By Linton Joaquin
Executive Director

    A federal district court in eastern Missouri has upheld a local anti-immigrant ordinance that prohibits employers from employing unauthorized workers and sanctions violators by suspending their business permits.  The court rejected the plaintiffs’ contentions that the ordinance is unlawful and preempted by federal law, as well as claims that it violates due process and equal protection.  The ruling directly conflicts with an earlier district court decision in Lozano v. City of Hazleton, 496 F.Supp.2d 477 (M.D.Pa. 2007), which struck down a similar local ordinance.  The Hazleton decision is now on appeal to the Third Circuit Court of Appeals.   The court in Missouri did not address the rulings of the court in Pennsylvania, except to note in a footnote that because it is not bound by the Hazleton decision the court decided to conduct its own analysis.  That analysis would permit states and localities broad freedom to legislate immigration restrictions, and it fails to recognize the federal interest in ensuring uniform regulation in this area.

    The challenged ordinance was enacted by the City of Valley Park in Feb. 2007.  It repealed and replaced two prior ordinances that had imposed restrictions on both landlords and employers, which were challenged in state court. Reynolds v. City of Valley Park, 06-CC-3802 (St. Louis Cnty. Circuit Court).  The new ordinance prohibits businesses from hiring or continuing to employ “an unlawful worker,” or to “permit, dispatch, or instruct” an unlawful worker to perform work in the city.  Employers may not be sanctioned for a violation if they used the Dept. of Homeland Security’s Basic Pilot/E-Verify employment eligibility verification system to verify the work authorization status of the alleged unlawful worker.  Thus, the ordinance provides a powerful incentive for employers to use Basic Pilot/E-Verify, an experimental and voluntary federal program that federal law prohibits the government from requiring employers, except in limited circumstances, to participate in.

    The threshold question in determining if state or local legislation is preempted by federal law is whether Congress in legislating in the area intended to occupy the field.  “Field preemption” can be implied from the comprehensive nature of the federal legislation, but sometimes Congress takes the extra step of stating such intent in an express declaration in the federal statute.  In this case there is an express provision, and its interpretation is the starting point for any analysis.  In establishing federal employer sanctions for the first time in the Immigration Reform and Control Act of 1986 (IRCA), Congress included a strong express preemption provision:  “The provisions of this section 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).

    The Missouri court found that, because the ordinance relates to the issuance of business licenses, it is a “licensing” law within the meaning of the parenthetical exception to the above express preemption provision, opting for a very broad interpretation of the scope of the parenthetical.  In contrast, the Pennsylvania court rejected the conception that simply labeling an ordinance a “licensing” provision allows states and municipalities to create their own schemes for regulating employers who hire unauthorized workers.  Rather, the court concluded that the licensing exception to preemption is a narrow one that only permits localities to revoke a local license “for a violation of the federal IRCA sanction provisions, as opposed to revoking a business license for violation of local laws.”  Lozano, 496 F.Supp.2d at 518.  The court based this conclusion, in part, on IRCA legislative history, which states that IRCA does not preempt “licensing” laws “which specifically require such licensee or contractor to refrain from hiring, recruiting or referring undocumented aliens” and 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 provision in this legislation.”  H.R. Rep. No. 99-682(I), at 58 (1986), 1986 USCCAN 5649, 5662 (emphasis added).

    The two decisions are similarly at odds as to whether implied field preemption applies.  The Missouri court concluded that because Congress added to the express preemption provision an exception “allowing some state licensing regulations to exist” (Gray v. City of Valley Park, 4:07-cv-00881-ERW (E.D.Mo. Jan. 31, 2008) at 23 of slip opinion), Congress could not have intended to preempt the field of regulation in this area.  In contrast, the Pennsylvania court found that the dominant federal interest in the field of immigration, and the comprehensive nature of IRCA’s federal regulation of employment practices concerning immigration, demonstrate the intent to occupy the field to the exclusion of similar state or local laws.  The court relied particularly on the extensive and pervasive nature of IRCA:  “any additions added by local governments would be either in conflict with the law or a duplication of its terms — the very definition of field preemption.”  Lozano, 496 F.Supp.2d at 523.

    With respect to conflict preemption, the Missouri court also found no problems reconciling the local ordinance with IRCA, while the Pennsylvania court found a number of conflicts with the ordinance before it.  If a state law “burdens or conflicts in any manner with any federal laws or treaties,” then it is preempted.  De Canas v. Bica, 424 U.S. 351, 358 n.5 (1976).  Under conflict preemption, a state law is preempted if it “‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’”  English v. General Elec. Co., 496 U.S. 72, 79 (1990).  However, the Missouri court adopted a very limited test for conflict preemption, essentially focusing only on whether the terms of the local ordinance are such that it would be impossible for employers to comply with both the ordinance and IRCA.  Under this standard, the Missouri court did not consider it a conflict that the local ordinance applies to employers of casual domestic workers and of independent contractors, whereas the federal law does not, reasoning that “should the Court conclude that Ordinance No. 1722 required a higher level of verification, this would not prevent an individual from complying with both the local and federal law.”  Gray, at 27 of slip opinion.  Nor was the court troubled by the fact that the ordinance, unlike IRCA, includes no antidiscrimination protections.  Nor did the court find any conflict between the federal law that expressly provides that employer participation in Basic Pilot/E-Verify is voluntary, whereas the ordinance makes such participation a “safe harbor” from sanctions and makes participation mandatory for those found to have previously violated the ordinance.  The court reasoned that, because under federal law employers found to have violated IRCA can be required to participate in Basic Pilot/E-Verify, there is no conflict for Valley Park to impose this requirement on violators of the ordinance. Id. at 32 of slip opinion.

    In its preemption analysis, the Missouri court failed to recognize the comprehensiveness of federal regulation in this area and the fact that IRCA struck a balance among competing interests and objectives.  In enacting IRCA, Congress not only sought to restrict employers from hiring unauthorized workers, but also sought to do so in a way that does not promote discrimination or impose undue burdens on employers to the detriment of the economy.  The Pennsylvania court explained at some length the unique role of the federal government in determining this balance:

In interior enforcement, officials must strike a balance between finding and removing undocumented immigrants without accidentally removing immigrants and legal citizens, all without imposing too much of a burden on employers and workers [citation omitted].  Too stringent of an enforcement system will result in the wrongful removal of United States citizens and legal immigrants [citation omitted].  United States foreign relations is affected by the manner in which the balance is struck. Excessive enforcement jeopardizes our alliances and cooperation with regard to matters such as immigration enforcement, drug interdiction and counter-terrorism investigations [citation omitted].  Accordingly, the United States political system places the responsibility for striking this balance with the United States Congress and the executive branch. [citation omitted]. 

Lozano, 496 F.Supp.2d at 527-28.

    The Pennsylvania court’s observation applies equally to the Valley Park ordinance:  “Thus IRCA and [the local ordinance] share a similar purpose: to prevent the employment of persons not authorized to work in the United States while not overburdening the employer in determining whether an employee or perspective employee is an authorized worker.  The two laws, however, strike a different balance between these interests.  The laws, therefore, conflict.” Lozano, 496 F.Supp.2d at 528.  The Valley Park ordinance, which imposes on employers an extensive regulatory scheme additional to IRCA, presents similar conflicts.

    The Missouri court also concluded that the ordinance’s procedures for finding employers in violation do not violate due process.  The basic process of the ordinance is that, upon receipt of a valid complaint, the Valley Park Enforcement Code Office must request identity information from the employer charged with employing unauthorized workers, and the employer then has three days in which to submit such information, or have its business license suspended.  An employer could request verification of the status of its employees through Basic Pilot/E-Verify, and during the time the verification is underway the license may not be suspended.  The cursory procedure of the ordinance contrasts sharply with IRCA, which provides for notice and a hearing before an employer can be sanctioned for a violation.  The ordinance does not provide the employer with an opportunity to review the contents of the complaint, and the court concluded that no such review is required by due process.  The court also concluded that due process does not require a hearing before the business license can be revoked.  And it rejected the plaintiffs’ equal protection claims, questioning the standing of the plaintiffs to raise such claims, and finding no evidence of discriminatory intent.

    In sum, the Valley Park decision stands in direct conflict with the Hazleton decision, especially with respect to preemption, and the Missouri decision’s preemption analysis is fundamentally flawed. 

Gray v. City of Valley Park, No. 4:07-cv-00881 ERW
(E.D. Mo., Jan. 31, 2008).