Chamber of Commerce of United States of America v. Whiting
179 L. Ed. 2d 1031, 2011 U.S. LEXIS 4018, 563 U.S. 582 (2011)
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Rule of Law:
A state law that imposes sanctions on employers who hire unauthorized aliens through the suspension or revocation of business licenses falls within the express "licensing and similar laws" saving clause of the federal Immigration Reform and Control Act (IRCA) and is therefore not preempted. Additionally, a state may mandate employers' use of the federal E-Verify system without conflicting with federal law, as the federal prohibition against mandating its use applies only to the Secretary of Homeland Security, not to the states.
Facts:
- In 1986, the U.S. Congress enacted the Immigration Reform and Control Act (IRCA), which made it unlawful for employers to knowingly hire unauthorized aliens and established a comprehensive federal enforcement scheme.
- IRCA included a provision expressly preempting most state or local civil or criminal sanctions for hiring unauthorized aliens, but created an exception, or 'saving clause,' for sanctions imposed 'through licensing and similar laws.'
- In 1996, Congress authorized a voluntary federal electronic employment verification program, later known as E-Verify, and specified that the Secretary of Homeland Security could not require any entity outside the Federal Government to participate.
- In 2007, Arizona enacted the Legal Arizona Workers Act.
- The Arizona law allows state courts to suspend or revoke the business licenses of employers found to have knowingly or intentionally employed an unauthorized alien.
- The Arizona law also requires every employer in the state to use the federal E-Verify system to check the work eligibility of all new hires.
Procedural Posture:
- The Chamber of Commerce of the United States and other organizations filed a pre-enforcement lawsuit in the U.S. District Court for the District of Arizona against various Arizona officials.
- The plaintiffs sought to enjoin the enforcement of the Legal Arizona Workers Act, arguing it was expressly and impliedly preempted by federal law.
- The District Court denied the plaintiffs' motion for a preliminary injunction, holding that the Arizona law was not preempted.
- The plaintiffs (as appellants) appealed to the U.S. Court of Appeals for the Ninth Circuit, with Arizona officials (as appellees) defending the District Court's ruling.
- The Ninth Circuit affirmed the judgment of the District Court.
- The U.S. Supreme Court granted certiorari to review the Ninth Circuit's decision.
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Issue:
Does the federal Immigration Reform and Control Act (IRCA) preempt an Arizona state law that provides for the suspension and revocation of business licenses of employers who knowingly hire unauthorized aliens and mandates that all employers use the federal E-Verify system?
Opinions:
Majority - Chief Justice Roberts
No. The Arizona law is not preempted because its licensing sanctions fall squarely within IRCA's saving clause and its E-Verify mandate does not conflict with federal law. The phrase 'licensing and similar laws' in IRCA's saving clause has a broad, plain meaning that includes the power to suspend or revoke licenses necessary to operate a business, such as articles of incorporation. Arizona's law is not impliedly preempted because it carefully tracks federal law by adopting the federal definition of 'unauthorized alien,' relying exclusively on federal determinations of an individual's status, and providing for the same good-faith affirmative defense as IRCA. The E-Verify mandate is also permissible because the federal statute, by its text, only prohibits the Secretary of Homeland Security from requiring its use, leaving states free to do so.
Dissenting - Justice Breyer
Yes. The Arizona law is preempted because it goes beyond the narrow scope of IRCA's 'licensing' exception and creates an obstacle to Congress's objectives. The 'licensing' exception should be read narrowly to apply only to specific, employment-related licensing schemes, such as those for farm labor contractors, that existed when IRCA was passed. Arizona's broad definition allows the exception to swallow the preemption rule and upsets the careful balance Congress struck between employer sanctions and preventing discrimination, as the law's severe 'business death penalty' will encourage employers to discriminate against foreign-looking workers. Furthermore, making the voluntary E-Verify program mandatory directly conflicts with and frustrates Congress's intent to maintain it as a voluntary pilot program.
Dissenting - Justice Sotomayor
Yes. The Arizona law is preempted because it establishes a separate state adjudication system that conflicts with IRCA's comprehensive and exclusive federal enforcement scheme. The saving clause should be interpreted to allow states to impose licensing sanctions only after a final federal determination that an employer has violated IRCA. By empowering its own courts to decide whether an employer has hired an unauthorized alien, Arizona undermines the uniform, centralized federal scheme Congress created. Congress withheld from the states the necessary information and tools (such as the 1-9 form for defense) to make such determinations, indicating it never intended for states to conduct their own proceedings. The mandatory E-Verify provision is also preempted as it frustrates federal policy by imposing unwanted burdens on a federal program.
Analysis:
This decision significantly expands state authority in the realm of immigration-related employment regulation. By broadly interpreting IRCA's 'licensing' saving clause, the Court affirmed that states can create parallel enforcement mechanisms to penalize employers who hire unauthorized aliens, so long as the sanctions are tied to business licensing. The ruling also established that states can mandate the use of the otherwise voluntary federal E-Verify system. This creates the potential for a complex patchwork of state laws, imposing varied compliance burdens on multi-state employers and shifting some enforcement responsibilities from the federal government to the states.
