Green Light For State Copycat Laws? - Arizona E-Verify Mandate Upheld By Supreme Court

May 26, 2011

Immigration and International Trade E-Alert

Green Light For State Copycat Laws? - Arizona E-Verify Mandate Upheld By Supreme Court

Today, the Supreme Court issued its decision in the Chamber of Commerce case challenging Arizona's E-Verify mandate and law allowing business licenses in the state to be revoked for knowingly hiring undocumented workers. The decision was a 5-3 decision with Chief Justice Roberts providing the opinion of the Court. Justice Ginsburg joined Justice Breyer on one of the dissents with Justice Sotomayor providing her separate dissent. Justice Kagan recused herself from the decision due to her prior position as the Solicitor General. Chief Justice Roberts along with Justices Scalia, Kennedy, Thomas, and Alito formed the majority opinion.

The Court reviewed how to interpret the federal Immigration Reform and Control Act of 1986 (IRCA) language, which preempts "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 USC §1324a(h)(2). The Legal Arizona Workers Act (LAWA) imposes civil sanctions (loss of licensure) on employers who knowingly employ unauthorized aliens. Arizona defended its law from preemption challenges, because it fell within the IRCA exception for licensing laws. The licensing provisions include virtually all business related licenses, other than professional licenses. Some, including Arizona's Governor, have referred to this provision as a business "death penalty." Arizona's law also subjects employers to increased enforcement not present under the federal system. For example, any citizen of Arizona can complain (anonymously or otherwise) to the state attorney general or a county attorney regarding a violation of LAWA, which "shall" be investigated.

For the majority, Chief Justice Roberts basically opined that LAWA fits within the statutory restrictions of IRCA and does not conflict with federal law. In pertinent part:

"The principle that Congress adopted in doing so was not that the Federal Government can impose large sanctions, and the States only small ones. IRCA instead preserved state authority over a particular category of sanctions—those imposed "through licensing and similar laws."

As to the E-Verify, LAWA's E-Verify mandate was held to be "consistent" with federal law. Justice Roberts noted that the provisions of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) setting up the pilot programs now known in part as E-Verify contained "no language circumscribing state action." The IIRIRA provisions prohibiting the Secretary of Homeland Security from requiring the use of E-Verify outside the federal government were held NOT to prohibit such action by the State of Arizona.

The dissenting Justices noted that federal law impliedly preempted the mandatory E-Verify provisions of LAWA and that Congressional intent clearly required E-Verify to be a voluntary program.

Currently, several states mandate the use of E-Verify for all employers: Arizona, Utah, Mississippi, and South Carolina. For other states to follow suit, they will have to weigh the potential impact of the costs related to enforcement of such provisions on limited state coffers. In addition, we will have to wait and see if the Supreme Court will decide to remand the Lozano v. Hazleton case back to the Third Circuit. The Hazleton case involves questions related to whether city ordinances encouraging employers to use E-Verify and prohibiting employers from harboring illegal aliens by knowingly renting to them are preempted by federal law. The petition for certiorari in the case was filed in December of 2010 and was distributed for Conference in the Supreme Court on March 18, 2011.

The decision rendered appears to open the floodgates to more state copycat laws to increase compliance burdens upon employers as backdoor immigration law enforcers. Employers must get their compliance house in order regarding the completion of I-9s. Unfortunately, this Supreme Court decision only creates a more hostile employer environment when we desperately need to increase job opportunities. Employers need clear compliance requirements within which to operate and not a state by state conundrum. More employers will need to consider the potential benefits of E-Verify – which to date still provides no true "safe harbor" from I-9 related penalties.


Our immigration compliance group looks forward to assisting you with any questions. Please contact Kathleen Campbell Walker or Lisa Rios with questions.

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