9th Cir.: Arizona worker verification law not preempted

The Ninth Circuit rejected a facial preemption challenge to Arizona’s law requiring employers to verify workers’ immigration status.

   The court held that the law was not covered by an express federal preemption provision because it regulating only business licenses. The court also held that the law was not impliedly preempted, because making use of a federally-created verification system mandatory is consistent with federal policy that promotes (but does not require) using the system. The court rejected a due process claim, interpreting the law to permit employers to show compliance. The court said it would not rule out a later as-applied challenge. Chicanos Por La Causa v. Napolitano, --- F.3d ----, 2008 WL 4225536 (9th Cir. Sep. 17, 2008) (No. 07-17272).

The Legal Arizona Workers Act (LAWA), A.R.S. §§ 23-211—23-214, empowers county attorneys to bring employers before a state court and have their business licenses suspended or denied if they employ undocumented immigrants. The Act also requires employers to participate in the federal Basic Pilot program – also known as E-Verify – to verify employees’ immigration status electronically; federal law makes participation in this program voluntary. A coalition of business groups alleged that the Act was expressly preempted by the Immigration Reform and Control Act, which expressly preempts state and local law sanctioning employers in relation to the employment of undocumented immigrants. However, the circuit court held that LAWA fell squarely within IRCA’s saving clause for “licensing and similar laws.” See 8 U.S.C. § 1324a(h)(2).

         The Ninth Circuit affirmed the decision of the district court upholding the law. 526 F.Supp.2d 968 (D.Ariz. Dec 07, 2007) (summary here). Other district courts have split on local laws. Compare Lozano v. City of Hazleton, 496 F.Supp.2d 477 (M.D.Pa. 2007) (ordinance preempted – summary here), with Gray v. City of Valley Park, Mo., 2008 WL 294294 (E.D.Mo. Jan. 31, 2008) (upholding ordinance – summary here).

          The Ninth Circuit employed the traditional “presumption against preemption,” because it found that “the power to regulate the employment of unauthorized aliens remains within the states’ historic police powers,” notwithstanding federal control over immigration. The court also noted that the challenge was “brought against a blank factual background of enforcement,” and that a later as-applied challenge could attempt to show a conflict. The court specifically refused to consider plaintiffs’ hypothetical of an employer facing conflicting state and federal determinations of an employee’s status. This situation might be resolved by “principles of comity or issue preclusion,” but the court stated that it was at any event speculative and could not support a facial challenge.

 

          The panel rejected the plaintiffs’ argument that IRCA exempts only regulations regarding professional licenses, as opposed to business licenses broadly. It held that IRCA’s use of “licensing” accorded with the traditional use of the term, which covered LAWA. The court also noted the House report on IRCA, which stated that it did not preempt “fitness to do business laws”; the court understood this to include laws like LAWA. The court held that since LAWA was a licensing law and did not regulate immigration status, it was not expressly preempted on its face. The court also found that there was no implied preemption on the face of LAWA, because, while Congress did not require the use of E-Verify, it “plainly envisioned and endorsed an increase in its usage.” Moreover, federal law requires the use of either E-Verify or the I-9 system, and the plaintiffs did not show that E-Verify resulted in greater discrimination against workers than I-9.

 

          Plaintiffs also complained that the terms of LAWA did not clearly provide employers with an opportunity to contest a finding of unauthorized status, in violation of the Due Process Clause. The court held that the law was at most ambiguous on this point, and should be interpreted to be consistent with due process.