Supreme Court Has Opportunity to Define State Powers Over Immigration Issues

Daily Journal

Much like politics, litigation sometimes makes strange bedfellows. This term, the Supreme Court is scheduled to hear oral argument in Chamber of Commerce v. Whiting. The principal question presented is whether federal immigration law pre-empts an Arizona law, the Legal Arizona Workers Act, which sanctions Arizona employers with loss of "business licenses" for "knowingly" or "intentionally" employing "an unauthorized alien." In signing the law into effect in 2007, then Arizona governor, now Department of Homeland Security Secretary, Janet Napolitano stated: "Because of Congress's failure to act, states like Arizona have no choice but to take strong action to discourage the further flow of illegal immigration through our borders." The Arizona law immediately prompted a series of suits by a diverse array of plaintiffs now aligned before the Supreme Court. These include the Chamber of Commerce, employer groups, and Hispanic community groups.

In 2007, Arizona adopted, effective Jan. 1, 2008, the Legal Arizona Workers Act. The Act permits Arizona Superior Courts to revoke "business licenses" of employers who knowingly and intentionally hire unauthorized aliens. Under the Act, any person may submit a complaint to the Arizona attorney general or a county attorney. After determining a complaint is not false or frivolous, the appropriate county attorney is charged with filing an action against the employer in Superior Court. The Act uses IRCA's (Immigration Reform and Control Act of 1968) definition of "unauthorized alien" and requires that the court use (but only as a rebuttable presumption) the federal government's determination of the employee's lawful status. The Act also makes it mandatory that an employer use E-Verify. E-Verify is a voluntary federal pilot program that confirms an employee's work-authorization status. As to sanctions, the Act provides for a graduated series of penalties that ultimately can lead to the permanent revocation of any applicable licenses (not including professional licenses) necessary for the employer to do business in the state.

Both the district court and the 9th U.S. Circuit Court of Appeals upheld the Act against claims of express and implied pre-emption. Undeterred, the Supreme Court petitioners obtained certiorari and argue before the Court as follows:

First, IRCA expressly pre-empts the Act. As to the exception in the express pre-emption provision of IRCA allowing sanctions as to state licenses, the petitioners argue that the "licenses" to which IRCA refers limitedly involves only state "fitness to do business laws" such as farm labor contractor laws that allow states to condition permits and licenses on an applicant's record of compliance with federal immigration law.

According to petitioners, unless the exception to express pre-emption is limited, the exception would entirely negate the pre-emption provision. In other words, a state could evade IRCA's pre-emption provision through a broad definition of license that could disguise any sanction as a "licensing fee" to be levied on any employer found to have hired unauthorized workers, or impute an employment license to every employer, then suspend that "license" for knowingly or intentionally hiring an unauthorized alien (South Carolina has adopted such a provision).

Petitioners also assert that IRCA's history and structure demonstrate that the exception clause is limited to "fitness to business laws" and not the broad range of state laws covered by the Act, which includes, within the definition of license, articles of incorporation, certificates of partnership and foreign corporation registrations. According to petitioners, the Act "departs wildly from any traditional understanding of 'licensing' law, and undertakes precisely the regulation of employment authorization that Congress meant to pre-empt. The Act does not speak to a company's fitness to engage in any particular type of business, and it establishes no conditions for issuing a 'license' or registration of any sort."

Lastly as to express pre-emption, the substance of the Act is outside the exception clause to the extent that the Act permits a sanction without a determination by the federal government of a violation of IRCA. In other words, under IRCA, a state can impose a licensing sanction under the IRCA pre-emption exception only after a federal adjudicatory determination of a violation of IRCA. Insofar as the Act permits a state Superior Court to undertake that determination, the Act conflicts with IRCA.

Alternative to express pre-emption, the petitioners argue that IRCA impliedly pre-empts the Act. First, as with their express pre-emption argument, petitioners assert that IRCA "contemplates a predicate federal adjudication by expert federal officials" and "creates a detailed [federal] process for investigating and adjudicating issues related to work-authorization status." According to petitioners, "[t]here is no room for alternative [state] investigatory and adjudicatory systems." Moreover, the Act authorizes state officials to disregard federal findings concerning federal work-authorization status. In this regard, under the Act, federal findings constitute only a "rebuttable presumption of the employee's lawful status." Additionally, the Act calls for the use of I-9 forms in ways that Congress proscribed, e.g., requiring sharing of information with local law enforcement agencies.

Petitioners further argue implied pre-emption because the Act disrupts the balance that Congress struck among various policy objectives. While one of the objectives of IRCA is to deter unlawful immigration, that was not the only congressional objective. Another objective was to minimize burdens on employers by allowing them to rely upon facially reasonable documents as proof of employment authorization status. Congress also sought to protect the privacy of employees by allowing alternative forms of documentation of status. Most significantly, according to petitioners, Congress was "deeply concerned that too heavy a thumb on the side of enforcement would cause employers to discriminate against prospective employees on the basis of actual or perceived national origin." Congress addressed this potential imbalance in IRCA by proscribing employers from asking for additional proof of identity or employment authorization and expressly prohibiting discrimination based on national origin or citizenship status. Petitioners argue that the Act only is focused on deterrence of unlawful immigration to the exclusion of the other concerns which Congress had and thus conflicts with IRCA.

Concerning mandated use of E-Verify, petitioners argue that the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) impliedly pre-empts that mandated use. Congress intended E-Verify to be a voluntary pilot program in which employers could choose to participate. By making the program voluntary, Congress could avoid imposing serious burdens on employers and the federal government while it tested whether the new program effectively served Congress's multiple goals including, "assist[ing] employers in complying with the laws" against hiring unauthorized aliens, "prevent[ing] discrimination and privacy violations," and "minimiz[ing] the burden on business." Accordingly, it "is not for Arizona, or any other State to disregard Congress's judgment."

As with many cases involving statutory construction and express or implied pre-emption, this case could easily go either way. Certainly, the district court and the 9th Circuit disagreed with the petitioners. This may be one of the relatively few occasions where a decision from the 9th Circuit receives a hospitable welcome in the Supreme Court. However, petitioners are not without compelling arguments. One can reasonably argue, as did the United States as amicus curiae in support of granting certiorari, that the Act is not a licensing statute at all but instead "a statute that prohibits the hiring of unauthorized aliens and uses suspension and revocation of all state-issued licenses as its ultimate sanction." Additionally, to uphold the Act would be effectively nullifying the express pre-emption of IRCA. Such a result also would seem to undermine the balance Congress struck in IRCA, which is, as petitioners point out, not just the deterrence of unlawful immigration. Regarding the Act's requirement that employers use E-Verify, it would seem that such a requirement does conflict with IIRIRA. The United States as amicus stated, "Absent congressional authorization nowhere present in this statute, a State may not restructure in this fundamental way the regulatory relationships and functions of a federal agency."

How the Supreme Court decides this case will certainly provide a clue as to how the Court might address Arizona's other controversial immigration statute, the 2010 Support Our Law Enforcement and Safe Neighborhoods Act, should judicial resolution of that act move beyond its current pendency in the 9th Circuit.

Steve P. Wiman is a partner at Nossaman in Los Angeles and former chair of the Firm's Litigation Department. He can be reached at (213) 612-7818 or


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