Appeal Has Been Filed. At the end of the day on February 7, 2008, the United States District Court for the District of Arizona ("District Court" or the "Court") upheld the Legal Arizona Workers Act ("LAWA" or "the Act") against the constitutional challenge brought by 11 business groups, as well as other business and civic groups. The following morning, February 8, 2008, Plaintiffs filed an appeal of the District Court's decision, and pending the decision on the appeal, Plaintiffs seek an injunction from the District Court and seek an emergency stay from the Ninth Circuit, which if granted would stop the law from being in effect during the time that the District Court's opinion is being appealed.

During the trial before U.S. District Court Judge Neil V. Wake, the County Attorneys pledged that they would not start prosecutions under LAWA until after March 1, 2008 (unless they provided advance notice to provide Plaintiffs the opportunity to seek a temporary restraining order). Therefore, Plaintiffs are requesting a decision from the Ninth Circuit on the injunction pending appeal by March 1, 2008.

Additionally, in the first lawsuit challenging LAWA, Arizona Contractors Association, et al., v. Napolitano, et al., the appeal to the Ninth Circuit and the request for an emergency stay is already pending before the Ninth Circuit. The Ninth Circuit delayed its decision regarding the emergency stay in the first lawsuit until after the District Court issued its opinion in the second lawsuit. The Ninth Circuit will now have both cases to decide, probably on a consolidated basis.

The District Court Stated That a Facial Challenge is a "Heavy Burden," but Left the Door Open to an "As Applied" Challenge. In its opinion, the District Court emphasized that Plaintiffs faced a heavy burden in seeking to have the Act invalidated at the outset as facially unconstitutional. The opinion left available the possibility that parts of the Act may be unconstitutional "is applied" and could be challenged when a company is actually prosecuted under the law. For example, a company whose Articles of Incorporation were revoked under the Act could challenge the Act's inclusion of Articles of Incorporation within the definition of "licenses" as exceeding the authority of the states to impose sanctions via "licensing and similar laws" on employers who employ unauthorized aliens.

The District Court Held that States Can Require E-Verify. The Court affirmed LAWA's requirement that all companies in Arizona use E-Verify. The opinion recognized that federal law prohibits the federal government from requiring E-Verify, but held that such a restriction, "[w]ithout more [does not] raise an inference that Congress intended to prevent the states from mandating use of the system in their licensing laws."  The opinion also discussed the extra protection provided to employers who use E-Verify if they are prosecuted for a violation of LAWA.

Employers who have not enrolled in E-Verify still have the options discussed in our legal alert dated December 21, 2007. Remember that companies cannot use E-Verify with existing employees. Companies cannot use E-Verify before the employee is hired. If a company is not hiring employees until after March 1, 2008, and does not want to use E-Verify, it could wait until after the Ninth Circuit makes a decision on the motion for injunction pending appeal before enrolling in E-Verify.  The Ninth Circuit decision should occur this month.

The District Court Found that LAWA Provides Due Process Because Superior Courts Can Consider All Evidence During a Prosecution Under LAWA. In upholding LAWA, the Court sometimes took a narrow interpretation of the Act and sometimes a very expansive one. LAWA says that "on determining whether an employee is an unauthorized alien, the court shall consider only the federal government’s determination pursuant to 8 United States Code section 1373(c)."  Plaintiffs argued that the law violates employers' due process rights because employers neither participate in nor have a right to challenge the information from the federal government that is the basis for the prosecutions under state law. The District Court held that despite the above language that says the only evidence that may be considered is the federal information (which is a computer response), in prosecutions in Superior Court under LAWA, employers could offer all evidence relevant to their defense.

Compliance with Federal Immigration Laws. It is increasingly important that employers ensure they are complying with federal immigration laws. We strongly recommend having an immigration compliance policy, conducting I-9 and immigration compliance audits, and implementing strategies to respond to Social Security mismatch information, among other strategies. Companies should make sure to train employees who complete I-9s, should consider designating an employee to have immigration compliance responsibilities, and should make sure procedures are in place to address government investigations or inquiries by third parties. Ballard Spahr also has I-9 overlay templates available that supervisors can use to double-check their review or audit to make sure the I-9s are fully complete. The federal government is stepping up immigration enforcement, even as more and more states and local governments are adopting employer sanctions laws for immigration compliance.


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