Case: Arizona Contractors Ass'n v. Candelaria

This case is the reincarnation of a previously filed suit challenging the constitutionality of the Legal Arizona Workers Act (the "Act") styled Arizona Contractors Assoc., Inc. v. Napolitano. The District Court (Judge Wake) dismissed that suit on December 7, 2007 for lack of subject matter jurisdiction, finding that there was no justiciable case or controversy against the Governor or Attorney General, as they did not have the power to enforce the challenged Act. The Court noted that only county attorneys had that power.

Immediately after the dismissal, on December 9, 2007, a coalition of trade organizations and Arizona employers filed a lawsuit under 28 U.S.C. §§ 2201 and 2201 in the United States District Court for the District of Arizona, Phoenix division. The plaintiffs, represented by private counsel at this stage, asked the court for injunctive and declaratory relief and attorney's fees, challenging the constitutionality of the Act which requires Arizona employers to verify the employment eligibility of each employee through a federal verification program and established sanctions against Arizona employers that employed aliens who were not authorized to work. The Act provides the Superior Court of the State of Arizona with the power to suspend or revoke the business licenses of employers who intentionally or knowingly employ illegal aliens. Specifically, the plaintiffs claimed that the Act was pre-empted by federal immigration law.

A companion case was also refiled on December 12, 2007 by the Mexican American Legal Defense and Educational Fund, the National Immigration Law Center, the ACLU Foundation Immigrants Rights Project and the Arizona ACLU. That case was styled Chicanos Por La Causa, Inc. v. Goddard, 2:07-cv-02518-SMM.

The District Court (Judge Neil V. Wake) consolidated the cases on December 14, 2007.

Plaintiffs in the consolidated action alleged, as they had in the previously filed cases, that the Act violated the Supremacy Clause of the U. S. Constitution as it was preempted by federal immigration law and the federal government's exclusive authority to regulate immigration. Plaintiffs also asserted that the Act violated the due process rights of employers and workers. The Arizona Contractor plaintiffs also asserted violations of the Commerce Clause, the Fourth Amendment and the Arizona state constitution. Prior to consolidation, plaintiffs had requested a preliminary injunction in each case. Defendants moved to dismiss the cases.

On February 7, 2008 Judge Wake found that federal immigration law did not preempt the Act, and it did not violate the Due Process Clause or the Commerce Clause. Specifically, Judge Wake found that Section 1324a(h)(2) of the federal Immigration Reform and Control Act (IRCA) expressly authorized the Act at issue in this case. The relevant section of the federal statute reads "the provisions of this section preempt 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." Judge Wake found that the Act was a licensing or similar law and thus fell within the federal statute's savings clause. Furthermore, Judge Wake held that the Act's requirement of mandatory use of the federal E-Verify program did not conflict with federal objects or purposes, even though Congress had decided to make the program optional.

On appeal to the United States Court of Appeals for the 9th Circuit, the plaintiffs renewed their argument that federal law expressly preempted the Act. Moreover, the Act's mandatory requirement to use E-Verify, the plaintiffs contended, was impliedly preempted by federal law because it conflicts with the policies envisioned in the voluntary nature of the program under federal law. On September 17, 2008 the United States Court of Appeals for the 9th Circuit affirmed the District Court's finding. In doing so, the Court of Appeals held that federal immigration law did not preempt the Act. The court explained that the Act was not expressly preempted because it fell within ICRA's savings clause allowing for state licensing and similar laws to regulate the employment of unauthorized aliens. Moreover, the court found that federal law does not impliedly preempt the Act's provision mandating the use of E-Verify. The court found it telling that "Congress could have, but did not, expressly forbid state laws from requiring E-Verify participation."

On appeal to the United States Supreme Court, the Chamber of Commerce of the United States and the named petitioners of the consolidated cases that made it to the Supreme Court, argued that the Court of Appeals had misinterpreted ICRA's savings clause and consequently had incorrectly ruled that the Act was not preempted. Furthermore, the petitioners argued that even if the Act was not expressly preempted by ICRA, federal law impliedly preempted it because it conflicted with the structure and function of federal law. The respondents replied in their brief that the Court of Appeals had been correct when it held that federal law did not preempt the Act.

On May 26, 2011 the United States Supreme Court, in an opinion delivered by Chief Justice Roberts, affirmed the Court of Appeals for the 9th Circuit's judgment. In doing so, the Court held that the Act fell within ICRA's savings clause and was thus not expressly preempted by federal law. Specifically the Court found that "The Arizona law, on its face, purports to impose sanctions through licensing laws[,]" which placed it squarely within ICRA's savings clause that allowed for States to regulate the employment of unauthorized individuals through licensing and similar laws. The Court was particularly unmoved by the petitioners' argument that the Act was not a licensing law because it only dealt with the revocation of licenses rather than the granting of them. In fact, the Court flatly rejected argument. Moreover, the Court found that federal law did not impliedly preempt the Act because "Arizona's procedures simply implement the sanctions that Congress expressly allowed Arizona to pursue through licensing laws." Lastly, the Court found that the Act's requirement that employers use E-Verify was not impliedly preempted because it did not conflict with federal law.