable probable cause as a material change to that standard because when qualified immunity is assessed it's a two part  is there anywhere in the record we can find a version of the affidavit that was modified for purposes taylor no i don't believe so your honor i don't believe the court prepared an affidavit that took out that information i then just realizing or cross out those paragraphs that the court said was going to delete right it's paragraph four five eighteen twenty eight twenty nine thirty was what the district court cited and again that's appendix three thirty one so so if we plaintiff and the build amounts would lead a reasonable officer to believe that there was probable cause to arrest plaintiff for fraud didn't leave billing the city as an explicit conclusion and finding by the court now admittedly the court used arguable now the times but duos really become important when we have an explicit finding that the court said that there hasn't modified there was a reasonable officer would have concluded there was probable cause to the next you're in the problem with earlier misstatements no i don't believe so your honor and part of that has to do with the citations that were stated directly after that statement on page thirteen cause exists so i believe that i don't believe the court can really say that the district court at that point was making firm a determination of probable cause based on citation the district courts don't that point was in the r eliminates probable cause at that point a clearly established right has been violated so i think that reprehensible isn't isn't the arguable probable cause phrase used in the context of the second step in qualified immunity analysis that is the clearly established law and why couldn't the district court's decision here  officer so in that case the court would have to find that it was not a clearly established right but that the officer still acted reasonably such that there was arguable probable cause even though there really wasn't probable cause violation of a clearly established right has occurred in other words there is no room at that point to decide whether arguable probable cause concede the defendants because you know clearly established right didn't exist because it's been clearly established for decades under the case love this circuit that providing false information after they did disport probable cause or otherwise doesn't exist  point there's no probable cause to arrest and there's very little in the arrest affidavit that relates to the fraud claim itself there surely about three or four paragraphs most of it relates to the embezzlement if you take out the paragraphs where officer herrera in this case is saying she didn't provide the information so i believe there was fraud because she built for work she didn't do if you take those out because in fact she had provided that tossed her a then at that point  clearly established right isn't buying it so article probable cause can never save an officer at that point because at that point it's a violation clearly once once the paragraphs are removed as for taylor  don't we still have in the remaining material the disparity between the expenses and the billing and don't we still have the use of funds to pay for personal items and don't we still have the absence of the three point five multiplier in the record as far as the city and the investigators are concerned why isn't that all still there well to the extent that still there because much that relates to the investment portion of it but to the extent that still there mr burrell has never made an affirmative representation and she was going to build a different way as the district court noted on page twelve of its opinion there's no mention of a fee no mention of a prophet no mention of the mark but there's also no mention of a three point five multiple one way or the other like let let's i'd like to hear your answer to that yet where's the evidence that the city was made aware that she or is it not and it's not in the car right those two hands is there any evidence that she presented that method of killing to the city before she built the evidence that she stated was that that was included in her budget it's not explicit that she made a representation that i was going to bill for a multiplier or not and the reason why the point that it's not there either way is one of the concerns that appellant has is that the district court conflated in the idea that well maybe a reasonable officer to think she reached a contract but that's different from criminal fraud criminal problem choir's material misrepresentation it requires her to say i was the bill by this method and then she turns around and built by different method i'm going to charge my client two hundred dollars an hour and i charge my client four hundred dollars an hour and one of the concerns about where the court came down on training that well really just the discrepancy of the billing and maybe a reasonable so in that respect the district court by going into this realm of arguable probable cause that really has no place with respect to a post by the affidavit allegation is starting to argue another case that doesn't exist on if i understand that if the arrest warrant was based on the officers alleging that they had probable cause for both fraud and in thousand why are we writing out of the picture at that point well the only reason is because that's the way the district court framed it in terms of whether this court would want to address the investment going on you want to address the personal expenses using the business to pay your personal expenses well sure i mean reserve by fifteen seconds thank you with the reply brief and with the argument this morning i think i have a much better understanding of the argument be being presented by powers and i think it really comes down to this did author atta knowingly or recklessly cause you're talking about in a qualified immunity setting therefore it is a constitutional violation section of the analysis because you're talking about whether there was probable cause as you would in hearing now the term arguable is thrown in there and that of course is raising question because there is case law and not only in this circuit but i think throughout the nation that uses it as part of a probable cause analysis however that is not always the case it is also used the term arguable it is used as a win placement if you will for reasonable officer which of course is what probable cause looks to is does not require that an officer make a decision that is one hundred percent accurate instead they are required to make the best decision they can with the information they have this court  fact said before that the relevant question would probable cause whether a substantial probability existed that the suspect committed the crime requiring something more than a bare suspicion well that is what judge army hope did it once she performed the franks analysis so she took away the evidence that was again challenged and she looked at only three pieces of evidence for the claim of fraud she looked at the contract and arguably the r f p although she acknowledges it was it was not true before she looked at the invoices and she looked at a spreadsheet that was private provided to her by the appellants the spreadsheet of course referenced in multipliers three tell based on the expense of certain expenses are multiplied and others are not like taxes were not more like they were not given that multiplier so you have that expense sheet totaling two hundred three thousand but then you have invoices total approximately four hundred i think it was fifty thousand in that general range so i will agree with you your honor the if you just look at the straight expenses multiplied by three point five you do not come up with what they were so i would agree with you just ask about the i guess it's the spreadsheet that lists the expenses just from the one that was included with the affidavit are attached to the affidavit has to totally mention the two hundred twenty three thousand one hundred seventy and it doesn't have it doesn't have a role for the multiplier but then later on it left me wondering what what the officers knew about the multiplier at the time that they prepared the affidavit and submitted it for approval or for the arrest warrant i believe i correct in this statement i believe officer atta was informed of the multiplier goings met with miss morales and that would have been i believe it was april of twenty twelve and i could check on the very quickly for you when you look yes that is correct well if that's if that's the case and why wouldn't that explain the discrepancy between what was bil and what was listed as expenses like what why does that raise a red flag of fraud if if if they're getting this explanation and later on we understand it was presented as an industry standard where's the probable cause the probable cause that that multiplier was not found anywhere within the contract or the r f p it certainly wasn't presented as something that the city had agreed to well no i understand but that was it explained to the officers before they applied for the arrest warrant my understanding is they were informed that three point five multiplier was according to ms more on the industry standard and that that is what she had done i'm aware of no evidence before this court or otherwise that suggests that that three point five multiplier was made known industry standard is to charge small plier and that explains the discrepancy between the expenses and the billing why at that point do they seek the arrest warrant it seems like if they've got this explanation is that it is that really enough i think it is of course the explanation there is an issue when there is a credibility issue i guess if you and i think it's not a stretch to say it was seen as an excuse after the fact to explain the discrepancy between what was built in the city and the true expenses for the services that were provide this is there anything on that expense list that actually pays her and her staff i guess there's a payroll there is passed but what about what about her and she isn't doing this for free  on by the city is there any evidence there that would help reveal why this progressed to a criminal manner officer atta throughout the investigation consulted not only with his sergeant phillipe on solace but he also consulted with the district attorney's office and at that time in fact not only did the district attorney's office sign off on the warrant for arrest before the district judge signed off but they were also involved throughout the investigation i will agree with your honor it was part of a larger investigation at the time that ms morales was indicted there were other contractors of who are arrested and in fact there were city officials many city officials were arrested two in fact who eventually pled not to fraud or a dozen men too but two other other crimes so why he i guess i'm struggling to to to answer your question more directly because the information before us and judge or me close analysis try to just break down the evidence to its most basic form again a linear linear analysis is what you try to do we submit of course she did not have to do it is of course let me start by saying what has been established i think by appellants is that they're claiming that clearly established law is found in only one area and i think that's incredibly important it goes to a question your honor just matheson asked a few minutes ago so going back to the army whole analysis when she broke down the three areas of of evidence under franks or under taylor there is no argument that there is clearly established law to suggest that in to determine what type of contract we were dealing with if in fact certain expenses were provided for if in fact ms morales wasn't paid through another mechanism that case has not been presented to the court and i w submit we have looked and i have found nothing even slightly on point so i didn't so didn't district court rely on step one qualified immunity analysis for its decision we really don't have the benefit on prong one it's another option here honestly think there are several options for the quarrel is it an option though i mean has that been fully grasped by the parties for us or are we in a  position to look at that option your honor you asked the question earlier saul wanted to make sure we did establish our argument with regard well that yeah well now i'm asking if it's really an option i think it would be for the court and i think it would be al argument has not been made that actually has not been made and that goes to my point again that judge armey hopes of a very conservative approach in doing this although she did not have to so the issue of deliverables the issue of the testimony from the former city attorney i think were certainly relevant and could have been considered and perhaps should have been considered and i think that is before the court conservative you're saying that by using the word reasonable she jumped into the qualified immunity analysis and kind of bypassed the first step but whether it was or wasn't illegal she gave appellants almost the benefit of the doubt without having to decide whether in fact there was a showing of really going to be correct so so what you're saying is that that we ought to look at her ruling as a qualified immunity ruling which of course she thought she was doing and it but she simply missed the first step but you would say she didn't miss it she basically just assumed that the plaintiff she gave the benefit of the doubt the plaintiff on that and then moved to the second step of whether it was immunity i would said a little bit different she found that there wasn't a constitutional violation because in fact there was probable cause even if statements were wrongfully omitted from the  and again determined that there was probable cause obviously that is a constitutional violation part of the qualified immunity analysis so what she did not do at any time was go through a discussion and certainly not a finding that there were all missions wrong full of missions intentional or what already she found she found probable cause on the basis of the discrepancy between expenses and billing is that so between the discrepancy yes your honor with one extension of that and the lack of a disclosure of the multiplier and i take it you agree with lutes that the personal expenditures are not really part of the case at this point i do agree the judge or me who basically determined that because it was probable cause for an a for fraud the person was arrested and therefore an analysis as well as to whether there was probable cause for an arrest of an doesn't was unnecessary because the arrest already had occurred probably or in other words because not only because of the best chapter corporation but that just because you could be in any kind of a corporation or an individual that once the billing is made in paid then there should be no restrictions on the person receiving the money as to how they are going to use the money that they have obtained if it was built whether the district court had just ruled on or prong number one and i think i heard mr selfridge just say that was his belief what the court did if so then the court improperly brought the concept of arguable probable cause which really relates to prong two and applied it in a doctrinally incorrect way as to prong one going back to a comment that was made during you know my opening there was a question about the reference on page thirteen that just said probable cause is supposed arguable probable cause if the court looks at the district court's next paragraph of page fourteen of twenty appendix three thirty four the court says having found that there was arguable probable cause to arrest plaintiff for fraud it is unnecessary to examine will take our morning bright and be back in about ten minutes