Federalism in the 21st Century: The Legal Arizona Worker’s Act

By: Patrick S. Cunningham
(Mr. Cunningham’s full article is available in the Journal’s Summer 2010 issue.)

In less than one week, the Supreme Court will hear arguments on the ever-present issue in American political and legal circles, federalism.  In Chamber of Commerce v. Whiting the Court will decide whether the Legal Arizona Worker’ Act (“LAWA”), a law that allows Arizona to revoke the business licenses of companies that hire undocumented workers, is preempted by federal immigration law.  With the surge of support for State’s rights as demonstrated by the mid-term election success of the Tea Party, combined with Arizona’s newest controversial immigration bill, SB 1070, and the flurry of spin-off legislation, this decision is bound to create a huge impact.  It will likely establish a discernible cairn for legislatures to use as they maneuver their way through the murky doctrine of federalism in the 21st Century.

In 1986, in response to a growing “shadow population” of undocumented immigrants, Congress passed the Immigration Reform and Control Act (“IRCA”).  This act was seen as a curative response to the inadequacies of the anachronistic Immigration and Nationality Act of 1952 (“INA”).  IRCA’s focus was to eliminate the illegal immigrant “magnet” that the old law ignored:  the opportunity for gainful employment.  Laws regulating employers, however, are traditionally under the authority of states.  Thus, the seed of today’s federalism quarrel was sown.

The crux of the dispute at issues comes from a seven-word parenthetical savings clause embedded in IRCA’s express preemption provision.  LAWA’s proponents claim this clause give states the power to enforce their own statutory scheme.  It provides the following:

The provisions of [IRCA] preempt any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.

8 U.S.C. § 1324a(h)(2) (2004) (emphasis add).

In my article The Legal Arizona Worker’s Act: A Threat to Federal Supremacy Over Immigration, I assert that LAWA cannot be reconciled with IRCA, despite the savings clause.  IRCA’s comprehensive statutory scheme regulating the employment of unauthorized workers presents a strong presumption in favor of preemption.  As for the ambiguous savings clause, IRCA’s legislative history makes clear that state supplemental legislation must be enacted to advance IRCA’s regulatory scheme, not an independent state system such as what LAWA presents.  This makes sense when reviewed in light of LAWA’s draconian penalties.  Its statutory scheme is a perfect example of the zero-sum game Congress meant to avoid while drafting IRCA’s preemption clause.  LAWA’s extreme sanctions, revocations of business licenses, gut the federal law in that IRCA, in light of the penalties employers can face under LAWA, has minimal deterrent value.  The existence of these two schemes is incompatible if the premise is that the federal government has plenary control over the nation’s immigration policy.  Arizona should be prohibited from using the proverbial “iron fist” where the federal government has chosen “kid gloves.”

Unfortunately, LAWA has proven to be a survivor.  Both the district court and the Ninth Circuit have upheld the law.  The Ninth Circuit based its conclusion on DeCanas v. Bica, a case decided in 1976 before the enactment of IRCA.  Reliance on DeCanas, however, was misplaced.  It was decided under the rubric of INA, a law that by 1986 and certainly by 2007, was considered wholly inadequate.  Because IRCA replaced INA in 1986 and made the employment of unauthorized workers the central thrust of the national immigration policy, DeCanas should not have been used to support the legality of the Arizona law.

Moreover, LAWA on its face does not fit within the plain meaning of the savings clause.  Proponents claim that the clause proves IRCA does not preempt licensing or similar laws.  However, LAWA, both operationally and facially, is a law regarding immigration and employment.  The act is codified apart from other licensing laws and it affects a broad range of employers regardless of whether they actually hold a business license.  Thus, the Ninth Circuit’s decision is both overly-broad and overly-narrow.  Overly broad in holding that because LAWA references business licenses, it is fundamentally a licensing law outside the scope of IRCA’s preemption provision.  And, overly-narrowly in that the court did not recognize LAWA’s overall purpose:  the curtailment of illegal immigration through state employers

LAWA’s proponents claim that invalidating it would render IRCA’s savings clause superfluous and futile.  This is an oversimplification and distortion of the authority IRCA intended to grant to state regulatory agencies. The parenthetical savings clause of IRCA, as evidenced by the legislative history, was meant to give states the authority to penalize employers violating IRCA.  This was not meant to give a states’ authority to enact their own localized immigration regulations.  By upholding LAWA, the Ninth Circuit has effectively rendered IRCA’s entire statutory scheme futile, except for the savings clause. This zero-sum logic puzzle, in which LAWA either fits in the savings clauses and undermines IRCA or LAWA does not fit and undermines the force of the savings clause, provides further support for the proposition that the savings clause was intended to give states the authority to pass licensing or similar laws for violating IRCA, not for violating independent state laws. Any other interpretation would lead to the complete futility of either federal law of state law.

Arizona’s complaints regarding the effectiveness of IRCA are well founded.  However, its shortcomings speak to the need to update or overhaul federal immigration policy.  Arizona and other such states are not automatically authorized to fill federal legislative gaps via their own statutory schemes.  In enacting IRCA, Congress never envisioned a state-led effort to control immigration. By making employment of undocumented workers the crux of its legislation in 1986, Congress effectively “occupied the field.” Indeed, the failure of the 110th Congress to pass such reforms in 2007 reinforces IRCA’s place as the keystone legislation of our national immigration policy, and further emphasizes the profound interest the federal government has in the employment of undocumented workers.

Although this type of power-sharing conflict is not unique in our political history, the pressing challenges to federalism and the way we think about the relationship between our state and national governments guarantees that the upcoming argument on the 8th of December will be significant.