CHAMBER OF COMMERCE OF THE UNITED STATES v. WHITING
Various business and civil-rights organizations challenged the enforceability of The Legal Arizona Worker's Act ("LAWA") in an Arizona federal district court. They argued that federal law preempted LAWA, which requires Arizona employers to use the federal E-Verify employment verification system and revokes business licenses of those who hire unauthorized workers. The district court upheld the statute.
On appeal the U.S. Court of Appeals for the Ninth Circuit affirmed, holding that LAWA was not preempted explicitly or impliedly by the federal Immigration Reform and Control Act ("IRCA"). The court reasoned that IRCA although IRCA expressly preempts all state and local laws imposing sanctions for hiring or recruiting unauthorized aliens, it excepts licensing laws – like LAWA – from preemptive reach. The court also reasoned that mandating the use of E-Verify is not impliedly preempted by IRCA because Congress could have, but did not, expressly forbid states form requiring E-Verify participation.
An Arizona law requires state employers to check the immigration status of job applicants through a federal computer database, although the federal law creating the database makes its use voluntary. Arizona also revokes the business license of state companies that hire undocumented workers. Are these provisions pre-empted by federal immigration laws?
Legal provision: Immigration Reform and Control Act
No. The Supreme Court affirmed the lower court holding in an opinion by Chief Justice John Roberts. "Arizona's licensing law falls well within the confines of the authority Congress chose to leave to the States and therefore is not expressly preempted." All five members of the majority did not join the chief justice's opinion in full. Meanwhile, Justice Stephen Breyer dissented, joined by Justice Ruth Bader Ginsburg. "Congress did not intend its 'licensing' language to create so broad an exemption, for doing so would permit States to eviscerate the federal Act's preemption provision," Breyer wrote. Justice Sonia Sotomayor authored a separate dissent in which she contended that she "would also hold that federal law pre-empts the provision of the Arizona Act making mandatory the use of E-Verify, the federal electronic verification system." The Justice Elena Kagan took no part in consideration of the case.
Opinion of the Court
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SUPREME COURT OF THE UNITED STATES
CHAMBER OF COMMERCE OF THE UNITED STATES
OF AMERICA, ET AL., PETITIONERS v. MICHAEL
B. WHITING ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[May 26, 2011]
CHIEF JUSTICE ROBERTS delivered the opinion of the Court, except as to Parts II–B and III–B.*
Federal immigration law expressly preempts “any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ . . . unauthorized aliens.” 8 U. S. C. §1324a(h)(2). A recently enacted Arizona statute—the Legal Arizona Workers Act—provides that the licenses of state employers that knowingly or intentionally employ unauthorized aliens may be, and in certain circumstances must be, suspended or revoked. The law also requires that all Arizona employers use a federal electronic verification system to confirm that the workers they employ are legally authorized workers. The question presented is whether federal immigration law preempts those provisions of Arizona law. Because we conclude that the State’s licensing provisions fall squarely within the federal statute’s savings clause and that the Arizona regulation does not otherwise conflict with federal law, we hold that the Arizona law is not preempted.
In 1952, Congress enacted the Immigration and Nationality Act (INA), 66 Stat. 163, as amended, 8 U. S. C. §1101 et seq. That statute established a “comprehensive federal statutory scheme for regulation of immigration and naturalization” and set “the terms and conditions of admission to the country and the subsequent treatment of aliens lawfully in the country.” De Canas v. Bica, 424 U. S. 351, 353, 359 (1976).
In the years following the enactment of the INA, several States took action to prohibit the employment of individuals living within state borders who were not lawful residents of the United States. For example, in 1971 California passed a law providing that “[n]o employer shall knowingly employ an alien who is not entitled to lawful residence in the United States if such employment would have an adverse effect on lawful resident workers.” 1971 Cal. Stats. ch. 1442, §1(a). The California law imposed fines ranging from $200 to $500 for each violation of this prohibition. §1(b). At least 11 other States enacted provisions during that same time period proscribing the employment of unauthorized aliens.1
We first addressed the interaction of federal immigration law and state laws dealing with the employment of unauthorized aliens in De Canas, 424 U. S. 351. In that case, we recognized that the “[p]ower to regulate immigration is unquestionably . . . a federal power.” Id., at 354. At the same time, however, we noted that the “States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State,” id., at 356, that “prohibit[ing] the knowing employment . . . of persons not entitled to lawful residence in the United States, let alone to work here, is certainly within the mainstream of [the State’s] police power,” ibid., and that the Federal Government had “at best” expressed “a peripheral concern with [the] employment of illegal entrants” at that point in time, id., at 360. As a result, we declined to hold that a state law assessing civil fines for the employment of unauthorized aliens was preempted by federal immigration law.
Ten years after De Canas, Congress enacted the Immigration Reform and Control Act (IRCA), 100 Stat. 3359. IRCA makes it “unlawful for a person or other entity . . . to hire, or to recruit or refer for a fee, for employment in the United States an alien knowing the alien is an unauthorized alien.” 8 U. S. C. §1324a(a)(1)(A). IRCA defines an “unauthorized alien” as an alien who is not “lawfully admitted for permanent residence” or not otherwise authorized by the Attorney General to be employed in the United States. §1324a(h)(3).
To facilitate compliance with this prohibition, IRCA requires that employers review documents establishing an employee’s eligibility for employment. §1324a(b). An employer can confirm an employee’s authorization to work by reviewing the employee’s United States passport, resident alien card, alien registration card, or other document approved by the Attorney General; or by reviewing a combination of other documents such as a driver’s license and social security card. §1324a(b)(1)(B)–(D). The employer must attest under penalty of perjury on Department of Homeland Security Form I–9 that he “has verified that the individual is not an unauthorized alien” by reviewing these documents. §1324a(b)(1)(A). The form I–9 itself “and any information contained in or appended to [it] . . . may not be used for purposes other than for enforcement of” IRCA and other specified provisions of federal law. §1324a(b)(5).
Employers that violate IRCA’s strictures may be subjected to both civil and criminal sanctions. Immigration and Customs Enforcement, an entity within the Department of Homeland Security, is authorized to bring charges against a noncompliant employer under §1324a(e). Depending on the circumstances of the violation, a civil fine ranging from $250 to $16,000 per unauthorized worker may be imposed. See §1324a(e)(4)(A); 73 Fed. Reg. 10136 (2008). Employers that engage in a pattern or practice of violating IRCA’s requirements can be criminally prosecuted, fined, and imprisoned for up to six months. §1324a(f)(1). The Act also imposes fines for engaging in “unfair immigration-related employment practice[s]” such as discriminating on the basis of citizenship or national origin. §1324b(a)(1); see §1324b(g)(2)(B). Good-faith compliance with IRCA’s I–9 document review requirements provides an employer with an affirmative defense if charged with a §1324a violation. §1324a(a)(3).
IRCA also restricts the ability of States to combat employment of unauthorized workers. The Act expressly preempts “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.” §1324a(h)(2). Under that provision, state laws imposing civil fines for the employment of unauthorized workers like the one we upheld in De Canas are now expressly preempted.
In 1996, in an attempt to improve IRCA’s employment verification system, Congress created three experimental complements to the I–9 process as part of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), 110 Stat. 3009–655, note following 8 U. S. C. §1324a. Arizona Contractors Assn., Inc. v. Candelaria, 534 F. Supp. 2d 1036, 1042 (Ariz. 2008); see 8 U. S. C. §1324a(d). Only one of those programs—E-Verify— remains in operation today. Originally known as the “Basic Pilot Program,” E-Verify “is an internet-based system that allows an employer to verify an employee’s work-authorization status.” Chicanos Por La Causa, Inc. v. Napolitano, 558 F. 3d 856, 862 (CA9 2009). An employer submits a request to the E-Verify system based on information that the employee provides similar to that used in the I–9 process. In response to that request, the employer receives either a confirmation or a tentative nonconfirmation of the employee’s authorization to work. An employee may challenge a nonconfirmation report. If the employee does not do so, or if his challenge is unsuccessful, his employment must be terminated or the Federal Government must be informed. See ibid.
In the absence of a prior violation of certain federal laws, IIRIRA prohibits the Secretary of Homeland Security from “requir[ing] any person or . . . entity” outside the Federal Government “to participate in” the E-Verify program, §402(a), (e), 110 Stat. 3009–656 to 3009–658. To promote use of the program, however, the statute provides that any employer that utilizes E-Verify “and obtains confirmation of identity and employment eligibility in compliance with the terms and conditions of the program . . . has established a rebuttable presumption” that it has not violated IRCA’s unauthorized alien employment prohibition, §402(b)(1), id., at 3009–656 to 3009–657.
Acting against this statutory and historical background, several States have recently enacted laws attempting to impose sanctions for the employment of unauthorized aliens through, among other things, “licensing and similar laws,” 8 U. S. C. §1324a(h)(2).2 Arizona is one of them. The Legal Arizona Workers Act of 2007 allows Arizona courts to suspend or revoke the licenses necessary to do business in the State if an employer knowingly or intentionally employs an unauthorized alien. Ariz. Rev. Stat. Ann. §§23–211, 212, 212.01 (West Supp. 2010) (citing 8 U. S. C. §1324a).
Under the Arizona law, if an individual files a complaint alleging that an employer has hired an unauthorized alien, the attorney general or the county attorney first verifies the employee’s work authorization with the Federal Government pursuant to 8 U. S. C. §1373(c). Ariz. Rev. Stat. Ann. §23–212(B). Section 1373(c) provides that the Federal Government “shall respond to an inquiry by a” State “seeking to verify or ascertain the citizenship or immigration status of any individual . . . by providing the requested verification or status information.” The Arizona law expressly prohibits state, county, or local officials from attempting “to independently make a final determination on whether an alien is authorized to work in the United States.” Ariz. Rev. Stat. Ann. §23–212(B). If the §1373(c) inquiry reveals that a worker is an unauthorized alien, the attorney general or the county attorney must notify United States Immigration and Customs Enforcement officials, notify local law enforcement, and bring an action against the employer. §23–212(C)(1)–(3), (D).
When a complaint is brought against an employer under Arizona law, “the court shall consider only the federal government’s determination pursuant to” 8 U. S. C. §1373(c) in “determining whether an employee is an unauthorized alien.” §23–212(H). Good-faith compliance with the federal I–9 process provides employers prosecuted by the State with an affirmative defense. §23–212(J).
A first instance of “knowingly employ[ing] an unauthorized alien” requires that the court order the employer to terminate the employment of all unauthorized aliens and file quarterly reports on all new hires for a probationary period of three years. §23–212(A), (F)(1)(a)–(b). The court may also “order the appropriate agencies to suspend all licenses . . . that are held by the employer for [a period] not to exceed ten business days.” §23–212(F)(1)(d). A second knowing violation requires that the adjudicating court “permanently revoke all licenses that are held by the employer specific to the business location where the unauthorized alien performed work.” §23–212(F)(2).
For a first intentional violation, the court must order the employer to terminate the employment of all unauthorized aliens and file quarterly reports on all new hires for a probationary period of five years. §23–212.01(A), (F)(1)(a)–(b). The court must also suspend all the employer’s licenses for a minimum of 10 days. §23– 212.01(F)(1)(c). A second intentional violation requires the permanent revocation of all business licenses. §23– 212.01(F)(2).
With respect to both knowing and intentional violations, a violation qualifies as a “second violation” only if it occurs at the same business location as the first violation, during the time that the employer is already on probation for a violation at that location. §23–212(F)(3)(a)–(b); §23– 212.01(F)(3)(a)–(b).
The Arizona law also requires that “every employer, after hiring an employee, shall verify the employment eligibility of the employee” by using E-Verify. §23– 214(A).3 “[P]roof of verifying the employment authorization of an employee through the e-verify program creates a rebuttable presumption that an employer did not knowingly employ an unauthorized alien.” §23–212(I).
The Chamber of Commerce of the United States and various business and civil rights organizations (collectively Chamber of Commerce or Chamber) filed a preenforcement suit in federal court against those charged with administering the Arizona law: more than a dozen Arizona county attorneys, the Governor of Arizona, the Arizona attorney general, the Arizona registrar of contractors, and the director of the Arizona Department of Revenue (collectively Arizona).4 The Chamber argued that the Arizona law’s provisions allowing the suspension and revocation of business licenses for employing unauthorized aliens were both expressly and impliedly preempted by federal immigration law, and that the mandatory use of E-Verify was impliedly preempted.
The District Court held that Arizona’s law was not preempted. 534 F. Supp. 2d 1036. It found that the plain language of IRCA’s preemption clause did not preempt the Arizona law because the state law does no more than impose licensing conditions on businesses operating within the State. Id., at 1045–1046. With respect to EVerify, the court concluded that although Congress had made the program voluntary at the national level, it had expressed no intent to prevent States from mandating participation. Id., at 1055–1057. The Court of Appeals affirmed the District Court in all respects, holding that Arizona’s law was a “ ‘licensing and similar law’ ” falling within IRCA’s savings clause and that none of the state law’s challenged provisions was “expressly or impliedly preempted by federal policy.” 558 F. 3d, at 860, 861, 866.
We granted certiorari. 561 U. S. ___ (2010).
The Chamber of Commerce argues that Arizona’s law is expressly preempted by IRCA’s text and impliedly preempted because it conflicts with federal law. We address each of the Chamber’s arguments in turn.
When a federal law contains an express preemption clause, we “focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ preemptive intent.” CSX Transp., Inc. v. Easterwood, 507 U. S. 658, 664 (1993).
IRCA expressly preempts States from imposing “civil or criminal sanctions” on those who employ unauthorized aliens, “other than through licensing and similar laws.” 8 U. S. C. §1324a(h)(2). The Arizona law, on its face, purports to impose sanctions through licensing laws. The state law authorizes state courts to suspend or revoke an employer’s business licenses if that employer knowingly or intentionally employs an unauthorized alien. Ariz. Rev. Stat. Ann. §23–212(A) and (F); §23–212.01(A) and (F). The Arizona law defines “license” as “any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued by any agency for the purposes of operating a business in” the State. §23–211(9)(a). That definition largely parrots the definition of “license” that Congress codified in the Administrative Procedure Act. See 5 U. S. C. §551(8) (“ ‘license’ includes the whole or a part of an agency permit, certificate, approval, registration, charter, membership, statutory exemption or other form of permission”).
Apart from that general definition, the Arizona law specifically includes within its definition of “license” documents such as articles of incorporation, certificates of partnership, and grants of authority to foreign companies to transact business in the State. Ariz. Rev. Stat. Ann. §23–211(9). These examples have clear counterparts in the APA definition just quoted. See 5 U. S. C. §551(8) (defining “license” as including a “registration” or “charter”).
A license is “a right or permission granted in accordance with law . . . to engage in some business or occupation, to do some act, or to engage in some transaction which but for such license would be unlawful.” Webster’s Third New International Dictionary 1304 (2002). Articles of incorporation and certificates of partnership allow the formation of legal entities and permit them as such to engage in business and transactions “which but for such” authorization “would be unlawful.” Ibid.; see Ariz. Rev. Stat. Ann. §§10–302, 302(11) (West 2004) (articles of incorporation allow a corporation “to carry out its business and affairs” and to “[c]onduct its business”); see also §10–202(A)(3) (West Supp. 2010). As for state-issued authorizations for foreign businesses to operate within a State, we have repeatedly referred to those as “licenses.” See, e.g., Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U. S. 408, 417 (1984); G. D. Searle & Co. v. Cohn, 455 U. S. 404, 413, n. 8 (1982); Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U. S. 516, 518 (1923). Moreover, even if a law regulating articles of incorporation, partnership certificates, and the like is not itself a “licensing law,” it is at the very least “similar” to a licensing law, and therefore comfortably within the savings clause. 8 U. S. C. §1324a(h)(2).5
The Chamber and the United States as amicus argue that the Arizona law is not a “licensing” law because it operates only to suspend and revoke licenses rather than to grant them. Again, this construction of the term runs contrary to the definition that Congress itself has codified. See 5 U. S. C. §551(9) (“ ‘licensing’ includes agency process respecting the grant, renewal, denial, revocation, suspension, annulment, withdrawal, limitation, amendment, modification, or conditioning of a license” (emphasis added)). It is also contrary to common sense. There is no basis in law, fact, or logic for deeming a law that grants licenses a licensing law, but a law that suspends or revokes those very licenses something else altogether. The Chamber also submits that the manner in which Congress amended a related statute when enacting IRCA supports a narrow interpretation of the savings clause. The Migrant and Seasonal Agricultural Worker Protection Act (AWPA), 29 U. S. C. §1801 et seq., requires employers to secure a registration certificate from the Department of Labor before engaging in any “farm labor contracting activity.” §1811(a). Prior to IRCA, AWPA had contained its own prohibition on hiring unauthorized workers, with accompanying adjudication procedures. See §1813(a); §1816(a) (1982 ed.) (repealed by IRCA, 100 Stat. 3372); §1851(a)–(b) (1982 ed.) (amended by IRCA, 100 Stat. 3372). When Congress enacted IRCA, it repealed AWPA’s separate unauthorized worker prohibition and eliminated the associated adjudication process. Under the current state of the law, an AWPA certification may be denied based on a prior IRCA violation. §1813(a)(6) (2006 ed.). And once obtained, that certification can be revoked because of the employment of an unauthorized alien only following a finding of an IRCA violation. Ibid.
The Chamber asserts that IRCA’s amendment of AWPA shows that Congress meant to allow state licensing sanctions only after a federal IRCA adjudication, just as adverse action under AWPA can now be taken only through IRCA’s procedures. But the text of IRCA’s savings clause says nothing about state licensing sanctions being contingent on prior federal adjudication, or indeed about state licensing processes at all. The simple fact that federal law creates procedures for federal investigations and adjudications culminating in federal civil or criminal sanctions does not indicate that Congress intended to prevent States from establishing their own procedures for imposing their own sanctions through licensing. Were AWPA not amended to conform with IRCA, two different federal agencies would be responsible for administering two different unauthorized alien employment laws. The conforming amendments eliminated that potential redundancy and centralized federal adjudicatory authority. That hardly supports a conclusion that any state licensing programs must also be contingent on the central federal system.
In much the same vein, the Chamber argues that Congress’s repeal of “AWPA’s separate prohibition concerning unauthorized workers belies any suggestion that IRCA meant to authorize each of the 50 States . . . to impose its own separate prohibition,” and that Congress instead wanted uniformity in immigration law enforcement. Brief for Petitioners 36. JUSTICE BREYER also objects to the departure from “one centralized enforcement scheme” under federal law. Post, at 7 (dissenting opinion). But Congress expressly preserved the ability of the States to impose their own sanctions through licensing; that—like our federal system in general—necessarily entails the prospect of some departure from homogeneity. And as for “separate prohibition[s],” it is worth recalling that the Arizona licensing law is based exclusively on the federal prohibition—a court reviewing a complaint under the Arizona law may “consider only the federal government’s determination” with respect to “whether an employee is an unauthorized alien.” §23–212(H).
Even more boldly, the Chamber contends that IRCA’s savings clause was intended to allow States to impose licensing sanctions solely on AWPA-related farm contracting licensees. AWPA specifically recognized that federal regulation of farm contracting licensing was only “intended to supplement State law,” 29 U. S. C. §1871, and the Chamber argues that the purpose of IRCA’s savings clause was limited to preserving existing state farm contractor licensing programs. But here again no such limit is remotely discernible in the statutory text. Absent any textual basis, we are not inclined to limit so markedly the otherwise broad phrasing of the savings clause. See United States v. Shreveport Grain & Elevator Co., 287 U. S. 77, 83 (1932) (“extrinsic aids to construction” may be used “to solve, but not to create, an ambiguity” (emphasis and internal quotation marks omitted)).
The Chamber argues that its textual and structural arguments are bolstered by IRCA’s legislative history. We have already concluded that Arizona’s law falls within the plain text of IRCA’s savings clause. And, as we have said before, Congress’s “authoritative statement is the statutory text, not the legislative history.” Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U. S. 546, 568 (2005); see also Hoffman Plastic Compounds, Inc. v. NLRB, 535 U. S. 137, 149–150, n. 4 (2002). Whatever the usefulness of relying on legislative history materials in general, the arguments against doing so are particularly compelling here. Beyond verbatim recitation of the statutory text, all of the legislative history documents related to IRCA save one fail to discuss the savings clause at all. The Senate Judiciary Committee Report on the Senate version of the law does not comment on it. See S. Rep. No. 99–132 (1985). Only one of the four House Reports on the law touches on the licensing exception, see H. R. Rep. No. 99– 682, pt. 1, p. 58 (1986), and we have previously dismissed that very report as “a rather slender reed” from “one House of a politically divided Congress.” Hoffman, supra, at 149–150, n. 4. And the Conference Committee Report does not discuss the scope of IRCA’s preemption provision in any way. See H. Conf. Rep. No. 99–1000 (1986).6 IRCA expressly preempts some state powers dealing with the employment of unauthorized aliens and it expressly preserves others. We hold that Arizona’s licensing law falls well within the confines of the authority Congress chose to leave to the States and therefore is not expressly preempted.
As an alternative to its express preemption argument, the Chamber contends that Arizona’s law is impliedly preempted because it conflicts with federal law. At its broadest level, the Chamber’s argument is that Congress “intended the federal system to be exclusive,” and that any state system therefore necessarily conflicts with federal law. Brief for Petitioners 39. But Arizona’s procedures simply implement the sanctions that Congress expressly allowed Arizona to pursue through licensing laws. Given that Congress specifically preserved such authority for the States, it stands to reason that Congress did not intend to prevent the States from using appropriate tools to exercise that authority.
And here Arizona went the extra mile in ensuring that its law closely tracks IRCA’s provisions in all material respects. The Arizona law begins by adopting the federal definition of who qualifies as an “unauthorized alien.” Compare 8 U. S. C. §1324a(h)(3) (an “unauthorized alien” is an alien not “lawfully admitted for permanent residence” or not otherwise authorized by federal law to be employed) with Ariz. Rev. Stat. Ann. §23–211(11) (adopting the federal definition of “unauthorized alien”); see De Canas, 424 U. S., at 363 (finding no preemption of state law that operates “only with respect to individuals whom the Federal Government has already declared cannot work in this country”).
Not only that, the Arizona law expressly provides that state investigators must verify the work authorization of an allegedly unauthorized alien with the Federal Government, and “shall not attempt to independently make a final determination on whether an alien is authorized to work in the United States.” §23–212(B). What is more, a state court “shall consider only the federal government’s determination” when deciding “whether an employee is an unauthorized alien.” §23–212(H) (emphasis added). As a result, there can by definition be no conflict between state and federal law as to worker authorization, either at the investigatory or adjudicatory stage.7 The federal determination on which the State must rely is provided under 8 U. S. C. §1373(c). See supra, at 6–7. That provision requires the Federal Government to “verify or ascertain” an individual’s “citizenship or immigration status” in response to a state request. JUSTICE BREYER is concerned that this information “says nothing about work authorization.” Post, at 9 (dissenting opinion). JUSTICE SOTOMAYOR shares that concern. Post, at 10 (dissenting opinion). But if a §1373(c) inquiry reveals that someone is a United States citizen, that certainly answers the question whether that individual is authorized to work. The same would be true if the response to a §1373(c) query disclosed that the individual was a lawful permanent resident alien or, on the other hand, had been ordered removed. In any event, if the information provided under §1373(c) does not confirm that an employee is an unauthorized alien, then the State cannot prove its case. See Brief for Respondents 50, n. 10 (“if the information from the federal authorities does not establish that a person is an unauthorized alien, it means that the county attorney cannot satisfy his burden of proof in an enforcement action”); Tr. of Oral Arg. 47.
From this basic starting point, the Arizona law continues to trace the federal law. Both the state and federal law prohibit “knowingly” employing an unauthorized alien. Compare 8 U. S. C. §1324a(a)(1)(A) with Ariz. Rev. Stat. Ann. §23–212(A).8 But the state law does not stop there in guarding against any conflict with the federal law. The Arizona law provides that “ ‘[k]nowingly employ an unauthorized alien’ means the actions described in 8 Code §1324a,” and that the “term shall be interpreted consistently with 8 United States Code §1324a and any applicable federal rules and regulations.” §23–211(8).
The Arizona law provides employers with the same affirmative defense for good-faith compliance with the I–9 process as does the federal law. Compare 8 U. S. C. §1324a(a)(3) (“A person or entity that establishes that it has complied in good faith with the [employment verification] requirements of [§1324a(b)] with respect to hiring . . . an alien . . . has established an affirmative defense that the person or entity has not violated” the law) with Ariz. Rev. Stat. Ann. §23–212(J) (“an employer that establishes that it has complied in good faith with the requirements of 8 United States Code section 1324a(b) establishes an affirmative defense that the employer did not knowingly employ an unauthorized alien”).9 And both the federal and Arizona law accord employers a rebuttable presumption of compliance with the law when they use E-Verify to validate a finding of employment eligibility. Compare IIRIRA §402(b), 110 Stat. 3009–656 to 3009–657 with Ariz. Rev. Stat. Ann. §23–212(I).
Apart from the mechanics of the Arizona law, the Chamber argues more generally that the law is preempted because it upsets the balance that Congress sought to strike when enacting IRCA. In the Chamber’s view, IRCA reflects Congress’s careful balancing of several policy considerations—deterring unauthorized alien employment, avoiding burdens on employers, protecting employee privacy, and guarding against employment discrimination. According to the Chamber, the harshness of Arizona’s law “ ‘exert[s] an extraneous pull on the scheme established by Congress’ ” that impermissibly upsets that balance. Brief for Petitioners 45 (quoting Buckman Co. v. Plaintiffs’ Legal Comm., 531 U. S. 341, 353 (2001)); see Brief for Petitioners 42–45; Reply Brief for Petitioners 20.
As an initial matter, the cases on which the Chamber relies in advancing this argument all involve uniquely federal areas of regulation. See American Ins. Assn. v. Garamendi, 539 U. S. 396, 401, 405–406 (2003) (presidential conduct of foreign policy); Crosby v. National Foreign Trade Council, 530 U. S. 363, 373–374 (2000) (foreign affairs power); Buckman Co. v. Plaintiffs’ Legal Comm., 531 U. S. 341, 352 (2001) (fraud on a federal agency); United States v. Locke, 529 U. S. 89, 97, 99 (2000) (regulation of maritime vessels); Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141, 143–144 (1989) (patent law). Regulating in-state businesses through licensing laws has never been considered such an area of dominant federal concern.
Furthermore, those cases all concern state actions that directly interfered with the operation of the federal program. In Buckman, for example, the Court determined that allowing a state tort action would cause applicants before a federal agency “to submit a deluge of information that the [agency] neither wants nor needs, resulting in additional burdens on the [agency’s] evaluation of an application,” and harmful delays in the agency process. 531 U. S., at 351. In Garamendi, a state law imposing sanctions on insurance companies directly “thwart[ed] the [Federal] Government’s policy of repose” for insurance companies that participated in an international program negotiated by the President. 539 U. S., at 425. Crosby involved a state law imposing sanctions on any entity doing business with Burma, a law that left the President with “less to offer and less economic and diplomatic leverage” in exercising his foreign affairs powers. 530 U. S., at 377. The state law in Bonito Boats extended patent-like protection “for subject matter for which patent protection has been denied or has expired,” “thus eroding the general rule of free competition upon which the attractiveness of the federal patent bargain depends.” 489 U. S., at 159, 161. And the portions of Locke on which the Chamber relies involved state efforts “to impose additional unique substantive regulation on the at-sea conduct of vessels”— “an area where the federal interest has been manifest since the beginning of our Republic.” 529 U. S., at 106, 99. There is no similar interference with the federal program in this case; that program operates unimpeded by the state law.
License suspension and revocation are significant sanctions. But they are typical attributes of a licensing regime. Numerous Arizona laws provide for the suspension or revocation of licenses for failing to comply with specified state laws. See, e.g., Ariz. Rev. Stat. Ann. §§5–108.05(D), 32–852.01(L), 32–1154(B), 32–1451(M), 41–2186 (West 2002). Federal law recognizes that the authority to license includes the authority to suspend, revoke, annul, or withdraw a license. See 5 U. S. C. §551(9). Indeed, AWPA itself—on which the Chamber so heavily relies—provides that AWPA “certificates of registration” can be suspended or revoked for employing an unauthorized alien. 29 U. S. C. §1813(a)(6). It makes little sense to preserve state authority to impose sanctions through licensing, but not allow States to revoke licenses when appropriate as one of those sanctions.
The Chamber and JUSTICE BREYER assert that employers will err on the side of discrimination rather than risk the “ ‘business death penalty’ ” by “hiring unauthorized workers.” Post, at 6–7 (dissenting opinion); see Brief for Petitioners 3, 35. That is not the choice. License termination is not an available sanction simply for “hiring unauthorized workers.” Only far more egregious violations of the law trigger that consequence. The Arizona law covers only knowing or intentional violations. The law’s permanent licensing sanctions do not come into play until a second knowing or intentional violation at the same business location, and only if the second violation occurs while the employer is still on probation for the first. These limits ensure that licensing sanctions are imposed only when an employer’s conduct fully justifies them. An employer acting in good faith need have no fear of the sanctions.
As the Chamber points out, IRCA has its own antidiscrimination provisions, see 8 U. S. C. §1324b(a)(1), (g)(1)(B) (imposing sanctions for discrimination “against any individual . . . with respect to the hiring . . . or the discharging of the individual from employment”); Arizona law certainly does nothing to displace those. Other federal laws, and Arizona anti-discrimination laws, provide further protection against employment discrimination—and strong incentive for employers not to discriminate. See, e.g., 42 U. S. C. §2000e–2(a) (prohibiting discrimination based on “race, color, religion, sex, or national origin”); Ariz. Rev. Stat. Ann. §41–1463(B)(1) (West Supp. 2010) (prohibiting employment discrimination based on “race, color, religion, sex, age, or national origin”).
All that is required to avoid sanctions under the Legal Arizona Workers Act is to refrain from knowingly or intentionally violating the employment law. Employers enjoy safe harbors from liability when they use the I–9 system and E-Verify—as Arizona law requires them to do. The most rational path for employers is to obey the law—both the law barring the employment of unauthorized aliens and the law prohibiting discrimination—and there is no reason to suppose that Arizona employers will choose not to do so.
As with any piece of legislation, Congress did indeed seek to strike a balance among a variety of interests when it enacted IRCA. Part of that balance, however, involved allocating authority between the Federal Government and the States. The principle that Congress adopted in doing so was not that the Federal Government can impose large sanctions, and the States only small ones. IRCA instead preserved state authority over a particular category of sanctions—those imposed “through licensing and similar laws.”
Of course Arizona hopes that its law will result in more effective enforcement of the prohibition on employing unauthorized aliens. But in preserving to the States the authority to impose sanctions through licensing laws, Congress did not intend to preserve only those state laws that would have no effect. The balancing process that culminated in IRCA resulted in a ban on hiring unauthorized aliens, and the state law here simply seeks to enforce that ban.
Implied preemption analysis does not justify a “freewheeling judicial inquiry into whether a state statute is in tension with federal objectives”; such an endeavor “would undercut the principle that it is Congress rather than the courts that preempts state law.” Gade v. National Solid Wastes Management Assn., 505 U. S. 88, 111 (1992) (KENNEDY, J., concurring in part and concurring in judgment); see Silkwood v. Kerr-McGee Corp., 464 U. S. 238, 256 (1984). Our precedents “establish that a high threshold must be met if a state law is to be pre-empted for conflicting with the purposes of a federal Act.” Gade, supra, at 110. That threshold is not met here.III
The Chamber also argues that Arizona’s requirement that employers use the federal E-Verify system to determine whether an employee is authorized to work is impliedly preempted. In the Chamber’s view, “Congress wanted to develop a reliable and non-burdensome system of work-authorization verification” that could serve as an alternative to the I–9 procedures, and the “mandatory use of E-Verify impedes that purpose.” 558 F. 3d, at 866.
We begin again with the relevant text. The provision of IIRIRA setting up the program that includes E-Verify contains no language circumscribing state action. It does, however, constrain federal action: absent a prior violation of federal law, “the Secretary of Homeland Security may not require any person or other entity [outside of the Federal Government] to participate in a pilot program” such as E-Verify. IIRIRA §402(a), 110 Stat. 3009–656. That provision limits what the Secretary of Homeland Security may do—nothing more.
The Federal Government recently argued just that, and approvingly referenced Arizona’s E-Verify law when doing so. In 2008, an Executive Order mandated that executive agencies require federal contractors to use E-Verify as a condition of receiving a federal contract. See Exec. Order No. 13465, 73 Fed. Reg. 33286 (2008). When that Order and its implementing regulation were challenged, the Government pointed to Arizona’s E-Verify mandate as an example of a permissible use of that system: “[T]he State of Arizona has required all public and private employers in that State to use E-Verify . . . . This is permissible because the State of Arizona is not the Secretary of Homeland Security.” Defendants’ Reply Memorandum in Support of Their Motion for Summary Judgment in No. 8:08– cv–03444 (D Md.), p. 7 (emphasis added), appeal dism’d, No. 09–2006 (CA4, Dec. 14, 2009).
Arizona’s use of E-Verify does not conflict with the federal scheme. The Arizona law requires that “every employer, after hiring an employee, shall verify the employment eligibility of the employee” through E-Verify. Ariz. Rev. Stat. Ann. §23–214(A) (West Supp. 2010). That requirement is entirely consistent with the federal law. And the consequences of not using E-Verify under the Arizona law are the same as the consequences of not using the system under federal law. In both instances, the only result is that the employer forfeits the otherwise available rebuttable presumption that it complied with the law. Compare IIRIRA §402(b)(1) with Ariz. Rev. Stat. Ann. §23–212(I).10
Congress’s objective in authorizing the development of E-Verify was to ensure reliability in employment authorization verification, combat counterfeiting of identity documents, and protect employee privacy. 8 U. S. C. §1324a(d)(2). Arizona’s requirement that employers operating within its borders use E-Verify in no way obstructs achieving those aims.
In fact, the Federal Government has consistently expanded and encouraged the use of E-Verify. When EVerify was created in 1996, it was meant to last just four years and it was made available in only six States. IIRIRA §401(b) and (c)(1), 110 Stat. 3009–655 to 3009– 656. Congress since has acted to extend the E-Verify program’s existence on four separate occasions, the most recent of which ensures the program’s vitality through 2012.11 And in 2003 Congress directed the Secretary of Homeland Security to make E-Verify available in all 50 States. 117 Stat. 1944; IIRIRA §401(c)(1), 110 Stat. 3009– 656. The Department of Homeland Security has even used “billboard and radio advertisements . . . to encourage greater participation” in the E-Verify program. 534 F. Supp. 2d, at 1056.
The Chamber contends that “if the 49 other States followed Arizona’s lead, the state-mandated drain on federal resources would overwhelm the federal system and render it completely ineffective, thereby defeating Congress’s primary objective in establishing E-Verify.” Brief for Petitioners 50–51. Whatever the legal significance of that argument, the United States does not agree with the factual premise. According to the Department of Homeland Security, “the E-Verify system can accommodate the increased use that the Arizona statute and existing similar laws would create.” Brief for United States as Amicus Curiae 34. And the United States notes that “[t]he government continues to encourage more employers to participate” in E-Verify. Id., at 31.
The Chamber has reservations about E-Verify’s reliability, see Brief for Petitioners 49, n. 27, but again the United States disagrees. The Federal Government reports that “E-Verify’s successful track record . . . is borne out by findings documenting the system’s accuracy and participants’ satisfaction.” Brief for United States as Amicus Curiae 31. Indeed, according to the Government, the program is “the best means available to determine the employment eligibility of new hires.” U. S. Dept. of Homeland Security, U. S. Citizenship and Immigration Services, E-Verify User Manual for Employers 4 (Sept. 2010).12
* * *
IRCA expressly reserves to the States the authority to impose sanctions on employers hiring unauthorized workers, through licensing and similar laws. In exercising that authority, Arizona has taken the route least likely to cause tension with federal law. It uses the Federal Government’s own definition of “unauthorized alien,” it relies solely on the Federal Government’s own determination of who is an unauthorized alien, and it requires Arizona employers to use the Federal Government’s own system for checking employee status. If even this gives rise to impermissible conflicts with federal law, then there really is no way for the State to implement licensing sanctions, contrary to the express terms of the savings clause.
Because Arizona’s unauthorized alien employment law fits within the confines of IRCA’s savings clause and does not conflict with federal immigration law, the judgment of the United States Court of Appeals for the Ninth Circuit is affirmed. It is so ordered.
JUSTICE KAGAN took no part in the consideration or decision of this case. *JUSTICE THOMAS joins Parts I, II–A, and III–A of this opinion and concurs in the judgment.
1 See Conn. Gen. Stat. §31–51k (1973) (enacted 1972); Del. Code Ann., Tit. 19, §705 (Cum. Supp. 1978) (enacted 1976); Fla. Stat. §448.09 (1981) (enacted 1977); Kan. Stat. Ann. §21–4409 (1981) (enacted 1973); 1985 La. Acts p. 1894; 1977 Me. Acts p. 171; 1976 Mass. Acts p. 641; Mont. Code Ann. §41–121 (1977 Cum. Supp.); N. H. Rev. Stat. Ann. §275–A:4–a (1986 Cum. Supp.) (enacted 1976); 1977 Vt. Laws p. 320; 1977 Va. Acts ch. 438.
2 See, e.g., Colo. Rev. Stat. Ann. §8–17.5–102 (2008); Miss. Code Ann. §71–11–3(7)(e) (Supp. 2010); Mo. Rev. Stat. §§285–525, 285–535 (2009 Cum. Supp.); Pa. Stat. Ann., Tit. 73, §820.311 (Purdon Supp. 2010); S. C. Code Ann. §41–8–50(D)(2) (Supp. 2010); Tenn. Code Ann. §50–1– 103(d) (2008); Va. Code Ann. §2.2–4311.1 (Lexis 2008); W. Va. Code Ann. §21–1B–7 (Lexis Supp. 2010).
3 Several States have passed statutes mandating the use of E-Verify. See, e.g., Miss. Code Ann. §71–11–3(3)(d), (4)(b)(i) (Supp. 2010); S. C. Code Ann. §41–8–20(B)–(C) (Supp. 2010); Utah Code Ann. §13–47– 201(1) (Lexis Supp. 2010); Va. Code Ann. §40.1–11.2 (Lexis Supp. 2010).
4 No suits had been brought under the Arizona law when the complaint in this case was filed. As of the date that Arizona submitted its merits brief to this Court only three enforcement actions had been pursued against Arizona employers. See Arizona v. Waterworld Ltd. Partnership, No. CV2009–038848 (Maricopa Cty. Super. Ct., filed Dec. 21, 2009) (resolved by consent judgment); Arizona v. Danny’s Subway Inc., No. CV2010–005886 (Maricopa Cty. Super. Ct., filed Mar. 9, 2010) (resolved by consent decree); Arizona v. Scottsdale Art Factory, LLC, No. CV2009–036359 (Maricopa Cty. Super. Ct., filed Nov. 18, 2009) (pending).
5JUSTICE BREYER recognizes that Arizona’s definition of the word “license” comports with dictionaries’ treatment of the term, but argues that “license” must be read in a more restricted way so as not to include things such as “marriage licenses” and “dog licens[es].” Post, at 2, 12 (dissenting opinion). Luckily, we need not address such fanciful hypotheticals; Arizona limits its definition of “license” to those state permissions issued “for the purposes of operating a business” in the State. Ariz. Rev. Stat. Ann. §23–211(9)(a) (West Supp. 2010). JUSTICE BREYER’s primary concern appears to be that state permissions such as articles of incorporation and partnership certificates are treated as “licensing and similar laws.” Because myriad other licenses are required to operate a business, that concern is largely academic. See §42–5005(A) (West 2006) (Corporations that receive “gross proceeds of sales or gross income upon which a privilege tax is imposed . . . shall make application to the department for a privilege license.” Such a corporation “shall not engage or continue in business until the [corporation] has obtained a privilege license.”). Suspending or revoking an employer’s articles of incorporation will often be entirely redundant. See §§42–5010, 5061–5076 (West 2006 and West Supp. 2010) (describing when transaction privilege tax licenses are required).
6JUSTICE BREYER poses several rhetorical questions challenging our reading of IRCA and then goes on to propose two seemingly alternative views of the phrase “licensing and similar laws”—that it was meant to refer to “employment-related licensing systems,” post, at 11 (dissenting opinion) (emphasis deleted), or, even more narrowly, to “the licensing of firms in the business of recruiting or referring workers for employment, such as . . . state agricultural labor contractor licensing schemes,” post, at 13. If we are asking questions, a more telling one may be why, if Congress had intended such limited exceptions to its prohibition on state sanctions, it did not simply say so, instead of excepting “licensing and similar laws” generally? JUSTICE SOTOMAYOR takes a different tack. Invoking arguments that resemble those found in our implied preemption cases, she concludes that the Arizona law “falls outside” the savings clause and is expressly preempted because it allows “state courts to determine whether a person has employed an unauthorized alien.” Post, at 2 (dissenting opinion). While JUSTICE BREYER would add language to the statute narrowly limiting the phrase “licensing and similar laws” to specific types of licenses, JUSTICE SOTOMAYOR creates an entirely new statutory requirement: She would allow States to impose sanctions through “licensing and similar laws” only after a federal adjudication. Such a requirement is found nowhere in the text, and JUSTICE SOTOMAYOR does not even attempt to link it to a specific textual provision. It should not be surprising that the two dissents have sharply different views on how to read the statute. That is the sort of thing that can happen when statutory analysis is so untethered from the text. an employer a chance to show that it did not break the state law certainly does not place the Arizona regime in conflict with federal law.
8 State law also prohibits “intentionally” employing an unauthorized alien, §23–212.01(A), a more severe violation of the law. The Chamber does not suggest that this prohibition is any more problematic than the prohibition on “knowingly” employing an unauthorized alien.
11 See Basic Pilot Extension Act of 2001, §2, 115 Stat. 2407; Basic Pilot Program Extension and Expansion Act of 2003, §2, 117 Stat. 1944; Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009, Div. A, §143, 122 Stat. 3580; Department of Homeland Security Appropriations Act of 2010, §547, 123 Stat. 2177.
BREYER, J., dissenting
SUPREME COURT OF THE UNITED STATES
CHAMBER OF COMMERCE OF THE UNITED STATES
OF AMERICA, ET AL., PETITIONERS v. MICHAEL
B. WHITING ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[May 26, 2011]
JUSTICE BREYER, with whom JUSTICE GINSBURG joins, dissenting.
The federal Immigration Reform and Control Act of 1986 (Act or IRCA) pre-empts “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.” 8 U. S. C. §1324a(h)(2). The state law before us, the Legal Arizona Workers Act, imposes civil sanctions upon those who employ unauthorized aliens. See Ariz. Rev. Stat. Ann. §23–211 et seq. (West Supp. 2010). Thus the state law falls within the federal Act’s general preemption rule and is pre-empted—unless it also falls within that rule’s exception for “licensing and similar laws.” Unlike the Court, I do not believe the state law falls within this exception, and I consequently would hold it pre-empted.
Arizona calls its state statute a “licensing law,” and the statute uses the word “licensing.” But the statute strays beyond the bounds of the federal licensing exception, for it defines “license” to include articles of incorporation and partnership certificates, indeed virtually every state-law authorization for any firm, corporation, or partnership to do business in the State. §23–211(9)(a); cf. §23–211(9)(c) (excepting professional licenses, and water and environmental permits). Congress did not intend its “licensing” language to create so broad an exemption, for doing so would permit States to eviscerate the federal Act’s preemption provision, indeed to subvert the Act itself, by undermining Congress’ efforts (1) to protect lawful workers from national-origin-based discrimination and (2) to protect lawful employers against erroneous prosecution or punishment.
Dictionary definitions of the word “licensing” are, as the majority points out, broad enough to include virtually any permission that the State chooses to call a “license.” See ante, at 10 (relying on a dictionary and the federal Administrative Procedure Act). But neither dictionary definitions nor the use of the word “license” in an unrelated statute can demonstrate what scope Congress intended the word “licensing” to have as it used that word in this federal statute. Instead, statutory context must ultimately determine the word’s coverage. Context tells a driver that he cannot produce a partnership certificate when a policeman stops the car and asks for a license. Context tells all of us that “licensing” as used in the Act does not include marriage licenses or the licensing of domestic animals. And context, which includes statutory purposes, language, and history, tells us that the federal statute’s “licensing” language does not embrace Arizona’s overly broad definition of that term. That is to say, ordinary corporate charters, certificates of partnership, and the like do not fall within the scope of the word “licensing” as used in this federal exception. See Dolan v. Postal Service, 546 U. S. 481, 486 (2006) (statutory interpretation requires courts to “rea[d] the whole statutory text, conside[r] the purpose and context of the statute, and consul[t] any precedents or authorities that inform the analysis”); United States v. Heirs of Boisdoré, 8 How. 113, 122 (1849) (similar).I
To understand how the majority’s interpretation of the word “licensing” subverts the Act, one must understand the basic purposes of the pre-emption provision and of the Act itself. Ordinarily, an express pre-emption provision in a federal statute indicates a particular congressional interest in preventing States from enacting laws that might interfere with Congress’ statutory objectives. See International Paper Co. v. Ouellette, 479 U. S. 481, 494 (1987). The majority’s reading of the provision’s “licensing” exception, however, does the opposite. It facilitates the creation of “ ‘obstacle[s] to the accomplishment and execution of the full purposes and objectives of Congress.’ ” Crosby v. National Foreign Trade Council, 530 U. S. 363, 373 (2000) (quoting Hines v. Davidowitz, 312 U. S. 52, 67 (1941)).
Essentially, the federal Act requires employers to verify the work eligibility of their employees. And in doing so, the Act balances three competing goals. First, it seeks to discourage American employers from hiring aliens not authorized to work in the United States. H. R. Rep. No. 99–682, pt. 1, p. 56 (1986).
Second, Congress wished to avoid “placing an undue burden on employers,” id., at 90, and the Act seeks to prevent the “harassment” of “innocent employers,” S. Rep. No. 99–132, p. 35 (1985).
Third, the Act seeks to prevent employers from disfavoring job applicants who appear foreign. Reiterating longstanding antidiscrimination concerns, the House Committee Report explained: “Numerous witnesses . . . have expressed their deep concern that the imposition of employer sanctions will cause extensive employment discrimination against Hispanic-Americans and other minority group members. These witnesses are genuinely concerned that employers, faced with the possibility of civil and criminal penalties, will be extremely reluctant to hire persons because of their linguistic or physical characteristics.” H. R. Rep. No. 99–682, at 68. See also 42 U. S. C. §2000e–2(a)(1) (making it an “unlawful employment practice” for an employer to discriminate against an individual “because of such individual’s race, color, religion, sex, or national origin”); U. S. Commission on Civil Rights, The Tarnished Golden Door: Civil Rights Issues in Immigration 74 (1980) (finding that “increased employment discrimination against United States citizens and legal residents who are racially and culturally identifiable with major immigrant groups could be the unintended result of an employer sanctions law”). The Committee concluded that “every effort must be taken to minimize the potentiality of discrimination.” H. R. Rep. No. 99–682, at 68.
The Act reconciles these competing objectives in several ways:
First, the Act prohibits employers from hiring an alien knowing that the alien is unauthorized to work in the United States. 8 U. S. C. §1324a(a)(1)(A).
Second, the Act provides an easy-to-use mechanism that will allow employers to determine legality: the I–9 form. In completing an I–9 form, the employer certifies that he or she has examined one or two documents (e.g., a passport, or a driver’s license along with a Social Security card) that tend to confirm the worker’s identity and employability. §1324a(b)(1). Completion of the form in good faith immunizes the employer from liability, even if the worker turns out to be unauthorized. §§1324a(a)(3), 1324a(b)(6).
A later amendment to the law also allows an employer to verify an employee’s work eligibility through an Internet-based federal system called E-Verify. If the employer does so, he or she will receive the benefit of a rebuttable presumption of compliance. Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), §402(b), 110 Stat. 3009–656 to 3009–657, note following 8 U. S. C. §1324a, p. 331 (Pilot Programs for Employment Eligibility Confirmation).
Third, the Act creates a central enforcement mechanism. The Act directs the Attorney General to establish a single set of procedures for receiving complaints, investigating those complaints that “have a substantial probability of validity,” and prosecuting violations. 8 U. S. C. §1324a(e)(1). The relevant immigration officials and administrative law judges have the power to access necessary evidence and witnesses, §1324a(e)(2), and the employer has the right to seek discovery from the Federal Government, 28 CFR §68.18 (2010). The employer also has the right to administrative and judicial review of the administrative law judge’s decision. §§68.54, 68.56.
Fourth, the Act makes it “an unfair immigration-related employment practice . . . to discriminate against any individual” in respect to employment “because of such individual’s national origin.” 8 U. S. C. §1324b(a).
Fifth, the Act sets forth a carefully calibrated sanction system. The penalties for hiring unauthorized aliens are graduated to prevent the Act from unduly burdening employers who are not serious offenders. As adjusted for inflation, civil penalties for a first violation of the employment restrictions range from $375–$3,200 per worker, and rise to $3,200–$16,000 per worker for repeat offenders. §1324a(e)(4)(A); 73 Fed. Reg. 10133 (2008); see also §1324a(f) (imposing criminal fines of not more than $3,000 per worker and imprisonment for up to six months for “pattern or practice” violators of employment restrictions).
As importantly, the Act limits or removes any incentive to discriminate on the basis of national origin by setting antidiscrimination fines at equivalent levels: $375–$3,200 per worker for first-time offenders, and $3,200–$16,000 per worker for repeat offenders. §1324b(g)(2)(B)(iv); 73 Fed. Reg. 10134. The Act then ties its unlawful employment and antidiscrimination provisions together by providing that, should the antihiring provisions terminate, the antidiscrimination provisions will also terminate, §1324b(k), “the justification for them having been removed,” H. R. Conf. Rep. No. 99–1000, p. 87 (1986).
Now, compare and contrast Arizona’s statute. As I have said, that statute applies to virtually all business-related licenses, other than professional licenses. Ariz. Rev. Stat. Ann. §23–211(9). Like the federal Act, the state law forbids the employment of unauthorized aliens. §§23–212(A), 23–212.01(A). It also provides employers with somewhat similar defenses. §§23–212(I)–(J), 23–212.01(I)–(J). But thereafter the state and federal laws part company.
First, the state statute seriously threatens the federal Act’s antidiscriminatory objectives by radically skewing the relevant penalties. For example, in the absence of the Arizona statute, an Arizona employer who intentionally hires an unauthorized alien for the second time would risk a maximum penalty of $6,500. 8 U. S. C. §1324a(e)(4) (A)(ii); 73 Fed. Reg. 10133. But the Arizona statute subjects that same employer (in respect to the same two incidents) to mandatory, permanent loss of the right to do business in Arizona–a penalty that Arizona’s Governor has called the “business death penalty.” Ariz. Rev. Stat. Ann. §23–212.01(F)(2); News Release, Governor Signs Employer Sanctions Bill (2007), App. 399. At the same time, the state law leaves the other side of the punishment balance—the antidiscrimination side—unchanged.
This is no idle concern. Despite the federal Act’s efforts to prevent discriminatory practices, there is evidence that four years after it had become law, discrimination was a serious problem. In 1990, the General Accounting Office identified “widespread discrimination . . . as a result of ” the Act. Report to the Congress, Immigration Reform: Employer Sanctions and the Question of Discrimination 3, 37, 80. Sixteen percent of employers in Los Angeles admitted that they applied the I–9 requirement “only to foreign-looking or foreign-sounding persons,” and 22 percent of Texas employers reported that they “began a practice to (1) hire only persons born in the United States or (2) not hire persons with temporary work eligibility documents” because of the Act. Id., at 41–43. If even the federal Act (with its carefully balanced penalties) can result in some employers discriminating, how will employers behave when erring on the side of discrimination leads only to relatively small fines, while erring on the side of hiring unauthorized workers leads to the “business death penalty”?
Second, Arizona’s law subjects lawful employers to increased burdens and risks of erroneous prosecution. In addition to the Arizona law’s severely burdensome sanctions, the law’s procedures create enforcement risks not present in the federal system. The federal Act creates one centralized enforcement scheme, run by officials versed in immigration law and with access to the relevant federal documents. The upshot is an increased likelihood that federal officials (or the employer) will discover whether adverse information flows from an error-prone source and that they will proceed accordingly, thereby diminishing the likelihood that burdensome proceedings and liability reflect documentary mistakes.
Contrast the enforcement system that Arizona’s statute creates. Any citizen of the State can complain (anonymously or otherwise) to the state attorney general (or any county attorney), who then “shall investigate,” Ariz. Rev. Stat. Ann. §23–212(B) (emphasis added), and, upon a determination that that the “complaint is not false and frivolous . . . shall notify the appropriate county attorney to bring an action,” §23–212(C)(3). This mandatory language, the lower standard (“not frivolous” instead of “substantial”), and the removal of immigration officials from the state screening process (substituting numerous, elected county attorneys) increase the likelihood that suspicious circumstances will lead to prosecutions and liability of employers—even where more careful investigation would have revealed that there was no violation.
Again, this matter is far from trivial. Studies of one important source of Government information—the EVerify system—describe how the federal administrative process corrected that system’s tentative “unemployable” indications 18% of the time. This substantial error rate is not a function of a small sample size. See ante, at 26, n. 12. Rather, data from one fiscal year showed 46,921 workers initially rejected but later “confirmed as work authorized”—all while E-Verify was used by only a fraction of the Nation’s employers. U. S. Citizenship and Immigration Services, Statistics and Reports, http:// www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9a c89243c6a7543f6d1a / ?vgnextchannel=7c579589cdb76210V gnVCM100000b92ca60aRCRD (Feb. 4, 2011) (as visited May 18, 2011, and available in Clerk of Court’s case file). That is to say nearly one-in-five times that the E-Verify system suggested that an individual was not lawfully employable (i.e., returned a tentative nonconfirmation of work authorization), the system was wrong; and subsequent review in the federal administrative process determined as much. (And those wrongly identified were likely to be persons of foreign, rather than domestic, origin, by a ratio of approximately 20 to 1.) See Westat, Findings of the E-Verify Program Evaluation xxxi, 210, 246 (Dec. 2009) (assessing data from April to June 2008). E-Verify’s accuracy rate is even worse “in states that require the use of E-Verify for all or some of their employees.” Id., at 122.
A related provision of the state law aggravates the risk of erroneous prosecutions. The state statute says that in “determining whether an employee is an unauthorized alien, the court shall consider only the federal government’s determination pursuant to 8 [U. S. C.] §1373(c).” Ariz. Rev. Stat. Ann. §23–212(H). But the federal provision to which the state law refers, 8 U. S. C. §1373(c), says only that the Federal Government, upon a State’s request, shall verify a person’s “citizenship or immigration status.” It says nothing about work authorization. See post, at 7– 10 (SOTOMAYOR, J., dissenting). It says nothing about the source of the Federal Government’s information. It imposes no duty upon the Federal Government or anyone else to investigate the validity of that information, which may falsely implicate an employer 18% of the time.
So what is the employer to do? What statute gives an employer whom the State proceeds against in state court the right to conduct discovery against the Federal Government? The Arizona statute, like the federal statute, says that the employer’s use of an I–9 form provides a defense. But there is a hitch. The federal Act says that neither the I–9 form, nor “any information contained in or appended to” the form, “may . . . be used for purposes other than for enforcement of this” federal Act. §1324a(b)(5). So how can the employer present a defense, say, that the Government’s information base is flawed? The majority takes the view that the forms are not neces sary to receive the benefit of the affirmative defense. Ante, at 18, n. 9. But the I–9 form would surely be the employer’s most effective evidence. See also post, at 11 (SOTOMAYOR, J., dissenting) (suggesting that the unavailability of I–9 forms to defend against state-court charges means that Congress “intended no such” proceedings).
Nor does the Arizona statute facilitate the presentation of a defense when it immediately follows (1) its statement that “the court shall consider only the federal government’s determination” when it considers “whether an employee is an unauthorized alien” with (2) its statement that “[t]he federal government’s determination creates a rebuttable presumption of the employee’s lawful status.” Ariz. Rev. Stat. Ann. §23–212(H) (emphasis added). The two statements sound as if they mean that a Federal Government determination that the worker is unlawful is conclusive against the employer, but its determination that the worker’s employment is lawful is subject to rebuttal by the State. Arizona tells us that the statute means the opposite. See ante, at 16, n. 7. But the legal briefs of Arizona’s attorney general do not bind the state courts. And until the matter is cleared up, employers, despite I–9 checks, despite efforts to use E-Verify, will hesitate to hire those they fear will turn out to lack the right to work in the United States.
And that is my basic point. Either directly or through the uncertainty that it creates, the Arizona statute will impose additional burdens upon lawful employers and consequently lead those employers to erect ever stronger safeguards against the hiring of unauthorized aliens— without counterbalancing protection against unlawful discrimination. And by defining “licensing” so broadly, by bringing nearly all businesses within its scope, Arizona’s statute creates these effects statewide.
Why would Congress, after deliberately limiting ordinary penalties to the range of a few thousand dollars per illegal worker, want to permit far more drastic state penalties that would directly and mandatorily destroy entire businesses? Why would Congress, after carefully balancing sanctions to avoid encouraging discrimination, want to allow States to destroy that balance? Why would Congress, after creating detailed procedural protections for employers, want to allow States to undermine them? Why would Congress want to write into an express pre-emption provision—a provision designed to prevent States from undercutting federal statutory objectives—an exception that could so easily destabilize its efforts? The answer to these questions is that Congress would not have wanted to do any of these things. And that fact indicates that the majority’s reading of the licensing exception—a reading that would allow what Congress sought to forbid—is wrong.
The federal licensing exception cannot apply to a state statute that, like Arizona’s statute, seeks to bring virtually all articles of incorporation and partnership certificates within its scope. I would find the scope of the exception to federal pre-emption to be far more limited. Context, purpose, and history make clear that the “licensing and similar laws” at issue involve employment-related licensing systems.
The issuance of articles of incorporation and partnership certificates and the like have long had little or nothing to do with hiring or “employment.” Indeed, Arizona provides no evidence that any State, at the time the federal Act was enacted, had refused to grant or had revoked, say, partnership certificates, in light of the partners’ hiring practices of any kind, much less the hiring of unauthorized aliens. See Ariz. Rev. Stat. Ann. §29–308 (limited partnership formed upon the filing of a certificate of partnership providing names and addresses); §29–345 (providing for dissolution of a limited partnership “[o]n application by or for a partner or assignee . . . whenever it is not reasonably practicable to carry on the business in conformity with the partnership agreement”).
To read the exception as covering laws governing corporate charters and partnership certificates (which are not usually called “licensing” laws) is to permit States to turn virtually every permission-related state law into an employment-related “licensing” law. The State need only call the permission a “license” and revoke the license should its holder hire an unauthorized alien. If what was not previously an employment-related licensing law can become one simply by using it as a sanction for hiring unauthorized aliens or simply by state definition, indeed, if the State can call a corporate charter an employment-related licensing law, then why not an auto licensing law (amended to revoke the driver’s licenses of those who hire unauthorized aliens)? Why not a dog licensing law? Or why not “impute” a newly required license to conduct any business to every human being in the State, withdrawing that license should that individual hire an unauthorized alien? See S. C. Code Ann. §41–8–20 (Supp. 2010) (providing that “[a]ll private employers in South Carolina . . . shall be imputed a South Carolina employment license, which permits a private employer to employ a person in this State,” but conditioning the license on the company’s not hiring unauthorized aliens).
Such laws might prove more effective in stopping the hiring of unauthorized aliens. But they are unlikely to do so consistent with Congress’ other critically important goals, in particular, Congress’ efforts to protect from discrimination legal workers who look or sound foreign. That is why we should read the federal exemption’s “licensing” laws as limited to those that involve the kind of licensing that, in the absence of this general state statute, would nonetheless have some significant relation to employment or hiring practices. Otherwise we read the federal “licensing” exception as authorizing a State to undermine, if not to swallow up, the federal pre-emption rule.
I would therefore read the words “licensing and similar laws” as covering state licensing systems applicable primarily to the licensing of firms in the business of recruiting or referring workers for employment, such as the state agricultural labor contractor licensing schemes in existence when the federal Act was created. This reading is consistent with the provision’s history and language, and it minimizes the risk of harm of the kind just described.
The Act’s history supports this interpretation. Ever since 1964, the Federal Government has administered statutes that create a federal licensing scheme for agricultural labor contractors, firms that specialize in recruiting agricultural workers and referring them to farmers for a fee. Farm Labor Contractor Registration Act of 1963 (FLCRA), 78 Stat. 920; Migrant and Seasonal Agricultural Worker Protection Act (AWPA), 96 Stat. 2583. The statutes require agricultural labor contractors to register with the federal Secretary of Labor, to obtain a registration certificate (in effect a license), and to require the contractor’s employees to carry that certificate with them when engaging in agricultural labor contracting activities. AWPA §101; FLCRA §4. The statutes list a host of forbidden activities, one of which (prior to 1986) was hiring unauthorized aliens. See AWPA §§103, 106; FLCRA §5(b). Prior to 1986, if the federal Labor Department believed a firm had violated these substantive provisions, it could institute administrative proceedings within the Labor Department. And if the Secretary found the labor contracting firm had violated the provisions, the Secretary could impose monetary penalties or withdraw the firm’s registration. AWPA §§103, 503; FLCRA §§5(b), 9.
Most important, and unlike the 1986 Act before us, the earlier agricultural labor contracting statutes did not pre empt similar state laws. To the contrary, the earlier Acts were “intended to supplement State law” and did not “excuse any person from compliance with appropriate State law and regulation.” AWPA §521; see FLCRA §12. By 1986, nearly a dozen States had developed state licensing systems for agricultural labor contractors, i.e., firms that recruited and referred farm (and sometimes forestry) workers for a fee; some of these laws provided that state licenses could be revoked if the contractors hired unauthorized aliens. See, e.g., Cal. Lab. Code §1690(f) (Deering Supp. 1991); 43 Pa. Cons. Stat. §§1301.503(4), 1301.505(3) (1965–1983 Supp. Pamphlet); Ore. Rev. Stat. §§658.405(1), 658.440(2)(d) (1987) (covering forestry workers).
In 1986, Congress (when enacting the Act now before us) focused directly upon the earlier federal agricultural labor contractor licensing system. And it changed that earlier system by including a series of conforming amendments in the Act. One amendment removes from the earlier statutes the specific prohibition against hiring unauthorized aliens. It thereby makes agricultural labor contractors subject to the Act’s similar general prohibition against such hiring. IRCA §101(b)(1)(C) (repealing AWPA §106). Another amendment takes from the Secretary of Labor most of the Secretary’s enforcement powers in respect to the hiring of unauthorized aliens. It thereby leaves agricultural labor contractors subject to the same single unified enforcement system that the immigration Act applies to all employers. See 29 U. S. C. §1853. A third amendment, however, leaves with the Secretary of Labor the power to withdraw the federal registration certificate from an agricultural labor contractor that hired unauthorized aliens. IRCA §101(b)(1)(B)(iii), 29 U. S. C. §1813(a)(6). Thus, the Act leaves this subset of employers (i.e., agricultural labor contractors but not other employers) subject to a federal licensing scheme.
So far, the conforming amendments make sense. But have they not omitted an important matter? Prior to 1986, States as well as the Federal Government could license agricultural labor contractors. Should the 1986 statute not say whether Congress intended that dual system to continue? The answer is that the 1986 Act does not omit this matter. It answers the coexistence question directly with the parenthetical phrase we are now considering, namely, the phrase, “other than through licensing and similar laws,” placed in the middle of the Act’s preemption provision. 8 U. S. C. §1324a(h)(2). That phrase refers to agricultural labor contractors, and it says that, in respect to those licensing schemes, dual state/federal licensing can continue.
As of 1986, there were strong reasons for permitting that dual system to continue in this specialized area. Dual enforcement had proved helpful in preventing particularly serious employment abuses. See, e.g., 128 Cong. Rec. 24090 (1982) (reflecting concerns that agricultural workers were “housed in hovels; . . . subjected to physical abuse and kept in virtual slavery”). And because the contractors’ business consists of providing labor forces, their hiring of authorized workers is closely related to their general fitness to do business. See S. Rep. No. 202, 88th Cong., 1st Sess., 1 (1963) (explaining that farm labor contractor registration laws are needed to prevent “irresponsible crew leaders” from “exploit[ing] . . . farmers”); Martin, Good Intentions Gone Awry: IRCA and U. S. Agriculture, 534 Annals Am. Acad. Pol. & Soc. Sci. 44, 49 (1994) (describing how farmers who relied on contractors risked losing their labor forces to immigration raids). Dual enforcement would not create a federal/state penalty disparity, for federal systems as well as state systems provide for license revocation. Experience had shown that dual enforcement had not created any serious conflict or other difficulty. And in light of the specialized nature and comparatively small set of businesses subject to dual enforcement, to permit licensing of that set of businesses would not seriously undermine the objectives of the Act or its pre-emption provision.
Thus, it is not surprising that the legislative history of the 1986 Act’s pre-emption provision says that the licensing exception is about the licensing of agricultural labor contractors. The House Report on the Act, referring to the licensing exception, states that the Committee did “not intend to preempt licensing or ‘fitness to do business laws,’ such as state farm labor contractor laws or forestry laws, which specifically require such licensee or contractor to refrain from hiring, recruiting or referring undocumented aliens.” H. R. Rep. No. 99–682, at 58 (emphasis added).
The Act’s language, while not requiring this interpretation, is nonetheless consistent with limiting the scope of the phrase in this way. Context can limit the application of the term “licensing” to particular types of licensing. The Act’s subject matter itself limits the term to employmentrelated licensing. And the Act’s specific reference to those who “recruit or refer for a fee for employment, unauthorized aliens,” is consistent with employment-related licensing that focuses primarily upon labor contracting businesses.
Thus, reading the phrase as limited in scope to laws licensing businesses that recruit or refer workers for employment is consistent with the statute’s language, with the relevant history, and with other statutory provisions in the Act. That reading prevents state law from undermining the Act and from turning the pre-emption clause on its head. That is why I consider it the better reading of the statute.
Another section of the Arizona statute requires “every employer, after hiring an employee,” to “verify the employment eligibility of the employee” through the Federal Government’s E-Verify program. Ariz. Rev. Stat. Ann. §23–214. This state provision makes participation in the federal E-Verify system mandatory for virtually all Arizona employers. The federal law governing the E-Verify program, however, creates a program that is voluntary. By making mandatory that which federal law seeks to make voluntary, the state provision stands as a significant “ ‘obstacle to the accomplishment and execution of the full purposes and objectives of Congress,’ ” Crosby, 530 U. S., at 373 (quoting Hines, 312 U. S., at 67). And it is consequently pre-empted.
The federal statute itself makes clear that participation in the E-Verify program is voluntary. The statute’s relevant section bears the title “Voluntary Election to Participate in a Pilot Program.” IIRIRA §402, note following 8 U. S. C. §1324a, p. 331. A subsection bears the further title, “Voluntary Election.” §402(a). And within that subsection, the statute says that employers “may elect to participate.” (Emphasis added.) The statute elsewhere requires the Secretary of Homeland Security to “widely publicize . . . the voluntary nature” of the program. §402(d)(2); see also §402(d)(3)(A) (requiring the designation of local officials to advertise the “voluntary nature” of the program). It adds that employers may “terminate” their “election” to participate by following certain procedures. §402(c)(3). And it tells the Secretary of Homeland Security (as an earlier version told the Attorney General) that she “may not require any person or other entity to participate.” §402(a); see also §402(e) (creating exceptions, none of which is applicable here, that require federal employers and certain others to participate in E-Verify or another pilot program).
Congress had strong reasons for insisting on the voluntary nature of the program. E-Verify was conceived as, and remains, a pilot program. Its database consists of tens of millions of Social Security and immigration records kept by the Federal Government. These records are prone to error. See, e.g., Office of the Inspector General, Social Security Administration, Congressional Response Report: Accuracy of the Social Security Administration’s Numident File 12 (2006) (hereinafter Social Security Report) (estimating that 3.3 million naturalized citizens are misclassified in a Social Security database used by E-Verify); GAO, Employment Verification: Federal Agencies Have Taken Steps to Improve E-Verify, but Significant Challenges Remain 16 (GAO–11–146, 2010) (hereinafter GAO Report) (noting that “erroneous [nonconfirmations] related to name inconsistencies . . . remain an issue” that “can create the appearance of discrimination because of their disparate impact on certain cultural groups”). And making the program mandatory would have been hugely expensive. See post, at 16 (SOTOMAYOR, J., dissenting).
The E-Verify program is still a pilot program, as a matter of statute and practice. See IIRIRA §401; Letter from H. Couch to R. Stana (Dec. 8, 2010) (discussing aspects of E-Verify that have yet to be implemented). The effects of the program’s efforts to take account of, and correct for, potential errors remain uncertain. Congress could decide that, based on the results of the pilot, E-Verify should become a mandatory program. But it has not yet made that determination. And in making that decision, it will have to face a number of questions: Will workers receiving tentative negative verdicts understand the possibility of administrative challenge? Will they make the effort to invoke that process, say traveling from a farm to an urban Social Security office? Will employers prove willing to undergo the financial burden of supporting a worker who might lose the challenge? Will employers hesitate to train those workers during the time they bring their challenges? Will employers simply hesitate to hire workers who might receive an initial negative verdict—more likely those who look or sound foreign? Or will they find ways to dismiss those workers? These and other unanswered questions convinced Congress to make E-Verify a pilot program, to commission continuous study and evaluation, and to insist that participation be voluntary.
In co-opting a federal program and changing the key terms under which Congress created that program, Arizona’s mandatory state law simply ignores both the federal language and the reasoning it reflects, thereby posing an “ ‘obstacle to the accomplishment’ ” of the objectives Congress’ statute evinces. Crosby, supra, at 373 (quoting Hines, supra, at 67).
The majority reaches a contrary conclusion by pointing out (1) that Congress has renewed the E-Verify program several times, each time expanding its coverage, to the point where it now encompasses all 50 States; (2) that the E-Verify database has become more accurate; (3) that the Executive Branch has itself mandated participation for federal contractors; and (4) that the statute’s language tells the Secretary of Homeland Security, not the States, to maintain the program as voluntary.
The short, and, I believe, conclusive answers to these objections are: (1) Congress has kept the language of the statute—and the voluntary nature of the program—the same throughout its program renewals. See 115 Stat. 2407; 117 Stat. 1944; §547, 123 Stat. 2177. And it is up to Congress, not to Arizona or this Court, to decide when participation in the program should cease to be voluntary.
(2) The studies and reports have repeatedly found both (a) that the E-Verify program had achieved greater accuracy, but (b) that problems remain. See, e.g., Social Security Report 11 (estimating that Social Security records contain 4.8 million “discrepancies that could require the numberholder to visit [the Social Security Administration] . . . before employment eligibility would be confirmed”); GAO Report 19 (estimating that, if E-Verify were made mandatory nationwide, 164,000 newly hired workers each year would erroneously be adjudged ineligible to work because of name mismatches, as when the worker’s “first or last name is incorrectly spelled in government databases or on identification documents”). And it is up to Congress, not to Arizona or this Court, to determine when the federally designed and federally run E-Verify program is ready for expansion.
(3) Federal contractors are a special group of employers, subject to many special requirements, who enter voluntarily into a special relation with the Government. For the Federal Government to mandate that a special group participate in the E-Verify program tells us little or nothing about the effects of a State’s mandating that nearly every employer within the State participate—as Arizona has done. And insofar as we have not determined whether the Executive was authorized by Congress to mandate EVerify for federal contractors, it says nothing about Congress’ intent.
(4) There is no reason to imply negatively from language telling the Secretary not to make the program mandatory, permission for the States to do so. There is no presumption that a State may modify the operation of a uniquely federal program like E-Verify. Cf. Buckman Co. v. Plain tiffs’ Legal Comm., 531 U. S. 341, 347–348 (2001); Boyle v. United Technologies Corp., 487 U. S. 500, 504–505 (1988); see also post, at 15–16 (SOTOMAYOR, J., dissenting). The remaining federal statutory language makes clear the voluntary nature of the E-Verify program. Arizona’s plan would undermine that federal objective.
For these reasons I would hold that the federal Act, including its E-Verify provisions, pre-empts Arizona’s state law. With respect, I dissent from the majority’s contrary holdings.
SOTOMAYOR, J., dissenting
SUPREME COURT OF THE UNITED STATES
CHAMBER OF COMMERCE OF THE UNITED STATES
OF AMERICA, ET AL., PETITIONERS v. MICHAEL
B. WHITING ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[May 26, 2011]
JUSTICE SOTOMAYOR, dissenting.
In enacting the Immigration Reform and Control Act of 1986 (IRCA), 100 Stat. 3359, Congress created a “com prehensive scheme prohibiting the employment of illegal aliens in the United States.” Hoffman Plastic Compounds, Inc. v. NLRB, 535 U. S. 137, 147 (2002). The Court reads IRCA’s saving clause—which preserves from pre-emption state “licensing and similar laws,” 8 U. S. C. §1324a(h)(2)—to permit States to determine for them selves whether someone has employed an unauthorized alien so long as they do so in conjunction with licensing sanctions. This reading of the saving clause cannot be reconciled with the rest of IRCA’s comprehensive scheme. Having constructed a federal mechanism for determining whether someone has knowingly employed an unauthor ized alien, and having withheld from the States the infor mation necessary to make that determination, Congress could not plausibly have intended for the saving clause to operate in the way the majority reads it to do. When viewed in context, the saving clause can only be under stood to preserve States’ authority to impose licensing sanctions after a final federal determination that a person has violated IRCA by knowingly employing an unauthor ized alien. Because the Legal Arizona Workers Act in stead creates a separate state mechanism for Arizona state courts to determine whether a person has employed an unauthorized alien, I would hold that it falls outside the saving clause and is pre-empted.
I would also hold that federal law pre-empts the provi sion of the Arizona Act making mandatory the use of E-Verify, the federal electronic verification system. By requiring Arizona employers to use E-Verify, Arizona has effectively made a decision for Congress regarding use of a federal resource, in contravention of the significant policy objectives motivating Congress’ decision to make partici pation in the E-Verify program voluntary.
I begin with the plain text of IRCA’s pre-emption clause. IRCA expressly pre-empts States from “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.”1 Ibid. The Arizona Act, all agree, imposes civil sanctions upon those who employ unauthorized aliens. The Act thus escapes express pre-emption only if it falls within IRCA’s paren thetical saving clause for “licensing and similar laws.” Ibid.
The saving clause is hardly a paragon of textual clarity. IRCA does not define “licensing,” nor does it use the word “licensing” in any other provision. Laws that impose sanctions by means of licensing exist in many forms. Some permit authorities to take action with respect to licenses upon finding that a licensee has engaged in pro hibited conduct. See, e.g., Ariz. Rev. Stat. Ann. §4– 210(A)(1) (West 2011) (liquor licenses may be suspended or revoked if the licensing authority determines after notice and a hearing that repeated acts of violence have occurred on the licensed premises). Others, more nar rowly, permit authorities to take such action following a pre-existing determination by another authorized body that the licensee has violated another provision of law. See, e.g., §4–202(D) (liquor licenses may not be renewed to persons who have been convicted of felonies within the past five years). That both types of laws might be defined in some contexts as licensing laws does not necessarily mean that Congress intended the saving clause to encom pass both types. See Dolan v. Postal Service, 546 U. S. 481, 486 (2006) (“A word in a statute may or may not extend to the outer limits of its definitional possibilities”); see also FCC v. AT&T Inc., 562 U. S. ___, ___ (2011) (slip op., at 9) (“[C]onstruing statutory language is not merely an exercise in ascertaining the outer limits of [a word’s] definitional possibilities” (internal quotation marks omit ted; second alteration in original)). In isolation, the text of IRCA’s saving clause provides no hint as to which type or types of licensing laws Congress had in mind.
Because the plain text of the saving clause does not resolve the question, it is necessary to look to the text of IRCA as a whole to illuminate Congress’ intent. See Dolan, 546 U. S., at 486 (“Interpretation of a word or phrase depends upon reading the whole statutory text, considering the purpose and context of the statute”); Ali v. Federal Bureau of Prisons, 552 U. S. 214, 222 (2008) (con struction of a statutory term “must, to the extent possible, ensure that the statutory scheme is coherent and consis tent”); Davis v. Michigan Dept. of Treasury, 489 U. S. 803, 809 (1989) (“[St]tatutory language cannot be construed in a vacuum. It is a fundamental canon of statutory con struction that the words of a statute must be read in their context and with a view to their place in the overall statu tory scheme”).2
Before Congress enacted IRCA in 1986, a number of States had enacted legislation prohibiting employment of unauthorized aliens. See ante, at 2, and n. 1 (citing 12 such laws). California, for example, prohibited the know ing employment of an alien “who is not entitled to lawful residence in the United States” when “such employment would have an adverse effect on lawful resident workers,” and made violations punishable by fines of $200 to $500. 1971 Cal. Stats. ch. 1442, §1; see also De Canas v. Bica, 424 U. S. 351, 352, n. 1 (1976). Kansas went even further, making it a misdemeanor, punishable by a term of con finement not to exceed one month, to employ a person within Kansas knowing “such person to be illegally within the territory of the United States.” Kan. Stat. Ann. §§21– 4409, 21–4502 (1981).3
Congress enacted IRCA amidst this patchwork of state laws. IRCA “ ‘forcefully’ made combating the employment of illegal aliens central to ‘the policy of immigration law.’ ” Hoffman, 535 U. S., at 147 (quoting INS v. National Center for Immigrants’ Rights, Inc., 502 U. S. 183, 194, and n. 8 (1991); brackets omitted); see also H. R. Rep. No. 99– 682, pt. 1, p. 46 (1986) (hereinafter H. R. Rep. No. 99–682) (“[L]egislation containing employer sanctions is the most humane, credible and effective way to respond to the large-scale influx of undocumented aliens”). As the major ity explains, IRCA makes it “unlawful for a person or other entity to hire, or to recruit or refer for a fee, for employment in the United States an alien knowing the alien is an unauthorized alien.” §1324a(a)(1)(A); ante, at 3. IRCA also requires employers to verify that they have reviewed documents establishing an employee’s eligibility for employment. See §1324a(b); ante, at 3–4. These two provisions are the foundation of IRCA’s “comprehensive scheme prohibiting the employment of illegal aliens in the United States.” Hoffman, 535 U. S., at 147.
Congress made explicit its intent that IRCA be enforced uniformly. IRCA declares that “[i]t is the sense of the Congress that . . . the immigration laws of the United States should be enforced vigorously and uniformly.” §115, 100 Stat. 3384 (emphasis added). Congress struc tured IRCA’s provisions in a number of ways to accom plish this goal of uniform enforcement.
First, and most obviously, Congress expressly displaced the myriad state laws that imposed civil and criminal sanctions on employers who hired unauthorized aliens. See §1324a(h)(2); see also H. R. Rep. No. 99–682, at 58 (“The penalties contained in this legislation are intended to specifically preempt any state or local laws providing civil fines and/or criminal sanctions on the hiring, re cruitment or referral of undocumented aliens”). Congress could not have made its intent to pre-empt state and local laws imposing civil or criminal sanctions any more “ ‘clear [or] manifest.’ ” Medtronic, Inc. v. Lohr, 518 U. S. 470, 485 (1996) (quoting Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947)).
Second, Congress centralized in the Federal Govern ment enforcement of IRCA’s prohibition on the knowing employment of unauthorized aliens. IRCA instructs the Attorney General to designate a specialized federal agency unit whose “primary duty” will be to prosecute violations of IRCA. §1324a(e)(1)(D). IRCA also instructs the Attor ney General to establish procedures for receiving com plaints, investigating complaints having “a substantial probability of validity,” and investigating other violations. §1324a(e)(1); see also 8 CFR §274a.9 (2010). Upon con cluding that a person has violated IRCA, the Attorney General must provide the person with notice and an op portunity for a hearing before a federal administrative law judge (ALJ). 8 U. S. C. §§1324a(e)(3)(A), (B). If the person does not request a hearing, the Attorney General may impose a final, nonappealable order requiring payment of sanctions. §1324a(e)(3)(B). If the person requests a hear ing, the ALJ is required to hold a hearing and, upon find ing that the person has violated IRCA, must order the payment of sanctions. §1324a(e)(3)(C). The ALJ’s order is the final agency order, unless the affected person requests and obtains further administrative appellate review. §1324a(e)(7); see also 28 CFR §68.54 (2010). IRCA grants immigration officers and ALJs “reasonable access to examine evidence of any person or entity being investi gated” and provides them with extensive subpoena powers. §1324a(e)(2). And the immigration officers investigating suspected violations obviously have access to the relevant federal information concerning the work authorization status of the employee in question.4
Third, Congress provided persons “adversely affected” by an agency order with a right of review in the federal courts of appeals. §1324a(e)(8); see also §1324a(e)(9) (directing the Attorney General in cases of noncompliance to file suit in federal district court to enforce a final order imposing sanctions); §1324a(f) (authorizing the Attorney General to pursue injunctive relief and criminal sanctions in federal district court). In this way, Congress ensured that administrative orders finding violations of IRCA would be reviewed by federal judges with experience adjudicating immigration-related matters.
Fourth, Congress created a uniquely federal system by which employers must verify the work authorization status of new hires. Under this system, an employer must attest under penalty of perjury on a form designated by the Attorney General (the I–9 form) that it has examined enumerated identification documents to verify that a new hire is not an unauthorized alien. §1324a(b)(1)(A); see also 8 CFR §274a.2; ante, at 3–4. Good-faith compliance with this verification requirement entitles an employer to an affirmative defense if charged with violating IRCA. §1324a(a)(3); see also H. R. Rep. No. 99–682, at 57. Nota bly, however, IRCA prohibits use of the I–9 form for any purpose other than enforcement of IRCA and various provisions of federal criminal law. §1324a(b)(5); 8 CFR §274a.2(b)(4). Use of the I–9 form is thus limited to federal proceedings, as the majority acknowledges. See ante, at 18, n. 9.
Finally, Congress created no mechanism for States to access information regarding an alien’s work authoriza tion status for purposes of enforcing state prohibitions on the employment of unauthorized aliens. The relevant sections of IRCA make no provision for the sharing of work authorization information between federal and state authorities even though access to that information would be critical to a State’s ability to determine whether an employer has employed an unauthorized alien. In stark contrast, a separate provision in the same title of IRCA creates a verification system by which States can ascer tain the immigration status of aliens applying for benefits under programs such as Medicaid and the food stamp program. See IRCA §121(a)(1)(C), 42 U. S. C. §1320b– 7(d)(3). The existence of a verification system in one provision of IRCA, coupled with its absence in the provi sion governing employment of unauthorized aliens, sug gests strongly that Congress did not contemplate any role for the States in adjudicating questions regarding em ployment of unauthorized aliens. Cf. Bates v. United States, 522 U. S. 23, 29–30 (1997) (“Where Congress in cludes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion” (internal quotation marks and brackets omitted)).
In an attempt to show that Congress intended for the Federal Government to share immigration-related in formation with the States, Arizona points to a federal statute, 8 U. S. C. §1373(c), requiring the Government to respond to certain inquiries from state agencies. Section 1373(c), however, merely requires the Government to respond to inquiries from state agencies “seeking to verify or ascertain the citizenship or immigration status of any individual within the jurisdiction of the agency.” It does not require the provision of information regarding an alien’s work authorization status, which is not necessarily synonymous with immigration status. See 8 CFR §274a.12(c) (identifying categories of legal aliens “who must apply for employment authorization”).5 Arizona has not identified any federal statute or regulation requiring the Federal Government to provide information regarding an alien’s work authorization status to a State.6 More importantly, §1373(c) was enacted in 1996, see §642(c), 110 Stat. 3009–707, and thus says nothing about Con gress’ intent when it enacted IRCA’s saving clause a dec ade earlier. See Jones v. United States, 526 U. S. 227, 238 (1999).
Collectively, these provisions demonstrate Congress’ intent to build a centralized, exclusively federal scheme for determining whether a person has “employ[ed], or recruit[ed] or refer[red] for a fee for employment, unau thorized aliens.” 8 U. S. C. §1324a(h)(2).
IRCA’s saving clause must be construed against this backdrop. Focusing primarily on the text of the saving clause, Arizona and the majority read the clause to permit States to determine themselves whether a person has employed an unauthorized alien, so long as they do so in connection with licensing sanctions. See ante, at 12–13. This interpretation overlooks the broader statutory con text and renders the statutory scheme “[in]coherent and [in]consistent.” Ali, 552 U. S., at 222.
Under the majority’s reading of the saving clause, state prosecutors decide whether to commence licensing-related proceedings against a person suspected of employing an unauthorized alien. The majority’s holding also permits state courts and other tribunals to adjudicate the question whether an employer has employed an unauthorized alien. The Arizona Act illustrates the problems with reading the saving clause to permit such state action. The Act directs prosecutors to verify an employee’s work authorization with the Federal Government pursuant to §1373(c), e.g., Ariz. Rev. Stat. Ann. §23–212(B) (West Supp. 2010), and the state court “shall consider only the federal govern ment’s determination pursuant to [§]1373(c)” in “determin ing whether an employee is an unauthorized alien,” e.g., §23–212(H).7 Putting aside the question whether §1373(c) actually provides access to work authorization informa tion, §1373(c) did not exist when IRCA was enacted in 1986. See supra, at 9. Arizona has not identified any avenue by which States could have accessed work authori zation information in the first decade of IRCA’s existence. The absence of any such avenue at the time of IRCA’s enactment speaks volumes as to how Congress would have understood the saving clause to operate: If States had no access to information regarding the work authorization status of aliens, how could state courts have accurately adjudicated the question whether an employer had em ployed an unauthorized alien?
The Arizona Act’s reliance on §1373(c) highlights the anomalies inherent in state schemes that purport to adju dicate whether an employee is an authorized alien. Even when Arizona prosecutors obtain information regarding an alien’s immigration status pursuant to §1373(c), the prosecutors and state court will have to determine the significance of that information to an alien’s work authorization status, which will often require deciding technical questions of immigration law. See, e.g., 8 CFR §§274a.12(a)–(c) (dividing 62 different classes of aliens into those authorized for employment incident to immigra tion status, those authorized for employment with a spe cific employer incident to immigration status, and those who must apply for work authorization). And, as dis cussed above, that information may not shed light at all on an alien’s work authorization status, which is oftentimes distinct from immigration status. See supra, at 8, and n. 5. As a result, in many cases state decisions—made by prosecutors and courts with no or little experience in federal immigration law—will rest on less-than-complete or inaccurate information, “creat[ing] enforcement risks not present in the federal system.” Ante, at 7 (BREYER, J., dissenting). I can discern no reason why Congress would have intended for state courts inexperienced in immigra tion matters to adjudicate, in the context of licensing sanctions, the very same question that IRCA commits to federal officers, ALJs, and the courts of appeals.
Equally problematic is the fact that employers charged under a state enforcement scheme with hiring unauthor ized aliens are foreclosed from using I–9 forms in their defense in the state proceedings. Like IRCA, the Arizona Act confers an affirmative defense on employers who comply in good faith with IRCA’s verification requirement. See Ariz. Rev. Stat. Ann. §§23–212(J), 23–212.01(J). As discussed above, however, IRCA prohibits an employer from using the I–9 form to establish that affirmative defense under Arizona law. See 8 U. S. C. §1324a(b)(5); 8 CFR §274a.2(b)(4). Not to worry, the majority says: The employer can establish the affirmative defense through office policies and testimony of employees. Ante, at 18, n. 9. But Congress made the I–9 verification system and accompanying good-faith defense central to IRCA. See, e.g., H. R. Rep. No. 99–682, at 60 (“[A]n effective verifica tion procedure, combined with an affirmative defense for those who in good faith follow the procedure, is essential”). Given the importance of this procedure, if Congress in fact intended for state courts to adjudicate whether a person had employed an unauthorized alien in connection with licensing sanctions, why would it have prohibited that person from using the I–9 form—“the employer’s most effective evidence,” ante, at 9 (BREYER, J., dissenting)—in the state-court proceeding? The question answers itself: Congress intended no such thing.
Furthermore, given Congress’ express goal of “uni for[m]” enforcement of “the immigration laws of the United States,” IRCA §115, 100 Stat. 3384, I cannot be lieve that Congress intended for the 50 States and count less localities to implement their own distinct enforcement and adjudication procedures for deciding whether employ ers have employed unauthorized aliens. Reading the sav ing clause as the majority does subjects employers to a patchwork of enforcement schemes similar to the one that Congress sought to displace when it enacted IRCA. Hav ing carefully constructed a uniform federal scheme for determining whether a person has employed an unauthor ized alien, Congress could not plausibly have meant to create such a gaping hole in that scheme through the undefined, parenthetical phrase “licensing and similar laws.” See Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 468 (2001) (“Congress . . . does not, one might say, hide elephants in mouseholes”).
In sum, the statutory scheme as a whole defeats Ari zona’s and the majority’s reading of the saving clause. Congress would not sensibly have permitted States to determine for themselves whether a person has employed an unauthorized alien, while at the same time creating a specialized federal procedure for making such a determi nation, withholding from the States the information nec essary to make such a determination, and precluding use of the I–9 forms in nonfederal proceedings. See United States v. Locke, 529 U. S. 89, 106 (2000) (“We decline to give broad effect to saving clauses where doing so would upset the careful regulatory scheme established by federal law”).
To render IRCA’s saving clause consistent with the statutory scheme, I read the saving clause to permit States to impose licensing sanctions following a final federal determination that a person has violated §1324a(a)(1)(A) by knowingly hiring, recruiting, or refer ring for a fee an unauthorized alien.8 This interpretation both is faithful to the saving clause’s text, see supra, at 2– 3, and best reconciles the saving clause with IRCA’s “care ful regulatory scheme,” Locke, 529 U. S., at 106. It also makes sense as a practical matter. In enacting IRCA’s pre-emption clause, Congress vested in the Federal Gov ernment the authority to impose civil and criminal sanc tions on persons who employ unauthorized aliens. Licens ing and other types of business-related permissions are typically a matter of state law, however. See, e.g., Kamen v. Kemper Financial Services, Inc., 500 U. S. 90, 98 (1991) (noting that “[c]orporation law” is an area traditionally “governed by state-law standards”); Chicago Title & Trust Co. v. Forty-One Thirty-Six Wilcox Bldg. Corp., 302 U. S. 120, 127 (1937) (“How long and upon what terms a state created corporation may continue to exist is a matter exclusively of state power”). As a result, if Congress wanted to “ensur[e] that a full range of sanctions [was] available to be used against businesses that employ unau thorized aliens,” Brief for Respondent 37, Congress had to authorize the States and localities to impose licensing sanctions following a federal adjudication of a violation of IRCA.
I do not mean to suggest that the mere existence of a comprehensive federal scheme necessarily reveals a con gressional intent to oust state remedies. Cf. English v. General Elec. Co., 496 U. S. 72, 87 (1990) (“[T]he mere existence of a federal regulatory or enforcement scheme . . . does not by itself imply pre-emption of state reme dies”); New York State Dept. of Social Servs. v. Dublino, 413 U. S. 405, 415 (1973) (rejecting the argument that “pre-emption is to be inferred merely from the comprehen sive character of the federal [program]”). Here, Congress has made clear its intent to oust state civil and criminal remedies; the sole question is the scope of the saving clause’s exception for “licensing and similar laws.” The comprehensive scheme established by Congress necessar ily informs the scope of this clause. For all the reasons stated, the only interpretation of that clause that is consis tent with the rest of the statute is that it preserves the States’ authority to impose licensing sanctions after a final federal determination that a person has violated IRCA’s prohibition on the knowing employment of unauthorized aliens.
Under my construction of the saving clause, the Arizona Act cannot escape pre-emption. The Act authorizes Ari zona county attorneys to commence actions charging an employer with having employed an unauthorized alien. Ariz. Rev. Stat. Ann. §§23–212(D), 23–212.01(D). Arizona state courts must find that an employer has employed an unauthorized alien before imposing the sanctions enumer ated in the Act. §§23–212(F), 23–212.01(F). Because the Act’s sanctions are not premised on a final federal deter mination that an employer has violated IRCA, I would hold that the Act does not fall within IRCA’s saving clause and is therefore pre-empted.9
I agree with the conclusion reached by JUSTICE BREYER in Part IV of his dissenting opinion that federal law impli edly pre-empts the provision in the Arizona Act requiring all Arizona employers to use the federal E-Verify program. See Ariz. Rev. Stat. Ann. §23–214. I also agree with much of his reasoning. I write separately to offer a few addi tional observations.
As we have recently recognized, that a state law makes mandatory something that federal law makes voluntary does not mean, in and of itself, that the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,” Crosby v. National Foreign Trade Council, 530 U. S. 363, 373 (2000) (internal quotation marks omitted). See Williamson v. Mazda Motor of America, Inc., 562 U. S. ___, ___ (2011) (slip op., at 1–2) (concluding that a federal regulation permitting manufacturers to choose between two seatbelt options did not pre-empt state tort liability based on a decision to install one of those options); see also id., at ___ (slip op., at 2) (SOTOMAYOR, J., concurring) (“[T]he mere fact that an agency regulation allows manufacturers a choice between options is insufficient to justify implied pre-emption”).
This case, however, is readily distinguishable from cases like Williamson, in which state law regulates relationships between private parties. Here, the Arizona Act directly regulates the relationship between the Federal Govern ment and private parties by mandating use of a federally created and administered resource. This case thus impli cates the “uniquely federal interes[t]” in managing use of a federal resource. Boyle v. United Technologies Corp., 487 U. S. 500, 504 (1988) (internal quotation marks omitted); see also Buckman Co. v. Plaintiffs’ Legal Comm., 531 U. S. 341, 347 (2001) (“[T]he relationship between a federal agency and the entity it regulates is inherently federal in character because the relationship originates from, is governed by, and terminates according to federal law”).
Significant policy objectives motivated Congress’ deci sion to make use of E-Verify voluntary. In addition to those discussed by JUSTICE BREYER, see ante, at 17–19 (dissenting opinion), I note that Congress considered the cost of a mandatory program. In 2003, when Congress elected to expand E-Verify to all 50 States but declined to require its use, it cited a congressionally mandated report concluding that the annual cost of the pilot program was $6 million, the annual cost of a nationwide voluntary program would be $11 million, and the annual cost of a nationwide mandatory program would be $11.7 billion. H. R. Rep. No. 108–304, pt. 1, p. 6 (2003); see also Insti tute for Survey Research, Temple Univ., and Westat, INS Basic Pilot Evaluation: Summary Report 38 (2002) (con cluding that the Social Security Administration (SSA) and the Immigration and Naturalization Service were not “capable of enrolling and administering a program for the hundreds of thousands of employers in any of the large mandatory programs explored here”). A more recent re port prepared for the Department of Homeland Security similarly noted the costs associated with mandatory use of E-Verify. See Westat, Findings of the E-Verify® Program Evaluation 224 (2009) (observing that the SSA estimated that it would have to hire an additional 1,500 field staff to handle a mandatory national program); id., at 251 (re commending that any expansion of E-Verify take place gradually “to allow the Federal government adequate time to hire and train the new staff required to run such a program”). Permitting States to make use of E-Verify mandatory improperly puts States in the position of mak ing decisions for the Federal Government that directly affect expenditure and depletion of federal resources.10
The majority highlights the Government’s statement in its amicus brief that “ ‘the E-Verify system can accommo date the increased use that the Arizona statute and exist ing similar laws would create.’ ” Ante, at 25 (quoting Brief for United States as Amicus Curiae 34). But “[t]he pur pose of Congress is the ultimate touchstone in every pre-emption case.” Medtronic, 518 U. S., at 494 (internal quotation marks omitted). It matters not whether the Executive Branch believes that the Government is now capable of handling the burdens of a mandatory system.11 Congressional intent controls, and Congress has repeat edly decided to keep the E-Verify program voluntary. Because state laws requiring use of E-Verify frustrate the significant policy objectives underlying this decision, thereby imposing explicitly unwanted burdens on the Federal Government, I would hold that federal law impli edly pre-empts the Arizona requirement.
* * *
For these reasons, I cannot agree with either of the Court’s holdings in this case. I respectfully dissent.
1 IRCA defines the term “unauthorized alien” to mean, “with respect to the employment of an alien at a particular time, that the alien is not at that time either (A) an alien lawfully admitted for permanent residence, or (B) authorized to be so employed by this chapter or by the Attorney General.” 8 U. S. C. §1324a(h)(3).
2 As these cases demonstrate, a contextual analysis of a statutory provision is in no way “untethered” from the statute’s text. Ante, at 15, n. 6. To the contrary, the majority’s reading of the saving clause—with its singular focus on the undefined word “licensing” to the exclusion of all contextual considerations—is “untethered” from the statute as a whole.
3 None of the pre-IRCA state laws cited by the majority provided for licensing-related sanctions. The parties have not identified any preIRCA state laws related to licensing that purported to regulate the employment of unauthorized aliens other than those governing agricul tural labor contractors. See ante, at 13–14 (BREYER, J., dissenting).
4 By regulation, the Attorney General has conferred on parties charged with violating IRCA the right to obtain discovery from the Federal Government in a hearing before an ALJ. See 28 CFR §68.18.
5 For example, spouses and minor children of persons working in the United States as exchange visitors must apply for employment authori zation even though they have lawful immigration status as dependents of the exchange visitor. See 8 CFR §274a.12(c)(5).
6 In its capacity as an employer, a State may be able to access in formation regarding the work authorization status of its employees through use of E-Verify.
7 However, the “federal government’s determination creates [only] a rebuttable presumption of the employee’s lawful status.” E.g., §23– 212(H).
8 This reading of the saving clause finds support in IRCA’s legislative history. The House Committee on the Judiciary reported that IRCA was “not intended to preempt or prevent lawful state or local processes concerning the suspension, revocation or refusal to reissue a license to any person who has been found to have violated the sanctions pro visions in this legislation.” H. R. Rep. No. 99–682, at 58 (emphasis added). The Committee’s reference to “this legislation” is, of course, a reference to IRCA, and only federal officers, ALJs, and courts have authority under IRCA to find that a person has violated the statute’s sanctions provisions. My reading is also consistent with, though not compelled by, the provisions in IRCA that amended the Migrant and Seasonal Agricul tural Worker Protection Act (AWPA), 96 Stat. 2583. As JUSTICE BREYER discusses in detail, see ante, at 13–15 (dissenting opinion), AWPA requires entities to secure a certificate of registration from the Department of Labor before engaging in any “farm labor contracting activity.” AWPA §101, 96 Stat. 2587, 29 U. S. C. §1811(a). Before 1986, AWPA prohibited farm labor contractors from hiring unauthorized aliens, and it permitted the Department of Labor to institute adminis trative proceedings to enforce this prohibition. See §§103(a)(3), 103(b), 106(a), 96 Stat. 2588–2590. In IRCA, Congress repealed this pro hibition, IRCA §101(b)(1)(C), but authorized the Secretary of Labor to withdraw a contractor’s federal registration certificate upon a finding of an IRCA violation, IRCA §101(b)(1)(B)(iii), 100 Stat. 3372, 29 U. S. C. §1813(a)(6). Thus, IRCA made AWPA’s licensing sanctions turn on a prior federal adjudication of a violation of IRCA.
9 Because I believe that the Arizona Act does not fall within IRCA’s saving clause for this reason, I have no reason to consider the separate question whether the Act’s definition of “license” sweeps too broadly. Compare ante, at 9–11, with ante, at 1–2, 11–12 (BREYER, J., dissenting).
10 In Williamson v. Mazda Motor of America, Inc., 562 U. S. ___, ___ (2011) (slip op., at 10), we held that the Federal Government’s judg ment regarding the cost effectiveness of seatbelt options did not reveal an intent “to forbid common-law tort suits in which a judge or jury might reach a different conclusion.” The obvious distinction between that case and this one is that Congress’ decision to keep use of E-Verify voluntary bears directly on the costs to the Federal Government itself.
11 Notably, the Government’s brief does not state that the E-Verify system could accommodate the increased use that would result if all 50 States enacted similar laws; it limits its statement to “the Arizona statute and existing similar laws.” Brief for United States as Amicus Curiae 34 (emphasis added).
ORAL ARGUMENT OF CARTER G. PHILLIPS ON BEHALF OF THE PETITIONERS
Chief Justice John G. Roberts: We will hear argument next this morning in Case 09-115, Chamber of Commerce v. Whiting.
Mr. Phillips: Thank you, Mr. Chief Justice, and may it please the Court:
In 1986 Congress converted what had been before that time a merely peripheral concern of immigration policy, that is how to regulate worker authorization, and converted it into a core concern of immigration policy by the passage of the -- of the Immigration Reform and Control Act.
This Court has characterized that change in legislation as providing a comprehensive scheme for dealing with those issues, and that characterization is obviously apt because Congress provided for an exhaustive and exclusively Federal method of bringing to the attention of Federal authorities, problems and worker authorization, the method by which those matters should be investigated, the method by which they should be adjudicated, all of which are controlled as a matter of Federal, exclusive Federal activity; and indeed the ultimate judicial review goes exclusively to the Federal courts of appeals.
The sanctioning provisions are very explicit and they are very clear, and they are very balanced; and for a good reason.
Congress realized in this context that if you over-enforce in one direction, that is if you try to deter the hiring of unauthorized workers, you run a very serious risk of causing employers to err on the side of not hiring others who are in fact authorized but who may fall into protected classes.
And so Congress very carefully calibrated the penalties on both sides so that the employer essentially would play it straight down the middle and hire the best people for the job under these circumstances, while of course complying if at all possible with the Federal requirements.
And so it's against that backdrop--
Justice Antonin Scalia: Why is that a problem if, as -- as the Federal statute requires and the State statutes require, you -- you have to show an intent to hire an unauthorized worker?
Isn't -- isn't that what the State statutes here require?
Mr. Phillips: --Well, the State statute has two components to it.
One is knowing and one is intent.
Justice Antonin Scalia: Right.
Mr. Phillips: --But I don't see how that--
Justice Antonin Scalia: Right.
So why is that a problem for -- for the business?
I mean he's safe so long as he doesn't intentionally hire an unauthorized worker.
Mr. Phillips: --Well, I think part of the problem is that there -- it is never 100 percent clear precisely who is and who is not an authorized worker.
And I think what Congress said was -- I'm not going to deal with this problem in the kind of granular way you are looking at it, Justice Scalia, which is specifically at each of the individual employment decisions.
You are going to look at the generality of situations and realize that if you put on one side of the scale what Arizona has done here, which is to say that you can -- you can essentially have the death penalty to the business, that is complete eliminate the business's right to exist; and on the other side of the scale, a $250 fine, it would -- it would be pretty remarkable to say, well, I'm going to hide behind the intent and knowing requirements and instead simply avoid if at all possible the risk of Arizona's sanctions being imposed upon me.
Justice Antonin Scalia: Well, I think what Arizona would answer to that is: Well, that's the only option the Federal Government left us.
Mr. Phillips: Well, I'm quite sure that that's what Arizona will say.
Justice Antonin Scalia: They excluded everything else.
We might have used reticulated penalties or, you know, enforced the Federal law ourselves, but they forbade that.
But they did allow us to enforce the law, immigration laws, through licensing, right?
So it all essentially comes down to -- to the licensing issue, doesn't it?
Mr. Phillips: Right.
It does ultimately does come down to "through licensing" laws and -- the -- the -- part of the -- and the fundamental problem obviously with Arizona's scheme here is that this is not a licensing law.
This is a worker authorization sanctioning law.
Justice Anthony Kennedy: When I picked up this -- this brief and looked at this case, I thought: Oh, well, licensing, that is a defined term; I will look in Corpus Juris Secundum or ALR or something.
But it really isn't.
Your brief indicates you start with dictionaries, fair enough.
You indicate what Federal licensing laws are.
But I see no limitation on what the State can decide is a license in any jurisprudential principle that you cited.
Mr. Phillips: Right.
Justice Kennedy, I think the better way to try to -- to grapple with the meaning of the licensing law or whether it ought to be construed broadly to allow the State wide authority to engage in supplemental enforcement in this, or narrowly in order to say that what really ought to happen in this context is, if you deal with a situation where the Federal Government has enacted -- I'm sorry -- has enforced a provision and imposed a penalty through the Federal scheme, that then as a supplement to that the State does in fact have the authority to add something over and above what it -- what the Federal Government has done.
But it seems to me quite remarkable to think that Congress intended through a parenthetical referring to "through licensing laws" to allow the State to adopt an entire alternative shadow enforcement mechanism, non-administrative decision-making process, completely a State-run operation; and even at the end, the sanction is not -- is not imposed ultimately in effect by the -- by any regulating entity.
It is ordered by a State court.
Justice Antonin Scalia: That would be remarkable only because nobody would think that with this scheme in place, the Federal Government would not enforce it.
Of course no one would have expected that.
But what Arizona says has occurred here is that the scheme in place has not been enforced, and Arizona and other States are in serious trouble financially and for other reasons because of -- of unrestrained immigration.
And therefore, they had to take this very massive -- I agree this step is massive, and one wouldn't have expected it to occur under this statute, but expectations change when the Federal Government has -- has simply not enforced the immigration restrictions.
Mr. Phillips: Justice Scalia, I -- I understand the point and I understand the motivation for why Arizona did what it did.
But the -- the problem is the statute was enacted in 1986 and that's when the preemption standards were put in place.
And the -- again, the notion -- if you look at the way the structure of the statute -- and this also responds in some ways to Justice Kennedy's question how should you read licensing, since it's not a self-defining concept -- is if you -- is that first Congress said very specifically that immigration laws should be enforced uniformly, which says that there shouldn't be 40,000 different localities offering up their view of licensing and -- and the additional 50 States.
Second of all, and this part I think is particularly telling in terms of this massive State scheme that's been adopted, which is that under section 1324a(b)(5) which is in 134a of the -- of the appendix, Congress specifically outlaws the use of the I-9 form.
And in some ways this goes to your question, Justice Scalia, because it would be inconceivable that the State can in fact enforce knowing and intentional decisionmaking without having access to the I-9 form, because that's--
Justice Samuel Alito: Could I ask you this question to get back to the issue of whether this is a licensing law?
Mr. Phillips: --Sure.
Justice Samuel Alito: "Licensing" is not an unknown term.
States and municipalities issue all sorts of licenses.
For example, I think here in the District of Columbia every business has to have a general business license, isn't that right?
Mr. Phillips: That is true, Justice Alito.
Justice Samuel Alito: Now, if the District of Columbia were, after having enacted this requirement some years ago, were to pass a new ordinance saying and
"if you knowingly hire an illegal alien, your general business license can be forfeited. "
would that not -- would that cease to be a licensing law?
Mr. Phillips: Well, I -- I think the answer to that specific hypothetical is that's still not a licensing law, because it doesn't tie the grant of the license to the revocation powers.
I think Congress -- I think Congress means for the States to adopt something more specific than that, although I do think eventually--
Justice Anthony Kennedy: Why is it -- this is the same question you are answering.
Why is it suddenly not a license because the -- because the State imposes an additional condition, where it was a license before?
Mr. Phillips: --Well, I think the question is whether it is a licensing law within the meaning of what Congress intended.
I mean -- the -- the reality is, Justice Alito, there is -- there is no common definition of license, and various States--
Justice Stephen G. Breyer: Actually, there is.
I mean, I -- it seemed to me when I read this, it sounded a little familiar, and I think whoever wrote it in Arizona copied it out of the Administrative Procedure Act.
I mean, you read the definition of "license" in the Administrative Procedure Act and this is awfully close.
Mr. Phillips: --Right.
I understand that, Justice Breyer, and I agree with that.
But the problem is, is that the -- the Federal law, it doesn't talk about actions with -- with respect to licenses.
It talks about licensing laws and--
Justice Stephen G. Breyer: That's right.
It might have meant something different; Congress might have.
But what is, then -- I read the SCIU brief.
I thought that was pretty interesting.
Is that something you adopt as what the Congress did mean?
I mean, what do you think Congress did mean, and what evidence is there?
If it didn't mean the APA definition, what evidence is there for that?
Mr. Phillips: --Well, the SEIU brief does a very nice job of explaining the -- the particular focus of Congress, obviously, on the Agricultural Workers Protection Act, and in particular -- which has tremendous significance in terms of narrowing the State's authority here, because obviously in their conforming amendments in that context--
Justice Antonin Scalia: It could have named that, if that's it meant.
Mr. Phillips: --I'm sorry, Your Honor?
Justice Antonin Scalia: It could have named that, that particular licensing scheme, if that's what it meant.
But it didn't name it.
It said licensing generally.
What did it intend to add to that?
Barbers' licenses, beauticians' licenses?
How would any of this have anything to do with the immigration laws?
Mr. Phillips: Well, I think what it -- what Congress actually had in mind and what is the most natural reading of the licensing law is the fairly common situation where somebody violates Federal law, usually on the criminal side, and a State licensing entity finds out about a conviction of the Federal crime, and says: Oh, wait a second, we don't want people to have licenses under these circumstances, and therefore--
Justice Antonin Scalia: That's what they are saying.
That's exactly what they are saying.
We -- we have--
Mr. Phillips: --Well, no, no.
Justice Scalia, there is a vast difference between that and what they are saying.
Justice Antonin Scalia: --I think it's very common to talk about authority to do business within a State as -- as a license.
You say "licensed to do business in" so many States.
It's a common expression.
Now, I have -- maybe you will persuade me otherwise, but I have no doubt that insofar as this law limits the authority to do business within the State, it is a -- it is a licensing law.
It's a little harder extending licensing to formation of a corporation, but when you issue a corporation charter you really do two things.
You create the corporation and enable the limitation of liability that creates; and secondly, you authorize that new creature to do business within your State.
So at least half of that corporation law is licensing, it seems to me.
Now, if that's what I think, what--
Mr. Phillips: Actually, Justice Scalia, can I stop you there?
Justice Antonin Scalia: --Yes.
Mr. Phillips: Because I think, actually, if you just received the articles of incorporation, that doesn't actually in all States necessarily give you the opportunity to do business.
It just simply gives you the right to exist, and you may very well need to get a separate document in order to actually do business in a particular State.
Justice Antonin Scalia: But you do not need the kind of a document that an out-of-State corporation needs.
Mr. Phillips: No, you don't need that.
But the reality is that nobody, I think -- and common sense and common use of the term, thinks of articles of incorporation or charter of partnership or any of those as documents -- as licensing, which suggests that the State--
Justice Sonia Sotomayor: Could I -- could I--
Mr. Phillips: --I'm sorry?
Justice Sonia Sotomayor: --just -- just focus the question?
Because we keep talking about whether the APA-type definition of licensing is what Congress intended or not, but you don't disagree that Congress at least intended that if someone violated the Federal law and hired illegal aliens of Hispanic -- undocumented aliens and was found to have violated it, that the State can revoke their license, correct, to do business?
Mr. Phillips: Yes.
I don't disagree with that, Justice Sotomayor.
Justice Sonia Sotomayor: So it really doesn't matter whether they are revoking their right to do business in the State.
And they can only revoke their charter or their articles of incorporation if they're -- if they were filed in that State.
They wouldn't have power to revoke a Delaware--
Mr. Phillips: They can't do it in Delaware, right.
Justice Sonia Sotomayor: --All right.
So it's stopping them from doing business.
So really, the only conflict you are talking about is not the power to stop them from doing business, because you accept that this saving clause gives them the power to do that, to revoke the right to do business.
What you are talking about is a conflict in the adjudication of that issue.
Mr. Phillips: Right, and the enforcement and investigation.
Justice Sonia Sotomayor: So I'm -- you know, how they define "license" or not is irrelevant to me.
Walk me through whether -- what expressly preempts that adjudication right--
Mr. Phillips: Right.
Justice Sonia Sotomayor: --or what implicitly preempts that adjudication right.
Mr. Phillips: Right.
Justice Sonia Sotomayor: Because that is, for me, what the center of this question is.
Mr. Phillips: Right.
I think there are three pieces of evidence that respond directly to what you asked, Justice Sotomayor.
First is Congress in section 115 of the statute specifically says enforcement should be uniform, which suggests to me that this ought to be exclusively a Federal investigation and -- and adjudication process.
Two, the point I was making earlier about the I-9 form.
Those forms cannot be used in any--
Justice Antonin Scalia: Excuse me.
Don't depart from that.
What does that mean, "enforcement shall be uniform"?
Mr. Phillips: --I'm sorry?
Justice Antonin Scalia: What does that mean, "enforcement shall be uniform"?
Mr. Phillips: The enforcement of the immigration laws shall be uniform.
Congress stated that as a -- as an overarching principle--
Justice Antonin Scalia: Is that any different from--
Mr. Phillips: --when it enacted section 115.
Justice Antonin Scalia: --from what is the assumed situation with respect to all Federal rules?
Are Federal laws not to be applied uniformly?
Mr. Phillips: Well, no, I -- I mean, I think it depends on the circumstances.
I can imagine a lot of -- I mean, this is -- remember, we are talking about immigration policy and immigration law here, and in general, you would expect that to be pretty much uniform.
But this Court in De Canas had decided that there are some elements of it that were not, and Congress is simply reinforcing the basic notion that enforcement of it ought to be uniform.
Justice Samuel Alito: Doesn't the exception for licensing mean that this isn't going to be completely uniform?
One jurisdiction may take the position that a restaurant that employs illegal aliens may lose its restaurant license -- its license to operate.
Another one may take a different position.
So it's not going to be the same.
Mr. Phillips: Right.
But -- but, Justice Alito, I think that's why it's terribly important to limit, to narrow as much as possible -- and it's fully consistent with congressional intent -- the need to get a full sanction done by the Federal government and then just an add-on on the licensing side, rather than an entire regime to enforce State law.
Justice Sonia Sotomayor: But it can't be uniformity of sanction, because the court permitted licensing sanctions.
Mr. Phillips: Right, there -- but only at that point.
Justice Sonia Sotomayor: So let's go back to my question of adjudication.
What you are saying is what's specifically preempted is the right to adjudicate--
Mr. Phillips: Investigate.
Justice Sonia Sotomayor: --whether someone has hired undocumented aliens, correct?
Mr. Phillips: Yes, Justice Sotomayor.
And -- and the last thing I would say to that was the conforming amendments with respect to the Agricultural Workers' Protection Act was the situation where the Department of Labor, which used to engage in adjudication as well, was divested of that authority.
It seems quite unlikely Congress meant to give that authority to the States and take it from the Department of Labor.
Justice Antonin Scalia: I don't see the problem in diverse adjudication.
Wouldn't there be a Federal question presented if a company claimed that it was deprived of the ability to do business because of a mistaken interpretation of Federal law, that the person it hired was not an authorized person?
Mr. Phillips: But Arizona doesn't purport--
Justice Antonin Scalia: Wouldn't that be a Federal question that -- that could be--
Mr. Phillips: --Well, Arizona doesn't purport to be enforcing Federal law here.
It has an independent State law basis for the actions that it takes.
So that would not arise under Federal law.
Justice Antonin Scalia: --Doesn't the State law basis refer to the Federal law?
Mr. Phillips: No, it -- actually, I don't think it--
Justice Antonin Scalia: I thought it tracked it.
Mr. Phillips: --It tracks it, but it doesn't incorporate it.
It doesn't purport to be applying it.
It's the same standards, but it's still a matter of State law.
It's not a Federal -- it's not Federal -- it doesn't arise under Federal law.
I'd like to reserve the balance of my time.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF NEAL KUMAR KATYAL, ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING PETITIONERS
Mr. Katyal: Thank you, Mr. Chief Justice, and may it please the Court:
Nearly a quarter of a century ago, Congress declared Federal employer sanctions central, not peripheral, to the policy of immigration law.
Congress broadly swept away State and local laws, preempting any sanction upon those who employ unauthorized aliens, with the sole exception being a mere parenthetical for licensing and similar laws.
Chief Justice John G. Roberts: Just to pose there, we've had a little discussion about what licensing laws are, but we haven't talked at all about those last two words, "and similar laws".
It seems to me that whatever wiggle room or ambiguity there may be in saying whether this is a license or not, Congress swept pretty broadly.
It said, not just licensing laws, but licensing and similar laws.
Mr. Katyal: First let me tell you, Mr. Chief Justice, what we think a licensing law is and then deal with the "similar" question.
We think a licensing law, as Congress defined it in IRCA, was the traditional licensing laws that were in place in 1986.
Those were largely farm labor contractor laws.
They were aimed at fitness to do business, and they had a few essential characteristics in those laws.
Chief Justice John G. Roberts: I'm sorry.
Let me just -- I mean, businesses had to have licensing laws pretty much across the board, right?
You couldn't set up a -- I don't know, an electrical contracting business if you weren't licensed to do business or met the requirements for an electrician.
It wasn't just agricultural.
Mr. Katyal: Oh, absolutely.
But I think that this licensing law looks very different from the ones you are referring to or the farm labor contractor ones for a number of reasons.
The first is licensing laws issue licenses.
They are generally about the issuance of licenses, not simply ones in which licenses are revoked.
Second, they are ones in which the issuance of the license, the criteria for issuance is the same as the criteria for revocation.
Justice Antonin Scalia: Excuse me.
Are you saying, and I think the Petitioner here may have been saying as well, that if you have a licensing law that permits the revocation of the license, the revocation is not a licensing law?
Mr. Katyal: No.
What I'm saying is--
Justice Antonin Scalia: Suppose I have a licensing law which says if you do this your license will be revoked.
Does that remain an a licensing law?
Mr. Katyal: --In general itself that is not a licensing law.
Licensing laws share a number of characteristics.
Now, we can debate about whether subtracting one or another of those characteristics--
Justice Antonin Scalia: Why make exception for licensing laws therefore if you can't evoke a license under it?
Mr. Katyal: --Because, Justice Scalia, Congress wanted to preserve the States traditional power for licensing laws, which were about fitness to do business.
And what Arizona has done--
Justice Antonin Scalia: Once you are in you can do whatever you like, you think that is what Congress meant?
You can pass upon their fitness when you issue the license, but once its issued they can do whatever they like, is that what you are telling me?
Mr. Katyal: --No.
I think that the criteria would be the same for issuance and revocation.
Justice Antonin Scalia: And revocation.
So that raises the question what does it make, why does it make any difference if the revocation provision is contained in the narrow licensing law or if there is a general State law which says all licenses that are issued may be revoked for certain reasons?
Mr. Katyal: Because, Justice Scalia, what Congress was trying to do was preserve the State's and localities traditional power for fitness to do business.
And one good indicia that fitness to do business is not was what at issue in the particular law is that they will let businesses operate, they will license them without any care whatsoever as to whether they have a history of violating the particular provisions.
Justice Antonin Scalia: So they should just -- Arizona should just amend all its licensing laws to require what they now require when the license is issued, and to say in each specific licensing law, that it can be revoked for the same -- on the same.
Mr. Katyal: Justice Scalia, that would solve that problem.
Now there are other hallmarks of licensing law.
Chief Justice John G. Roberts: Even if they said and you have to renew your license every year or every six months?
Mr. Katyal: That is correct.
That itself, I don't think, is relevant to whether the licensing law -- the other hallmarks are that they have discretionary adjudication by an expert body, that it's not mandatory, that it is generally aimed at qualifications to do business.
Chief Justice John G. Roberts: You don't disagree that whether or not a company hires illegal workers is related to quality or asserted ability to do business or qualification?
Mr. Katyal: A State could certainly make that part of its genuine fitness to do business law.
Now, here Arizona hasn't done that.
And we know that because the criteria for issuance of the license are entirely divorced from the criteria for revocation of the license.
And if Arizona really believed, Mr. Chief Justice, what you are saying, which is that it's relevant to the -- the violation is relevant to whether they can do business or not, they allow every single one of these entities to get the license.
Justice Sonia Sotomayor: Your argument sounds to me like, look at the law and see what its purpose is.
If the purpose is to regulate undocumented aliens, then it's struck down.
If it happens to put its revocation provisions in its licensing law, then its okay.
It doesn't make much sense to me.
Mr. Katyal: Justice Sotomayor, I'm not talking about purpose.
I'm saying look at the face of the statute and see what is--
Justice Sonia Sotomayor: The face of the statute talks only about if you hire undocumented aliens your license is revoked.
Mr. Katyal: --Right.
So that looks like a punishment statute.
There are essentially two boxes here--
Justice Sonia Sotomayor: But the savings clause says that it is okay.
Civil or criminal sanctions other than through licensing and similar laws.
Mr. Katyal: --Right.
And this is not a licensing law.
Congress essentially had two boxes in 1986.
One was the traditional fitness to do business laws and the other was what Congress--
Justice Sonia Sotomayor: If we disagree with you, could you answer the question I posed to your adversary, which is what makes the adjudication of status preempted?
Mr. Katyal: --Absolutely.
The Federal adjudication is expressly -- State adjudication of a Federal violation is expressly preempted as well as impliedly so for three reasons.
The first is that Congress in developing IRCA in the comprehensive scheme set out a series of procedures, Federal adjudication with an ALJ, all sorts of different regulations to the jot and tittle.
And what Arizona does here is what 40,000 different localities can do if this law is upheld, which is have--
Justice Sonia Sotomayor: At the time the statute was passed there were many, many State laws that adjudicated revocation of licenses.
Perhaps not many have addressed the issue of hiring undocumented aliens, but many State laws existed that independently adjudicated revocations.
What in the legislative history or in the words of the statute show that Congress intended in any way to limit those adjudications?
Mr. Katyal: --It's undoubtedly the case that without the parenthetical, the mere parenthetical savings clause, that Arizona-like laws would be swept away as sanctions -- that these are sanctions imposed.
So the question is whether the licensing law phrase saves that.
And I think it saves the State adjudication and I think the answer to that is no, because to read the statute that way is to permit all of those states to have their own laws, and it's undoubtedly the case that Congress wanted to sweep away the DeCanas-style State statutes that were in place that imposed sanctions on employers.
Chief Justice John G. Roberts: Counsel, just so I make sure I understand your approach.
You're saying that Arizona had a law saying you have to have a license to do business.
And then it became aware of a problem that it wasn't aware of before, it found out a lot of employers were employing child labor and they didn't know they would do that.
And they say we can revoke your license if you're determined to have employed child labor, that that would not be okay?
But it would be okay if in the original licensing thing they said and you had can't employ child labor.
Mr. Katyal: Well, I think that the answer depends on what Congress is trying to get at.
In 1986 we know what Congress was trying to get at with respect to State enforcement of immigration laws.
They broadly swept away the DeCanas-style laws and they said for the I-9 provisions, which President Reagan described as the keystone of the act, that I-9 documents can't be used in any procedure besides IRCA procedures.
Justice Anthony Kennedy: But the Chief Justice insists on an answer to his own question, but it seems to me his question is why isn't that still a licensing law?
Mr. Katyal: If it has independent adjudication it is swept away by the first parts of the H2 statute which say, which say the provisions of this section preempt any State or local law imposing civil or criminal sanctions.
Justice Anthony Kennedy: But in the child labor example, why isn't that an addition to a regulatory licensing scheme so that it's a licensing law.
Mr. Katyal: Because if I understand -- I may not understand the hypothetical, but the word provisions refers to the entire subset, the entire statute in IRCA including the procedural protections, the procedures that follow for Federal enforcement of immigration laws.
Chief Justice John G. Roberts: If you -- excuse me.
You tried earlier to talk about the two boxes and you said something would be preempted by the first clause.
Anything, civil and criminal sanctions are allowed if they are imposed through licensing and similar laws.
There are not two boxes.
The State can do what's in the first part so long as it does it through licensing or similar laws.
Mr. Katyal: Right.
And our position is that this is not a licensing law because it doesn't bear any of the indicia of a traditional licensing law.
Chief Justice John G. Roberts: Is it similar to a licensing law?
Mr. Katyal: No, I don't think so.
Congress when they used similar meant to side step the schematic debate about whether something is a certificate as some of the farm labor contractor statutes use that term or a license.
Justice Antonin Scalia: No, no, that's all right.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF MARY R. O'GRADY ON BEHALF OF THE RESPONDENTS
Mary R O'grady: Thank you.
Mr. Chief Justice, and may it please the Court:
Through their police powers, States traditionally have the authority to regulate the conduct of employers within their jurisdiction to determine what conduct warrants issuance of a State license and to determine what conduct justifies suspending or revoking such a license.
And although Congress preempted some of our traditional authority when it enacted IRCA in 1986, it preserved significant State authority through the savings clause that permits a State to impose sanctions through licensing and similar laws.
Justice Ruth Bader Ginsburg: Have you answered the anomaly that Arizona cannot impose a fine even in a modest amount, but it can revoke someone's license to do business?
Mary R O'grady: Your Honor, we think that looking at the savings clause -- we don't view it as an anomaly.
The structure that Congress established is one that the State's authority is determined by the nature of the sanction that we choose to impose.
We don't have the authority to -- they -- they took away our authority to impose civil monetary and criminal sanctions, but preserved our authority to impose sanctions under this law.
Justice Anthony Kennedy: But underlying Justice Ginsburg's question is why would Congress want to do that?
Mary R O'grady: Well, I think it makes sense, Your Honor, because in terms of licensing, it -- it provides some accountability, because we are the entities that establish policy for our licensees and we are the ones accountable for whether that business remains in business or whether we are taking it away from them.
Justice Antonin Scalia: Perhaps Congress never expected that the States would have to resort to such massive measures, and they probably wouldn't have if -- if the law had been uniformly enforced and vigorously enforced; right?
You -- you didn't -- didn't have any notion of doing this sort of thing in 1986, did you?
Mary R O'grady: Your Honor, certainly we waited until 2007.
Justice Antonin Scalia: So maybe Congress wasn't worried about it because it seemed very unlikely that anything like that would occur.
Mary R O'grady: Perhaps.
But I think also that Congress was recognizing what this Court recognized in De Canas, was that unauthorized employment has significant local consequences, so they did not want to fully preempt State law.
They wanted to preserve the authority--
Justice Stephen G. Breyer: The main -- the main anomaly it seemed to me to be this, that in the Federal Act, as -- that was the first point that the Chamber made, that it's a fairly careful balance.
There are a group of people in Arizona, they may look as if they come from Mexico or speak with an Hispanic accent, and you are not certain whether they in fact are illegals or that they are legal.
Now, think of that category.
Congress has passed a statute that gives the employer just as much incentive to verify, so there is no discrimination, as to dismiss, so there is no illegal hiring.
It's absolutely balanced.
A $1,000 fine for the one, a $1,000 fine for the other.
So Arizona comes along and says: I'll tell you what, if you discriminate, you know what happens to you, nothing?
But if you hire an illegal immigrant, your business is dead.
That's just one thing they do.
Now, how can you reconcile that intent to prevent discrimination against people because of their appearance or accent -- how do you reconcile that with Arizona's law?
If you are a businessman, every incentive under that law is to call close questions against hiring this person.
Under the Federal law every incentive is to look at it carefully.
Mary R O'grady: --Your Honor, a couple of points.
First in terms of how our law works, we do have a prohibition against investigating any complaint that is based solely upon race.
So if we get a complaint that says those people all look Mexican or Hispanic, that does not get investigated under Arizona law, first.
We also have criminal penalties if frivolous complaints are filed.
Beyond that, we have the use of E-Verify which is an added protection for employers to prevent the hiring of unauthorized aliens.
So if they use E-Verify, if they are in good faith compliance with the I-9 process, they have no risk of exposure under Arizona law just as true under Federal law.
Justice Sonia Sotomayor: I'm -- doesn't it frustrate the congressional intent when the Federal law says that the I-9 can be used for no purpose other than the Federal adjudication of whether a violation has occurred or not?
Doesn't it frustrate that law to have the States raise a defense that depends on forcing someone to disclose something that the Federal law protects?
I mean, this is a vicious circle.
Federal law says you can't do the I-9, you can't use it for any purpose other than the Federal adjudication.
Now you are creating a defense that says, you have to supply us with something that Federal law otherwise protects from disclosure.
Mary R O'grady: Your Honor, we don't think that the Federal law prohibits the use of an I-9 -- of the I-9 -- an employer's use of the I-9 in a State proceeding, that these can be used under the Federal proceeding or in the State.
But beyond that, if at some point in an actual enforcement action it was determined that Federal law did have that impact, they would still have that defense available to them.
They would just have, to you know, prove it up in a different way other than use the form.
Justice Sonia Sotomayor: That doesn't answer my point.
Doesn't it frustrate Federal law when the Federal law says that I-9 can be used for no purpose other than the Federal adjudication of the status of employees?
I think that's--
Mary R O'grady: Here's -- here is what the law says: It may not be used for purposes other than for enforcement of this chapter.
And we believe that a State enforcement action under the authority for preserving sanctions through licensing and similar laws, would fall within that.
So we think they should be able to use that; the employer should be able to use that.
Justice Samuel Alito: Isn't there -- isn't there a difference in saying that it may not be used for any purpose other than for enforcement of this chapter and other provisions of Federal law on one hand; and on the other hand saying it may not be used for any purpose other than in a Federal proceeding?
The enforcement -- the I-9 certainly could be used in a Federal proceeding by the employer.
Would that then -- would that be used for the enforcement of the Federal law?
I wouldn't think so.
Mary R O'grady: That's true, Your Honor.
Justice Stephen G. Breyer: Is the I-9 -- I do have a question on the I-9.
I'm not certain.
I thought under Federal law that if the employee -- the employer isn't certain, but the employee says, here's my Social Security card, here's the driver's license.
The employer looks at that, he's home free, is that right?
But under Federal -- under your law, under Arizona law, he's not home free, and, moreover -- because he -- it may -- he's not home free, he still could be prosecuted.
Is that right or not?
Mary R O'grady: --No, that is not right, Your Honor.
Justice Stephen G. Breyer: So if shows the driver's license under -- under Arizona law, if the -- if he shows a driver's license and Social Security card, the worker, the employer looks at it, the employer cannot be prosecuted?
Mary R O'grady: Well, Your Honor--
Justice Stephen G. Breyer: Yes or no?
Mary R O'grady: --We would need the evidence that the person knowingly employed the unauthorized alien, and a good faith defense--
Justice Stephen G. Breyer: All right.
So -- I thought in reading it that it creates some kind of presumption, but he's not home free?
Mary R O'grady: --No, Your Honor.
The -- but the substantive--
Justice Stephen G. Breyer: But under Federal law he is home free.
Mary R O'grady: --The substantive requirements under Arizona law and Federal law are the same.
We are imposing no new obligations.
Justice Stephen G. Breyer: So then he's home free?
Look, I don't -- I'm trying to understand.
Maybe there is not enough time to explain it, but I thought Federal law requires this E-9 business or whatever that E review is.
And I was worried about the E review which it seemed to require because it seemed to me in 20 percent of the cases where the notice is, this guy is not authorized; we don't have any record that he is authorized to work -- 20 percent of those are wrong and he is authorized to work.
So the employer who follows that is really going to fire 20 percent of the people who will be absolutely entitled to work.
And so I would just like to you address those points, as you wish.
Mary R O'grady: Okay.
And let me walk through how our law works to see if this addresses the concern.
So the -- Arizona doesn't change anything in terms of the use of the I-9.
We retain the same defense that is in the Federal law for good faith compliance with the I-9.
We do require employers to use E-Verify although we don't impose a sanction on the employer if they don't use E-Verify.
Justice Ruth Bader Ginsburg: Can you explain that, E-Verify, because this is a Federal resource, and the Federal Government has said we want this to be voluntary.
How can Arizona take a Federal resource, which the Federal government says is voluntary except in certain circumstances, and turn it into something that is mandatory?
Mary R O'grady: We think the -- that question is answered by looking at the conflict preemption analysis, because Congress didn't address the role of the States with regard to E-Verify.
And we aren't--
Justice Ruth Bader Ginsburg: I don't get into any preemption or not, but Arizona wants to use a Federal resource.
And the Fed makes it available if the employer can use it voluntarily, but not mandatorily.
How can -- how can Arizona set the rules on the use of a Federal resource?
Mary R O'grady: --Your Honor, we can -- as long as it's not a burden to the objectives of Congress, we think that we can require employers within our jurisdiction to use E-Verify.
Justice Antonin Scalia: Do -- do you make it mandatory?
Mary R O'grady: Well, our statute says you shall use E-Verify.
We don't impose a penalty against employers who fail to use it.
The consequences are the same as they are under Federal law.
Justice Antonin Scalia: You just -- you just don't get the safe harbor.
Isn't that the only consequence?
Mary R O'grady: That's right.
You don't get the safe harbor under E-Verify.
Now -- for the use of E-Verify.
We did add after this lawsuit was filed some additional requirements similar to what they have under the Federal system where you can't get State contracts, you can't get State grants.
Justice Anthony Kennedy: But you are taking the mechanism that Congress said will be a pilot program that is optional and you are making it mandatory.
It seems to me that's almost a classic example of a State doing something that is inconsistent with a Federal requirement.
Mary R O'grady: Well, again, we look at the test for conflict preemption in terms of, does this make it impossible to comply with Federal law?
No, it is really a question of, are we interfering with Congress's -- excuse me, the Federal government's ability to achieve its goals?
And the goal in developing E-Verify is to have a more effective verification system.
Justice Stephen G. Breyer: If they fail to do it, then they cannot receive any, quote,
"grant, loan, or performance-based incentive. "
end quote, from the State.
That's what the law says, isn't it?
Mary R O'grady: That's what -- and that was added after this lawsuit was filed.
Justice Stephen G. Breyer: I would think that the answer to Justice Scalia's question is, yes, there is that penalty.
It isn't simply hortatory.
Mary R O'grady: Well, there's no penalty in terms of--
Justice Stephen G. Breyer: You don't go to jail.
What you do is you lose any grant, loan, or performance-based incentive.
Is that right?
Mary R O'grady: --That is true under current law.
That is not what the plaintiffs' challenge--
Justice Antonin Scalia: Does this lawsuit challenge that?
Mary R O'grady: --It does not, Your Honor.
They just challenge the--
Justice Antonin Scalia: You are under the old law, and the only sanction is you lose the safe harbor, if that's a sanction.
Mary R O'grady: --That's right.
That's right, Your Honor.
Justice Sonia Sotomayor: --So in answer to Justice Breyer's earlier question, in fact, relying on the I-9 does not provide a safe harbor, because under the E-Verify system you can't just rely on the I-9 forms and statutes.
You have to rely on the E-Verify.
Mary R O'grady: Well, Your Honor, we have the same -- it's modelled after the Federal law.
So just as Federal law has a defense for employers who in good faith follow I-9, so does the State law.
Justice Samuel Alito: The Federal law and the State law do seem to be exactly the same on this point, but I have -- I don't understand how these two provisions fit together when E-Verify is used.
Suppose an employer -- the first thing the employer does is receive the forms from the employee, from the I-9 process.
He looks at the forms.
Well, they reasonably seem to be authentic.
So that employer now has the good faith defense that's provided under -- by the I-9 process, under both Federal law and State law.
But under both Federal law and State law, the employee -- employer either must or may also use the e-verification system.
The employer gets back a notice of non-authorization.
But what -- and that creates, supposedly, a rebuttable presumption under both systems that the employee is not authorized to work.
How does that fit together?
If you have a complete defense for having used the I-9 process in good faith, the whole e-verification process seems to be irrelevant under both Federal law and State law.
I don't understand how they fit together.
Mary R O'grady: And Justice Alito, we haven't wrestled that in practical application, and I'm not aware of them reaching that point under the Federal system, either, but -- because it does seem at some point, if you -- that the system should work, that if you have used I-9 and you get back a final non-confirmation, not a tentative non-confirmation, that that employee is unauthorized, that that, you know, seems like it should carry greater weight in an enforcement action.
But as a -- as an -- on an as-applied basis, I'm not sure how that plays out in an actual enforcement action.
Chief Justice John G. Roberts: Could you -- I wasn't quite sure what she meant.
Judge Schrader, in her opinion for the court, emphasized that this statute was being evaluated on its face and that -- she said in as-applied, particular challenges might arise.
How would that work?
If we determined this was not preempted, how would -- on its face, how would an as-applied challenge come about?
Mary R O'grady: I think, Your Honor, perhaps if we -- perhaps in terms of what are the outer limits of our definition of "license", and they were saying that we are outside the definition of licensing and similar laws, in a particular case, perhaps that would be an as-applied type challenge.
I think some of the I-9 concerns are perhaps more appropriately resolved in a -- in a direct case where that issue has arisen on an as-applied basis, and I think she was concerned about some of the real implementation questions that were wrapped into the legal challenge.
But for the most part, I think the general framework of our statute is appropriate for -- in this challenge.
Justice Antonin Scalia: So you think after this case we can look forward to the cases, one by one, for all the various types of licenses?
Those would be as-applied challenges and would not have been resolved by this case.
Mary R O'grady: Your Honor, my hope is that we--
Justice Antonin Scalia: We are really wasting our time here, aren't we?
Mary R O'grady: --My hope is, Your Honor, that we get sufficient guidance.
Justice Sonia Sotomayor: Wouldn't it be easier, if that is Justice Scalia's concern, to take the Solicitor General's position, that if you are adjudicating good faith or intent differently in any way from the Federal government, that it's granted?
Isn't that what waiting for an as-applied challenge means, whether or not you are putting different requirements on proving good faith?
Mary R O'grady: No, Your Honor, and -- because I was trying to give some examples of the kinds of things that may come up as a practical matter, but I think we can get the guidance from this Court.
I hope we can proceed in implementation--
Justice Sonia Sotomayor: Then let me ask the question directly.
If Arizona's system does not permit an employer to rely on non-suspect documents, the I-9 documents that are permitted employers to rely on, the Arizona system says, no, you can't rely on those.
Is that preempted or not?
You can't rely on I-9, or the Arizona system says -- on the I-9 documents.
Or the Arizona system says, you can't hire someone who hasn't been approved under the e-verification system.
Is that preempted?
Mary R O'grady: --I think those would both be problems.
I think we need to be consistent with the -- the structure and the obligations that are imposed under Federal law in terms of our sanctions provisions.
Justice Antonin Scalia: Excuse me.
Are you conceding that any variation from the Federal standards for -- for criminal and civil liability is automatically precluded?
I mean, as I read the exception, it's an exception for State licensing and similar laws.
And it doesn't say,
"So long as those licensing and similar laws go no further than what the Federal government has done. "
I mean, we often allow States to impose regulatory requirements that go beyond the regulatory requirements that the Federal government has imposed, and that is not automatically considered to be preempted.
So why -- why are you conceding that Arizona cannot go a whit beyond what the Federal government says?
Mary R O'grady: Because I think what Congress preserved for us was our ability to impose sanctions, including the suspension and revocation of State laws.
But I do think they established a uniform national standard.
I don't think we could, for example, establish a strict liability offense in Arizona.
We would have to have a scienter requirement as they have in Federal law.
Justice Stephen G. Breyer: Now, what I was looking at specifically is "Federal law says".
If you look at the driver's license and Social Security card, those are I-9 docs.
Then the employer has established an affirmative defense and has not violated the law.
That's what it says at cite 27A, okay?
That is the Federal law.
Arizona law that I was reading -- maybe there's another place I should read -- is it says, in determining whether there is an unauthorized alien, the court shall consider the Federal government's determination.
It creates a rebuttable presumption.
That means it might be rebutted.
So I see a difference there.
And the reason that that's relevant is because of my first question.
If you are an employer, prior to your law, it's 50/50.
I better verify because if I am discriminating, you know, da, da, da, and it's not that hard.
I just look at the drivers' license and I look at -- and I'm home free, and the Social Security card, and if I hire an illegal immigrant, the same thing, da, da, da.
So same both ways.
So, your law.
Employer, look at the driver's license and Social Security, you are not home free.
Employer, if it turns out that you have been hiring this illegal immigrant and he's not an American, your business is finished.
But what happens if I discriminate, under our law?
Now, that is the original point they made.
That's why I brought up this question of difference in standards.
And I want to be absolutely clear what your answer to that is.
Mary R O'grady: And I am hoping I am being clear, Justice Breyer.
We have the same standards as Federal law.
We have the same I-9 defense that's in Federal law.
Justice Stephen G. Breyer: Well, where?
Where is it in the statute, then?
Because what I read were the words "rebuttable presumption", and I might be reading the wrong words.
So tell me where it is.
Mary R O'grady: Okay.
Let me get to it, and let me explain our rebuttable presumption while I find the specific statutory cite.
Justice Samuel Alito: Well, it's on page 184 to 185 of the appendix petition, isn't it?
Mary R O'grady: And 178(a) is the provision -- for the purposes of this section, employer that establishes it has complied in good faith with the requirements of 8 U.S.C. 1324a(b), establishes an affirmative defense, et cetera.
So that is the provision that provides the I-9 defense.
The rebuttable presumption issue and this is how that comes into play.
We have to, in bringing an enforcement action, have to rely, the State in making its case, has to rely on information from the Federal Government regarding whether someone is authorized or unauthorized.
We have to rely on that information from the Federal Government.
We bring our action in State court if we have verification from the Federal Government that that person is unauthorized.
We have additional information that we've established the scienter requirement, then we bring our action.
But the employer has an opportunity to rebut the evidence that we've presented in a State court proceeding.
It may be, you know, that person doesn't work for us or some other type of evidence.
So that is the role of that rebuttable presumption, Your Honor.
Justice Stephen G. Breyer: Okay, thank you.
I see that.
Mary R O'grady: Certainly.
So in terms of the prior adjudication--
Justice Anthony Kennedy: Just so you know, I interpret your answer as confirming the implication of Justice Breyer's questions that there is a very substantial difference in Federal and State law on this point.
I mean, you told about -- you know what lawsuits are about.
If you are home free, a driver's license and Social Security inspection under Federal law and you're not under State law, that is a difference.
Mary R O'grady: --And our standards are the same.
In subsection J, which we have the I-9 affirmative defense--
Chief Justice John G. Roberts: So you think you are home free under State law?
Mary R O'grady: --To the extent that you should be home free and you would have the benefit of that good faith defense.
Chief Justice John G. Roberts: It's an affirmative defense under both.
Mary R O'grady: Yes, Your Honor.
Justice Stephen G. Breyer: But the main point -- I will check that.
But I think maybe I was mistaken, perhaps, and that I was looking at the other section.
Mary R O'grady: That's right.
Justice Stephen G. Breyer: But then we are still stuck with this enormous discrepancy in penalty.
I mean, I'm characterizing it as enormous, but it seems like, you know, it's even on discrimination versus under the Federal law.
It's not even, your business is out to lunch, gone and on the other side it has nothing.
What about that one?
Mary R O'grady: I think, Your Honor, that that is the natural consequence of the savings clause that Congress itself wrote--
Justice Stephen G. Breyer: The savings clause itself, the word licensing, not everyone looks at this, but I did look at the legislative history and when you look at that paragraph on page 39 of the red brief, it seems to me that that paragraph says what it means.
It says precisely what it is.
It says -- the first thing it says is that, look, if you are found to have violated this.
Where is it?
It's page, there it is.
Suppose somebody's been found to have violated the sanctions provision in the Federal legislation.
He has been found by the Federal Government, then what the State does, it can revoke his license.
That's one thing.
And the second thing it says, it doesn't want to preempt fitness to do business laws, such as State farm labor contracting laws or forestry laws.
In other words, its thinking of some precise set of licenses.
And that's why this licensing thing was there and the very next participant of this Federal law are conforming amendments and those conforming amendments apply.
The departments of government that were concerned with maintaining State farm labor contractual laws.
Now, I grant you, you have to go beyond the text, but some of us do because we get enlightenment.
And going beyond that text, it seems to me we should go follow what that house report says.
Now, what is your response to that?
Mary R O'grady: --Well, first, of course, we would focus on the text where Congress could have but did not--
Justice Stephen G. Breyer: I said yes, I got broad licensing -- but let's deal with the part where you look at their explanation as to why they put those words there.
Mary R O'grady: --Okay.
First, the farm labor contractor is simply an example, and I think it says such as an example of the type of licensing provisions that existed at this time that addressed that.
So that's not an all inclusive universe of the sanctions -- of the licensing laws that might be subject to this.
They also don't specifically say there has to be a prior Federal adjudication.
The sentence has passive voice, has been determined without specifying who is making that determination and it specifically refers to State and local processes that provide for the suspension and revocation of State licenses.
And then there is a following sentence that says, you know, further, we don't intend to disrupt laws such as these forestry and other, you know, fitness to do business.
We think this is a fitness to do business law, in that we are establishing as a State standard that if you engage in this conduct of knowingly employing unauthorized aliens we are going to have the ability to take an action against that license that we have given you to do business in our jurisdiction.
So we think we fit within that last sentence of the--
Justice Ruth Bader Ginsburg: Can you also explain the I-9?
You said it's the same as in the Fed. Home free if you have documents, Social Security, driver's license.
But you also require the E-Verify.
So how -- does the E-Verify information modify the I-9?
How -- how do those two--
Mary R O'grady: --They work in our system, Your Honor, as they do under the Federal law, under -- that you get a rebuttable presumption if you -- in your favor if you used E-Verify, the affirmative defense if you've used I-9.
And I am -- there is that caution; it is good faith use of -- of the I-9 system.
We do have examples where for example if an employer is terminated because they are unauthorized and they show up with a different name and different papers 2 weeks later, you are not going to be able to establish your good faith.
So you are home free but subject to that good faith limitation.
But we do incorporate the same obligations that exist under Federal law.
And also, I wanted to address more on the farm labor contractors and the amendments and what we think that we are doing in those amendments was simply dividing responsibility at the Federal level between the Department of Labor and their processes that preexisted IRCA, and what they were establishing in IRCA, and said we are not going to have these determinations of whether they -- the farm labor contractor has employed an unauthorized alien through a Department of Labor process; we are going to instead use the IRCA-established process.
But importantly what Congress did not change in the agricultural worker regulations was the provision that addresses State law.
It said before IRCA and after IRCA that those laws -- those Federal laws only supplement the authority of the States; and that means that they preserved all of the States' authority that they had before IRCA in the area of farm labor contractors.
And that I think is reinforced by the legislative history that -- that again reinforces that those have been preserved through IRCA.
This is an area that has traditionally been within the mainstream of State police power.
We acknowledge that Congress does have the authority to preempt us, but they left important discretion in terms of our ability to impose sanctions through licensing and similar laws, and we are doing so by establishing this scheme that provides for the suspension and revocation of State licenses.
It's an important part of the balance that Congress struck when it enacted IRCA by addressing what State authority would exist after that congressional enactment.
We think the lower courts properly determined the scope of that provision and unless there are further questions, I thank you for your attention this morning.
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Phillips, you have 3 minutes remaining.
REBUTTAL ARGUMENT OF CARTER G. PHILLIPS ON BEHALF OF THE PETITIONERS
Mr. Phillips: Thank you, Mr. Chief Justice, and once again, may it please the Court:
I want to begin frankly where Justice Sotomayor pointed me to before, which is the question of whether or not there really is a basis for allowing the States to independently investigate and to independently adjudicate these matters.
And what is the evidence that Congress did not intend that?
Justice Breyer quoted from the House report, recognizing not everybody accepts that; but it does seem to me to articulate a very commonsense limitation that says you have to have a Federal adjudication in the first instance and once you have got that then the State is allowed to add that sanction.
That -- that principle it seems to me is reinforced by the limitation on what you can use the I-9 for.
Justice Alito, you asked that question, but it does seem to me quite clear that what Congress envisioned in 1986 when it adopted this is you are going to have an exclusively Federal enforcement scheme including the adjudicatory process, and it is only in that context you are allowed to use the I-9, and the notion that the State could adopt a standard of intentional or knowingly, and not be able to have the I-9 materials available seems flatly at odds with each other, and therefore it cannot be that Congress intended under those circumstances to allow these matters to be adjudicated in that particular fashion.
Justice Ruth Bader Ginsburg: What can -- Mr. Phillips, what can the State do that would be complementary rather than conflicting?
Mr. Phillips: I -- it seems to me the easiest -- and of course, this has nothing to do with what Arizona does -- but the easiest is, if a -- an employer is convicted of -- of violating IRCA and a criminal sanction, and he happens to be a barber, and the State licensing law says if you are convicted of a -- of a Federal crime you will lose your license, it is available to the State under those circumstances -- and I think this is exactly what Congress had in mind -- to issue a notice to show cause why that particular person shouldn't have the license revoked and then go from there.
Justice Antonin Scalia: Convicted by -- by a Federal Government that hasn't gone after many convictions.
Mr. Phillips: Justice Scalia--
Justice Antonin Scalia: That's the whole problem.
Mr. Phillips: --Well no, but Justice Scalia, it seems to me that the whole question here -- and first of all, I don't think pre-emption can be a moving target.
I think you have to decide it on a basis of what Congress had in front of it in 1986.
But remember, Congress was balancing three, at least, very difficult problems: minimizing problems on the employers, minimizing discrimination against people who are permitted to be hired, and avoiding hiring people who are not permitted to do so.
And how you properly reconcile that is very difficult, but the one thing that seems to me clear is that that was a choice that Congress meant to leave to itself and to the Federal Government to sort out and not to give the States the opportunity to come in where they did.
And just say one last word E-Verify--
Chief Justice John G. Roberts: Well, except -- well, you are just kind of blinking over the Savings Clause -- except through licensing and similar laws.
So that is not a real reservation by Congress of this power to itself.
Mr. Phillips: --Well, if you -- if you interpret the Savings Clause as I do, which means truly as a supplement to Federal -- Federal adjudication, then it is a very narrow limitation on that basis, because at that point you have already invoked the entirety of the Federal scheme and it doesn't modify the balance on those broader legal issues, Your Honor.
Chief Justice John G. Roberts: Thank you, counsel.
The case is submitted.
Justice John G. Roberts, Jr.: The Immigration Reform and Control Act (IRCA), makes it unlawful to knowingly employ and unauthorized alien.
Employers that violate the prohibition may be subjected to federal civil and criminal sanctions.
IRCA also restricts the ability of states to combat employment of unauthorized workers.
The Act provides that States cannot impose civil or criminal sanctions on such employers "other that through licensing and similar laws.”
That's important language, “other than through licensing and similar laws.”
Well, Arizona passed a licensing law known as the Legal Arizona Workers Act.
That law provides that the licenses of state employers that knowingly or intentionally employ unauthorized aliens may be suspended or revoked and in certain circumstances must be suspended or revoked.
The Chamber of Commerce of the United States and various business and civil rights organization, which I will refer to collectively as the Chamber, filed suit to block the law, arguing that it was preempted by federal law or IRCA.
The Federal District Court in Arizona upheld the law and so did the Court of Appeals for the Ninth Circuit.
Now, as just to explain, the federal law expressly preserves, not preempt state authority to impose sanctions through licensing and similar laws.
That is what the Arizona law does.
It instructs courts to suspend or revoke the business licenses of in-state employers that employ unauthorized aliens.
Now, the Chamber argues that when Congress said licensing, what it really meant was a specific type of license such as a license to operate a farm labor contracting business.
But no such limit is even remotely discernible in the statutory text.
We think it pretty unlikely that Congress would say license if what it meant was a license to operate a farm labor contracting business.
The Chamber also argues that when Congress said that States could impose sanctions through licensing laws, what it really meant was that States could only do so after a prior federal adjudication that an employer had hired an unauthorized alien.
But again, such a limitation is nowhere to be found in the federal statute and it is not our job to rewrite the law to put one in.
The Chamber contends that even if the Arizona licensing law is not expressly preempted, it is impliedly preempted.
We will find implied preemption when you put the federal law and the state law side-by-side and the two really can't work together.
In that event, the state law has to yield, but that's not the case here.
Arizona statute simply implements the sanctions that Congress expressly allowed the States to pursue through licensing laws.
And here, Arizona has gone the extra mile by closely tracking the federal laws provisions immaterial respects.
The state law adopts the federal definition of who qualifies as an unauthorized alien.
The state law provides that state investigators must verify the work authorization of an allegedly unauthorized alien with the Federal Government.
The state law requires a state court to consider -- this is a quote, “to consider only the Federal Government's determination of employee status.”
The Chambers asserts that employers will air on the side of discrimination rather than risk having their business licenses revoked by hiring unauthorized workers, but that is not the choice.
An Arizona business has to do a lot more than simply hire an unauthorized alien to have its licenses suspended or revoked.
The hiring has to be knowing or intentional and license termination is an available sanction only for a second knowing or intentional violation during a probationary period imposed for the first violation at the same business location.
The state law also affords employers safe harbors against liability if they comply with certain requirements for checking employee status, even if the employee turns out to be an unauthorized alien.
There's another aspect of the Arizona law that was challenged in this suit.
IRCA also requires employers to take steps to verify an employee's eligibility for employment.
In an attempt to improve that verification process, Congress created what is known as E-Verify, an internet based system that employers can use to check the work authorization status of employees.
The Arizona law requires employers to use E-Verify to check the work -- work authorization status of those that they hire.
Contrary to the Chamber's argument, Arizona's requirement is not preempted.
The federal provision setting up E-Verify contains no language limiting state use of the program in any way.
The Chamber argues that Arizona's use of E-Verify will bog down the operation of the federal system but the Federal Government has expressly rejected that claim.
In fact, the Federal Government encourages employers to use E-Verify.
The Department of Homeland Security says the program is, "The best available means to determine the employment eligibility of new hires."
Now, of course Arizona hopes that its law will result in more effective enforcement of the prohibition on employing unauthorized aliens.
But in preserving to the States the authority to impose sanctions through licensing laws, Congress did not intend to preserve only those state laws that would have no effect.
IRCA expressly reserves to the States the authority to impose sanctions on employers hiring unauthorized workers through licensing and similar laws.
That is what Arizona has done.
It has increased penalties but only for truly egregious violations of the law and has closely track the federal law in determining who is an unauthorized alien.
If even this gives rise to impermissible conflict with federal law, then there really is no way for the State to implement licensing sanctions contrary to the expressed terms of the federal laws and savings clause.
And so we reject the arguments of the Chamber of Commerce and affirm the judgement of the Court of Appeals for the Ninth Circuit.
Justice Thomas joined Parts 1, 2 (a) and 3 (a) of the opinion and concurred in the judgement.
Justice Breyer has filed a dissenting opinion in which Justice Ginsburg joined, and Justice Sotomayor has filed a dissenting opinion.
Justice Kagan took no part in the consideration or decision -- or decision of this case.