April 24, 2009

Court Denies Rehearing in AZ Employer Sanctions Case

Amending its opinion of September 17, 2008, the U.S. Court of Appeals for the Ninth Circuit (“The Court”), denied the Plaintiff-Appellants’ petition for a rehearing or rehearing en banc in the case of CPLC v. Napolitano, ordering that it will not accept any further petitions for rehearing in the matter.

This litigation, filed by several community development and business associations across multiple industries including Chicanos Por La Causa, the U.S. Chamber of Commerce, the Arizona Farm Bureau Federation and the Arizona Landscape Contractors Association, aimed to invalidate the Legal Arizona Workers Act (LAWA) on Federal preemption grounds. LAWA authorizes the Arizona state government to suspend or revoke the business licenses of employers found to have knowingly hired undocumented workers and makes the use of the Federal government’s voluntary employment verification database program (E-Verify) mandatory for all employers as of January 1, 2008. On September 17, 2008, the Court held that the district court was correct in finding that Federal immigration law did not preempt LAWA, and that it had properly characterized it as a licensing measure within the state of Arizona’s authority.

The Plaintiffs argued that the license suspension and revocation sanctions imposed by LAWA impliedly conflicted with Federal immigration law, namely, the Immigration Reform and Control Act of 1986 (IRCA), urging that the LAWA sanctions were harsher than IRCA’s provisions for monetary sanctions, and that such sanctions would conflict with the anti-discrimination intent of the IRCA by actually encouraging employer discrimination. In the amendment to its opinion, the Court rejected this argument, finding in part that “their argument is essentially speculative . . . and we have no record reflecting the Act’s effect on employers.”

To read more about the history of this litigation and LAWA, which grants unprecedented immigration enforcement authority to a state, please see our previous GT Immigration Alert.