Chamber of Commerce of the United States v. Whiting

The Chamber of Commerce of the United States along with a collection of business and civil-right organizations (collectively “Chamber of Commerce”), filed suit against fifteen county attorneys of the State of Arizona (“Arizona”) arguing that the federal Immigration Reform and Control Act of 1986 (“IRCA”) preempts the Legal Arizona Workers Act (“LAWA”).  Both the district court and the Ninth Circuit disagreed, holding that IRCA did not preempt LAWA.  The Supreme Court will specifically address whether IRCA expressly or impliedly preempts LAWA’s Unauthorized Workers provision and whether federal law impliedly preempts LAWA’s E-Verify Mandate.

Is LAWA’s Unauthorized Workers Provision Expressly Preempted?

Traditionally, regulating unauthorized workers' employment fell within the states’ police powers.  Congress changed this, however, by passing IRCA in 1986.  IRCA expressly preempts the states’ power, but also creates a "savings clause," which allows states to use "licensing and similar laws" to sanction anyone who employs unauthorized workers. 

Arizona posits that LAWA’s Unauthorized Workers provision falls within the savings clause, thus escaping preemption.  The states argues that, under Arizona law, a "license" is defined to include permission forms required to operate a business such as articles of incorporation, certificates of partnership, and authority for foreign entities to conduct business in the State ("business licenses").  Because LAWA's penalties are to suspend and revoke these "business licenses," Arizona asserts that LAWA falls within IRCA's savings clause. 

The Chamber of Commerce disagrees. It contends that "license" has the meaning Congress intended, not what Arizona defines it as. It argues that Arizona exploited a loophole in LAWA by defining its way around preemption.  The Chamber of Commerce argues that Congress intended that the word "license" apply narrowly to "fitness to do business laws." It asserts that Congress was focused on this type of law, specifically farm labor contractor laws, where states required labor-contracting businesses to have a license.  The states only grant this license, however, if the contractor demonstrated it was fit to lawfully conduct business, and they revoke the license if the contractor failed to maintain a record of immigration law compliance.  Further, the Chamber posits that this type of licensing correlates with the dictionary definition of license: "a right or permission granted in accordance with law by a competent authority to engage in some business or occupation."  It argues that LAWA, in contrast, creates an entirely new regulatory scheme that departs from the traditional meaning of licensing laws Congress intended. 

Arizona counters, however, that Congress's purpose is ambiguous at best.  Arizona indicates that when Congress intended "license" to apply narrowly in the past, it did so expressly by referencing, for example, professional, occupational, or driver's licenses.  Arizona also points to the statute's phrase, "licensing and similar laws," as indicative of an intent broader than the Chamber of Commerce's interpretation.  Because Congress's intent is ambiguous, Arizona argues that a presumption exists against preemption.  Arizona also asserts that their "business licenses" fit the Chamber of Commerce's dictionary definition of "license" because they are rights and permissions granted by the State to do business, thus making it irrelevant whether Arizona's definition or the Chamber of Commerce's definition applies.  Thus, by sanctioning employers using these "business licenses," Arizona argues that LAWA is within the savings clause. 

The Chamber of Commerce also argues that the savings clause explicitly applies to sanctions only.  Therefore, according to the Chamber's view, it does not apply to state adjudication, authorized by LAWA, to determine who is an unauthorized worker, or to determine whether an employer knowingly hired an unauthorized worker. Thus, because these adjudications do not fall within the savings clause, the Chamber of Commerce asserts that they are preempted. 

Arizona claims that this interpretation is not what Congress intended.  Specifically, Arizona posits that nothing explicitly grants the federal courts exclusive jurisdiction over these adjudications; in fact, Arizona argues that IRCA's legislative history actually reveals that Congress intended state adjudications.  Arizona further contends that because Congress explicitly left power to the states to sanction via licensing, Congress also intended that the states have power to enforce these sanctions through state adjudications. 

Is LAWA’s Unauthorized Workers Provision Impliedly Preempted?

Alternatively, the Chamber of Commerce argues that IRCA impliedly preempts LAWA’s Unauthorized Workers provision because the rights and obligations under LAWA conflict with IRCA's structure and operation.  It reasons that IRCA constructed a comprehensive regulatory scheme to investigate and adjudicate work-authorization status, authorized federal officers to perform these investigations, and established the federal courts as the judicial bodies where employers can seek relief. Arizona's separate investigatory and adjudicatory processes, the Chamber of Commerce argues, simply do not fit within this framework. Furthermore, it argues that Arizona would improperly supersede federal law by relegating federal determinations of work-authorization status to a rebuttable presumption. 

Arizona counters by noting that IRCA only mentions federal procedures—it is silent regarding the states. While IRCA did establish a comprehensive regulatory matrix, Arizona argues that this alone fails to imply preemption. Indeed, Arizona attests that a presumption exists that anything left unaddressed by Congress remains subject to state law.  Arizona also argues that the rebuttable presumption for federal determinations actually parallels IRCA's intentions.  It states that LAWA specifically requires state officials to rely on federal work-authorization determinations, and only allows employers the opportunity to rebut these determinations in court—just as IRCA enables employers to rebut the determinations at the federal level.  Thus, Arizona argues that the rebuttable presumption merely parallels IRCA's requirements, and does not conflict with them. 

The Chamber of Commerce also argues that IRCA impliedly preempts LAWA's Unauthorized Workers provision because it meddles with the federal regulatory scheme, disturbing the balance Congress struck between numerous policy objectives. The Chamber of Commerce states that besides preventing unlawful immigration, Congress also sought to prevent employer discrimination, to minimize burdens on employers, and to protect potential employee's privacy. It argues that Arizona's separate regulatory scheme, unique adjudicatory standards, and different penalties, have completely rebalanced these interests in favor of furthering just one goal: preventing unlawful immigration. 

Nevertheless, Arizona contends that to avoid preemption, LAWA must only avoid a direct conflict with federal requirements, and need not advance every one of Congress's purposes. Besides, Arizona argues, LAWA does further many of Congress's objectives.  For example, Arizona points out that LAWA seeks to prevent discrimination by including a clause preventing an interpretation of LAWA that requires an employer to violate federal law. It also proscribes investigations based on race, color, or national origin.  Additionally, Arizona states that LAWA seeks to protect employers by mandating adjudicatory proceedings before imposing sanctions. Furthermore, Arizona argues that LAWA advances IRCA's mandate for "vigorous and uniform" enforcement because it applies sanctions via licensing laws, which is part of Congress's balancing act. 

Is LAWA's E-Verify Mandate Impliedly Preempted?

The Chamber of Commerce contends that federal law impliedly preempts LAWA's E-Verify requirement.  It argues that when LAWA forces employers to use E-Verify, it directly conflicts with Congress's wishes because E-Verify was intended as a temporary and experimental "pilot program," which Congress has kept strictly voluntary. 

Arizona asserts, however, that no conflict exists because employers do not face the dilemma of deciding between contrary state and federal requirements—participating in E-Verify does not violate any federal law.  Arizona further argues that the requirement actually furthers Congress's wishes because Congress ultimately intended to create an effective verification system, not a voluntary one.  Arizona contends that by making E-Verify mandatory, LAWA advances this goal because it helps eliminate lack of employer use, a barrier to E-Verify's effectiveness. Finally, Arizona indicates that if employers do not use E-Verify, the penalty is only loss of a favorable presumption, which is precisely what happens under federal law when an employer fails to voluntarily participate in E-Verify.  Thus, Arizona argues, LAWA only supplements federal law, and does not conflict with it.