S.Ct.: Arizona Law Sanctioning Hiring Undocumented Individuals Not Preempted

The Supreme Court, in an opinion written by Chief Justice Roberts, rejected claims of preemption leveled against an Arizona statute targeting businesses who employ undocumented individuals.

The Arizona law revoked business licenses for violations of the Immigration Reform and Control Act (IRCA) of 1986 and mandated that employers use the federal government’s E-Verify system to verify work authorization status. The Court held that the text of the federal law did not expressly preempt the Arizona law and that the state law was not impliedly preempted by the objectives of federal law.  Justice Breyer filed a dissent, joined by Justice Ginsburg. Justice Sotomayor filed a separate dissent. Justice Kagan did not take part. Chamber of Commerce v. Whiting, No. 09-115, 2011 WL 2039365 (May 26, 2011).

IRCA “preempt[s] any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.” 8 U.S.C. 1324a(h)(2). Relying on the parenthetical savings clause, several states have enacted laws that impose sanctions involving “licensing and similar laws” for employing unauthorized aliens. In the instant case, brought by the U.S. Chamber of Commerce and other groups (“Chamber”), the Court considered whether the provisions of the Legal Arizona Workers Act of 2007 fall under this savings clause. Under the state statute, (1) Arizona courts can suspend or revoke an employer’s license(s) needed to do business in the state for knowingly or intentionally employing unauthorized aliens, and (2) employers are required to use E-Verify, internet-based system operated by the federal government that allows them to verify that an employee is authorized to work.

First, the Court held that the Arizona law’s licensing sanctions were not expressed preempted, because they fell within the scope of the savings clause.  The Court rejected as “contrary to common sense” the argument of the Chamber and United States as an amicus that a law which only imposes a penalty of license suspension is not a licensing law. The Court noted that the definition of “licensing” in the federal Administrative Procedure Act includes “revocation.”  The Court stated: “There is no basis in law, fact, or logic for deeming a law that grants licenses a licensing law, but a law that suspends or revokes those very licenses something else altogether.”

The Chamber appealed to the legislative history of IRCA, arguing that the ways in which it amended the Migrant and Seasonal Agricultural Worker Protection Act (AWPA) of 1983 imply a narrower definition of “licenses.” However, the Court rejected this argument, observing that none of the limitations that the Chamber asserted appear in the text of IRCA.  The Court quoted its prior precedent for the principle that “Congress’s “‘authoritative statement is the statutory text, not the legislative history.’”

Second, the Court held that the Arizona law is not impliedly preempted by the IRCA because it “closely tracks IRCA’s provisions.” IRCA adopts the “federal definition” of “unauthorized alien.” Also, the Arizona law operates based on the federal government’s determination of work authorization status. Though state investigators can technically verify with the federal government only an employee’s immigrationstatus, the Court reasoned that the state’s burden of proof would prevent it from imposing sanctions on employers in ambiguous cases. Next, the Arizona statute, like IRCA, allows “good-faith compliance with the I-9 process” as an affirmative defense.  While the provisions of IRCA would prohibit the use of the I-9 document in Arizona courts, the Court accepted the respondents’ argument that employers would be able to establish good-faith compliance with the I-9 process through other means.

Third, the Court rejected the Chamber’s argument that the Arizona law upsets the balance of policy considerations embedded in IRCA. Distinguishing the various cases that the Chamber referenced (Buckman, Garamendi, Crosby, Locke, and Bonito Boats), it reasoned that “regulating in-state businesses through licensing laws has never been considered such an area of dominant federal concern” and that the Arizona law does not “directly interfere[] with the operation of [a] federal program.” It also discounted the possibility that employers would tend to discriminate rather than risk sanctions from the state statute, noting that the penalties apply only to knowing and intentional violations and that “[e]mployers enjoy safe harbors from liability when they use the I-9 system and E-Verify—as Arizona law requires them to do.”

While the Court did not mention the presumption against preemption, it included language very similar to such an approach.  The Court stated: “Implied preemption analysis does not justify a ‘freewheeling judicial inquiry into whether a state statute is in tension with federal objectives’; such an endeavor ‘would undercut the principle that it is Congress rather than the courts that preempts state law.’ Our precedents ‘establish that a high threshold must be met if a state law is to be preempted for conflicting with the purposes of a federal Act.’ That threshold is not met here.”  (Citations omitted.)

Fourth, the Court held that the law’s requirement that employers use E-Verify, even though its usage is voluntary under federal immigration law, is not preempted by federal law. The plain text of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) prevents only the Secretary of Homeland Security from making its usage mandatory. Contextually, the Court found support for this interpretation from the facts that Congress has expanded the availability of E-Verify over time and that the Department of Homeland Security has encouraged its usage. It also noted that the federal government has made E-Verify mandatory for federal contractors by executive order. Moreover, the Court concluded that the Chamber’s concerns about the burden on federal resources and about inaccuracies were undercut by claims to the contrary in the United States’ amicus curiae brief. (The United States supported the petitioners.) Finally, the Court found no conflict with federal law, since an employer’s only consequence of not using E-Verify under the state law is the same as under IIRIRA. The Court stated: “In both instances, the only result is that the employer forfeits the otherwise available rebuttable presumption that it complied with the law.” Notably, the Court did not consider whether additional consequences added to the Arizona statute after the case was first filed would conflict with federal law.

Justices Scalia, Alito, and Kennedy joined the opinion in full. Justice Thomas concurred in the judgment and joined the opinion, but only on the parts relating to the plain text of IRCA and IIRIRA (and the background of the case).

Justice Breyer’s dissent asserted that the Arizona law disturbs the balance among IRCA’s competing goals: to combat unauthorized employment, to protect employers from undue burdens, and to prevent employment discrimination. The dissent interpreted the savings clause to be limited to “laws licensing businesses that recruit or refer workers for employment.” It also concluded that E-Verify should not be mandatory, countering the majority’s conclusions and noting that IIRIRA explicitly describes it as a voluntary pilot program.

Focusing on the fact that states can discern only an employee’s immigration status, not work status, from the federal government, Justice Sotomayor’s dissent concluded that the savings clause should be interpreted to allow sanctions only “after a final federal determination that a person has violated IRCA by knowingly employing an unauthorized alien.” Such a reading, reasoned the dissent, ensures that that immigration laws are enforced “uniformly,” as IRCA states. The dissent found agreement with Justice Breyer’s conclusions about E-Verify but emphasized that Congress repeatedly decided to keep the program voluntary.  Sotomayor would have found implied preemption based on the Arizona imposing “explicitly unwanted burdens on the Federal Government,” contrary to congressional intent.

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