D.Ariz.: Anti-immigrant law not preempted

Arizona’s federal district court upheld a state law that providers for the suspension and denial of business licenses to businesses that employ undocumented immigrants, and mandates participation in an otherwise voluntary federal electronic worker verification system. Arizona Contractors Association, Inc. v. Candelaria, 2008 WL 343082 (D.Ariz. Feb. 7, 2008) ((No. CV07-02496-PHX-NVW).

The court held that the law was not preempted by federal immigration law and provided sufficient due process. It subsequently refused to enjoined the law pending appeal, 2008 WL 486002 (Feb.19, 2008).

 

                The court’s decision did not mention a Pennsylvania decision issued last July that invalidated a similar local law.  Lozano v. City of Hazleton, 496 F.Supp.2d 477 (M.D.Pa. 2007) (holding ordinance preempted – summary here). In addition, the court may have been unaware of a decision just a week ago that upheld a similar law in Missouri. Gray v. City of Valley Park, Mo., 2008 WL 294294 (E.D.Mo. Jan. 31, 2008) (upholding ordinance – summary here).

 

                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, 8 U.S.C. § 1324a et seq., failed to provide procedural due process, and improperly regulated interstate commerce. The defendants stipulated, and the court accepted, the plaintiffs’ standing.

 

                IRCA expressly preempts state and local law sanctioning employers in relation to the employment of undocumented immigrants. However, the 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 Act is a ‘licensing law,’” the court held, “because it sets out criteria and a process to suspend or revoke a permission to do business in the state. It therefore falls within the plain meaning of IRCA’s savings clause.” While the plaintiffs argued that the Act “reaches some legal instruments that allegedly do not supply permission to do business in the state,” the court stated that this argument was inappropriate in the context of a facial challenge.

 

                The court rejected plaintiffs’ argument – based on a House Judiciary Committee Report on IRCA – that Congress intended only to authorize licensing sanctions where employers have been found liable in a federal proceeding. The court concluded that the House Report’s comments were not considered by the Senate, did not compel the interpretation plaintiffs urged, and could not “override the plain language of the statute.”

 

                The court stated that by including both a preemption provision and a saving clause, “Congress has defined the scope of its preemptive intent,” but addressed further preemption arguments “for the sake of thoroughness.” The court stated that regulation of the employment of undocumented workers is a proper area for state regulation, citing De Canas v. Bica, 424 U.S. 351 (1976) (holding state law prohibiting hiring of unauthorized alien workers was within state police power). Because LAWA was “within the mainstream of state police power regulation,” it employed a “presumption against preemption.” The Act was not a preempted regulation of the federal “field of immigration,” because it did not regulate individuals’ presence in the United States, only their employment. The court further stated that plaintiffs’ narrow interpretation of states’ licensing power under IRCA was “so narrow that it would lack deterrence and not be worth the cost of enforcement to the State.” Rather, the court argued that Congress intended to give state’s significant power to sanction employers in light of the “pervasive adverse effects” of the employment of undocumented workers on the states.

               

                The court also concluded that LAWA “does not make employers conform to a stricter standard of conduct than federal law.” The court noted that the Act’s definition of “knowingly” incorporates IRCA’s definition, and that both laws did not apply to “casual hires” or domestic workers. As to the possibility of conflicting state and federal adjudications, the court stated:

The Act’s adjudicatory procedures do not conflict with federal law merely because a State Superior Court judge and a federal administrative law judge could disagree about the evidence. That possibility arises in every instance of parallel state and federal adjudication. Furthermore, the Act precludes liability for employers whose employees are authorized to work in the United States according to the federal government.

 

The court also said that the Act did not have to include an antidiscrimination provision because Arizona and federal law already incorporate such provisions.

 

                As to the mandatory use of the Basic Pilot program, the court said it found no indication that this requirement would overburden the federal system, and that it was consistent with federal policy to encourage “the utmost use” of the system. “That Congress has not yet approved a bill mandating use of E-Verify within the federal employer sanctions process,” it concluded, “evinces Congressional intent regarding national—not state level—use of E-Verify.”

 

                On the due process issue, the parties contested whether the Act made federal determinations of employees’ immigration status conclusive or permitted additional evidence, and whether the Act applied to hires prior to its effective date. The court sidelined these questions. It stated that the Basic Pilot verification program itself, and the availability of federal employee verification through the state court, provided sufficient procedural fairness to withstand a facial challenge.

 

                Finally, the court rejected plaintiffs’ Commerce Clause challenge on the ground that the text of the Act precluded extra-territorial application and conflict with other state laws.