May 26 (Bloomberg) -- The U.S. Supreme Court, in a rebuff to businesses and the Obama administration, upheld an Arizona law that threatens companies with the revocation of their corporate charters if they hire illegal immigrants.
In a 5-3 ruling, the justices said a federal law governing immigrant hiring leaves room for states to impose their own penalties for non-compliance, even by stripping away a company’s license to do business.
The breakdown might foreshadow the outcome should the high court consider a separate Arizona law giving local police a greater role in arresting illegal immigrants. The court’s five Republican appointees formed the majority today, buttressing state power and rejecting the type of business concerns they often support in other contexts.
“License suspension and revocation are significant sanctions,” Chief Justice John Roberts wrote in the court’s lead opinion. “But they are typical attributes of a licensing regime” imposed by states.
Roberts said the Arizona law allows the so-called business death penalty only for the most egregious cases, involving at least two intentional violations.
“An employer acting in good faith need have no fear of the sanctions,” he wrote. So far, Arizona officials have filed only a handful of enforcement actions against employers.
The Chamber of Commerce joined with civil rights groups and a labor union in challenging the Arizona law. The Obama administration also said the law should be struck down.
Arizona is one of nine states with laws punishing businesses for hiring unauthorized workers, and today’s ruling might spur enactment of similar laws elsewhere. In the first quarter of this year, state lawmakers introduced 279 employment-related immigration bills, according to a report by the National Conference of State Legislatures.
The justices also upheld Arizona’s requirement that employers participate in E-Verify, a system designed to allow confirmation of worker eligibility for employment through federal databases. The system is voluntary under U.S. law.
Justices Antonin Scalia, Clarence Thomas, Anthony Kennedy and Samuel Alito formed the majority with Roberts, with Thomas joining only some of the chief justice’s reasoning.
Opponents of the law said the ruling was a narrow one that doesn’t necessarily mean states can enact other types of immigration restrictions.
No ‘Blank Check’
“We are disappointed by the Supreme Court’s ruling, but let’s be clear: The decision does not give states or local governments a blank check to pass any and every immigration law,” said Robin Conrad, who runs the Chamber of Commerce’s litigation unit. “Immigration regulation continues to be predominantly a federal concern.”
Roberts steered clear of sweeping language that might directly affect other immigration cases. He focused his 27-page opinion on a 1986 federal statute that bars states and cities from penalizing employers for hiring illegal aliens except through “licensing and similar laws.”
Arizona’s law “falls well within the confines of the authority Congress chose to leave to the states,” Roberts wrote.
Even so, the court made clear that states can play a role in fighting illegal immigration.
“It’s not excluding the states completely,” said Peter Spiro, a law professor at Temple University in Philadelphia who specializes in immigration law. “It’s not ousting the states from taking any action with respect to immigration.”
The ruling “provides a realistic road map for states to take appropriate action in enacting legislation that is constitutional,” said Jay Sekulow, chief counsel of the American Center for Law and Justice in Washington, which supported Arizona in the case.
Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor -- all Democratic appointees -- dissented, saying the federal law pre-empts the state statute. Breyer said Congress was balancing competing interests -- among them, discouraging employers from discriminating in hiring -- when it put in place more limited federal penalties for violators.
“Why would Congress, after carefully balancing sanctions to avoid encouraging discrimination, want to allow states to destroy that balance?” Breyer wrote for himself and Ginsburg.
Justice Elena Kagan didn’t take part because she played a role in the litigation as a lawyer in President Barack Obama’s administration.
The other Arizona law is on hold after a federal appeals court said the state was interfering with the federal government’s authority over immigration policy. Arizona Governor Jan Brewer, a Republican, said earlier this month that she will appeal to the Supreme Court.
That measure, known as S.B. 1070, requires local police officers to check immigration status when they arrest or stop someone and have “reasonable suspicion” that the person is in the country illegally. The law also requires registered aliens to carry documentation with them at all times.
The Arizona police law was the first of its kind. Almost two-dozen states have considered similar measures, drawing lawsuits and opposition from business groups.
Today’s ruling provides only limited guidance as to what the Supreme Court will do with the police law, Spiro said. The odds that the court will uphold the measure “have gone up with this decision, but I’m not sure how much they’ve gone up,” Spiro said.
Opponents of the Arizona measures were more categorical.
“The decision is a narrow one that only upholds a specific Arizona law based on the court’s view that the law was expressly authorized in the federal statute,” said Omar Jadwat, an immigration attorney with the American Civil Liberties Union. “The decision has nothing to do with S.B. 1070 or any other state or local immigration law.”
The case is Chamber of Commerce v. Whiting, 09-115.
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