On May 26, 2011, the United States Supreme Court handed down its decision in Chamber of Commerce of the United States of America v. Whiting in which petitioners had challenged a 2007 Arizona law imposing sanctions on businesses that hire unauthorized aliens.  Petitioners claimed that the Arizona law, the Legal Arizona Workers Act, was expressly, or alternatively, impliedly preempted by the Federal Immigration Reform and Control Act (IRCA).  In a split decision authored by Chief Justice Roberts, the Court held that the Legal Arizona Workers Act fell within ICRA’s statutory savings clause.  Chief Justice Roberts’ opinion was joined by Justices Scalia, Kennedy, and Alito.  Justice Thomas joined Roberts’ opinion except as to those parts treating petitioners’ claims of implied preemption and concurred in the result.  Justice Breyer, joined by Justice Ginsburg, and Justice Sotomayor filed separate dissenting opinions.  Justice Kagan recused herself and took no part in the consideration or decision of the case.

The Legal Arizona Workers Act allows an individual to file a complaint alleging that an employer has hired an unauthorized alien.  Filing of the complaint triggers the attorney general or county attorney’s obligation to verify the employee’s work authorization with the Federal Government pursuant to 8 U.S.C. § 1373(c).  If the employee is unauthorized, the attorney general or county attorney must notify Immigration and Customs Enforcement, local law enforcement, and institute proceedings against the employer.  Where an employer is found to have knowingly or intentionally hired an unauthorized alien, she must terminate all unauthorized employees and submit to probation.  Depending on the employer’s mens rea, the court either has the option or the duty to order the suspension of all business licenses for a minimum of 10 days.  If an employer is found guilty of a second violation (capable of occurring only at the same location and within the probationary period), the result is the permanent revocation of all business licenses. Where the employer has verified the employee’s eligibility using the Federal E-Verify system, it has an affirmative defense to the action.  The Legal Arizona Workers Act makes use of the E-Verify system mandatory for all Arizona employers.

Petitioners argued that IRCA expressly preempted State imposition of “civil or criminal sanctions” on employers of unauthorized aliens “other than through licensing and similar laws.”  8 U.S.C. § 1324a(h)(2).  The majority disagreed, holding that the Arizona law, on its face, purported to establish licensing sanctions and that Arizona’s definition of “licenses” subject to sanction mirrored the definition in the Administrative Procedure Act.  Justice Breyer, dissenting, argued that the Arizona law could be applied broadly to support the revocation of an employer’s driver’s license for noncompliance, for instance.  Justice Breyer argued that the licensing exception should be limited to “employment-related licensing systems” (emphasis in original), such as employment placement agencies.  In support of this argument, he noted that IRCA amended the Migrant and Seasonal Agricultural Worker Protection Act (AWPA), which implemented Federal regulations of agricultural labor contractors and was intended to coexist with state licensing schemes.  Justices Breyer and Sotomayor argued that the IRCA’s amendment of AWPA, together with legislative history, indicated Congress’s desire to limit § 1324(a)(h)(2)’s savings clause to these particular licensing schemes.  The majority disagreed, holding: “Arizona’s law falls within the plain text of IRCA’s savings clause.  And . . . Congress’s ‘authoritative statement is the statutory text, not the legislative history.’”  The majority similarly dismissed petitioners’ claim that mandatory use of the E-Verify system was expressly pre-empted, holding that under the provision authorizing the E-Verify program, Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) § 402(a), only the Secretary of  Homeland Security was constrained from mandating participation in the program.

Discussing petitioners’ implied preemption claims, Chief Justice Roberts, writing for a plurality, noted that licensing of state businesses is not a traditional area of federal concern and that while the law’s intended effect was to “result in more effective enforcement,” “in preserving to the States the authority to impose sanctions through licensing laws, Congress did not intend to preserve only those state laws that would have no effect.”  Further, Chief Justice Roberts noted that Congress’s continued renewal and expansion of the E-Verify program, the Department of Homeland Security’s strong advocacy of its use, and DHS’s amicus curiae brief stating that the E-Verify system was capable of accommodating increased use all militated against finding that Arizona’s mandatory E-Verify requirement was impliedly preempted.

The unspoken disagreement between the majority and dissenting opinions seemed to concern the effect of the Arizona law.  The majority framed the law as an effective means of inducing egregious violators to comply with the law.  Justices Breyer and Sotomayor, on the other hand, expressed concern that the Arizona law would cause firms to not hire “foreign-looking” or “sounding” employees due to concern about their immigration status.  Justice Breyer, in particular, argued that the Arizona law altered the careful balance at the Federal level between sanctions for hiring of unauthorized aliens and sanctions for employment discrimination.  Finally, Justices Breyer and Sotomayor both expressed concern with the E-Verify system.  Justice Breyer argued that the system returned far too many false positives, a statistical reading denied by the majority, and Justice Sotomayor worried about E-Verify’s ability to handle the cost and traffic associated with increased use.

The Whiting decision will affect similar laws in other states.  Several other states have enacted laws similar to the Legal Arizona Workers Act, including Colorado, Missouri, Pennsylvania, Virginia, and West Virginia.  In addition, Arizona’s controversial 2010 law require police officers to verify the immigration status of detainees has engendered similar legislation in other states and is almost certain to come before the Supreme Court.