Arizona Contractors Ass'n, Inc. v. Napolitano, No. CV07-1355-PHX-NVW.

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
Writing for the CourtNeil V. Wake
Citation526 F.Supp.2d 968
PartiesARIZONA CONTRACTORS ASSOCIATION, INC., an Arizona nonprofit corporation; Arizona Employers for Immigration Reform, Inc., an Arizona non-profit corporation; Chamber of Commerce of the United. States of America, a Washington D.C. non-profit corporation; Arizona Chamber of Commerce, an Arizona non-profit corporation; Arizona Hispanic Chamber of Commerce, Inc., an Arizona nonprofit corporation; Arizona Farm Bureau Federation, an Arizona non-profit corporation; Arizona Restaurant and Hospitality Association, an Arizona non-profit corporation; Associated Minority Contractors of America, an Arizona non-profit limited liability company; Arizona Roofing Contractors Association, an Arizona non-profit corporation; National Roofing Contractors' Association, an Illinois not-for-profit corporation; Wake Up Arizona! Inc., an Arizona non-profit corporation; and Arizona Landscape Contractors Association, Inc., an Arizona non-profit corporation, Plaintiffs, v. Janet NAPOLITANO, Governor of the State of Arizona; Terry Goddard, Attorney General of the State of Arizona, Defendants. Chicanos Por La Causa, Inc.; and Somos America, Plaintiffs, v. Janet Napolitano, in her official capacity as Governor of the State of Arizona; Terry Goddard, in his official capacity as Attorney General of the State of Arizona; and Gale Garriott, in his official capacity as the Director of the Arizona Department of Revenue, Defendants.
Docket NumberNo. CV07-1355-PHX-NVW.,No. CV07-1684-PHX-NVW.
Decision Date07 December 2007
526 F.Supp.2d 968
ARIZONA CONTRACTORS ASSOCIATION, INC., an Arizona nonprofit corporation; Arizona Employers for Immigration Reform, Inc., an Arizona non-profit corporation; Chamber of Commerce of the United. States of America, a Washington D.C. non-profit corporation; Arizona Chamber of Commerce, an Arizona non-profit corporation; Arizona Hispanic Chamber of Commerce, Inc., an Arizona nonprofit corporation; Arizona Farm Bureau Federation, an Arizona non-profit corporation; Arizona Restaurant and Hospitality Association, an Arizona non-profit corporation; Associated Minority Contractors of America, an Arizona non-profit limited liability company; Arizona Roofing Contractors Association, an Arizona non-profit corporation; National Roofing Contractors' Association, an Illinois not-for-profit

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corporation; Wake Up Arizona! Inc., an Arizona non-profit corporation; and Arizona Landscape Contractors Association, Inc., an Arizona non-profit corporation, Plaintiffs,
v.
Janet NAPOLITANO, Governor of the State of Arizona; Terry Goddard, Attorney General of the State of Arizona, Defendants.
Chicanos Por La Causa, Inc.; and Somos America, Plaintiffs,
v.
Janet Napolitano, in her official capacity as Governor of the State of Arizona; Terry Goddard, in his official capacity as Attorney General of the State of Arizona; and Gale Garriott, in his official capacity as the Director of the Arizona Department of Revenue, Defendants.
No. CV07-1355-PHX-NVW.
No. CV07-1684-PHX-NVW.
United States District Court, D. Arizona.
December 7, 2007.
As Amended December 10, 2007.

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David A. Selden, Heidi Nunn-Gilman, Julie A. Pace, Ballard Spahr Andrews & Ingersoll LLP, Daniel Joseph Pochoda, ACLU, Phoenix, AZ, Louis R. Moffa, Jr., Ballard Spahr Andrews & Ingersoll LLC, Voorhees, NJ, Cynthia Ann Valenzuela,

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Kristina Michelle Campbell, MALDEF, Karen Cassandra Tumlin, Linton Joaquin, Monica Teresa Guizar, National Immigration. Law Center, Los Angeles, CA, Jennifer C. Chang, Lucas Guttentag, ACLU Foundation Immigrants Rights Project, Jonathan Weissglass, Stephen Paul Berzon, Altshuler Berzon LLP, Omar. C. Jadwat, ACLU, Immigrants Rights Project, New York, NY, for Plaintiffs.

Christopher Arthur Munns, Mary Ruth O'Grady, Office of the Attorney General, Gregg Jay Tucek, Sherman & Howard LLC, Phoenix, AZ, Christina B. LaBrie, Fragomen Del Rey Bernsen & Loewy LLP, New York, NY, Patrick P. Shen, Fragomen Del Rey Bernsen & Loewy LLP, Washington, DC, for Defendants.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER

NEIL V. WAKE, District Judge.


Plaintiffs challenge the Legal Arizona Workers Act, A.R.S. §§ 23-211 through 214, enacted July 2, 2007, and effective January 1, 2008. 2007 Ariz. Sess. Laws, Ch. 279. The Act provides the superior courts of Arizona with the power to suspend or revoke the business licenses of employers who intentionally or knowingly employ an unauthorized alien. By agreement of the parties, the two cases were consolidated and accelerated for trial on November 14, 2007, on stipulated facts and written evidence. Defendants' motions to dismiss were deferred to the trial. This order states findings of fact and conclusions of law pursuant to. Rule 52(a), Fed. R.Civ.P.

There is no justiciable case or controversy against these Defendants. Plaintiffs do not intentionally or knowingly employ any unauthorized aliens, and they have no plans to. They bear no imminent threat of enforcement. Only county attorneys are authorized to enforce the Act. These Defendants— the Governor, the Attorney General, and the Director of the Department of Revenue—have only investigatory or informational authority under the Act, and they have not made even empty threats to prosecute anyone.

Verifying the employment eligibility of new hires through the federal E-Verify program has some costs for employers. The federal government makes. E-Verify available, but the State mandates its use. Although the State's mandate to use Verify has no direct enforcement or enforcer, the Act indirectly forces employers to obtain powerful evidence of workers' authorization from the federal government. The plausible consequence for refusing to use E-Verify may be that employers also cannot prove their good faith compliance with the 1-9 process because the E-Verify system would have exposed the employee's lack of authorization. An employer who foregoes the mandated E-Verify evidence may be left with little or no evidence that matters. For this reason, participation in E-Verify is not a free choice even though there is only a general threat of enforcement proceedings, and even though Plaintiffs' failure to participate in E-Verify does not increase appreciably the likelihood of enforcement proceedings against them. The Act forces them to enroll in E-Verify because if they do not enroll now they face near certain and intolerable harm in the event of a future enforcement proceeding.

Yet the court cannot redress that internal coercion with a judgment against these Defendants. The State officers do not cause the intolerable risk that Plaintiffs may have no defense if they forego the Verify evidence. That risk finds its sting only at the hands of a county attorney, the only official empowered to bring a future enforcement proceeding.

This action must be dismissed without prejudice for lack of subject matter jurisdiction,

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there being no justiciable case or controversy against the Defendants.

I. Employer Sanctions in the Federal Government's Immigration Reform and Control Act and E-Verify

A. Summary of the IRCA

Federal law first created sanctions for employers of unauthorized aliens in the Immigration Reform and Control Act (IRCA), enacted in 1986. Before then, federal law did not displace State authority to enact and enforce sanctions against employers of unauthorized aliens except to the extent the State law conflicted with federal enactments. De Canal v. Bica, 424 U.S. 351, 96 S.Ct. 933, 47 L.Ed.2d 43 (1976). The central provisions of IRCA are codified at 8 U.S.C. §§ 1324a through 1324c. With certain exclusions, it is unlawful to hire or continue to employ a person known to be an unauthorized alien. 8 U.S.C. § 1324a(a)(1)(A) and (a)(2). An unauthorized alien is one who is not "either (a) an alien, lawfully admitted for permanent residence, or (B) authorized to be so employed by this Act [IRCA] or by the Attorney General." § 1324a(h)(3).

The IRCA also requires employees and employers to comply with a paper-based employment eligibility verification system set out in 8 U.S.C. § 1324a(b), known as the 19 system. Employees must swear to their authority to work, and employers must examine certain wide classes of identification documents recorded on Form I-9. An identification document is sufficient if it "reasonably appears on its face to be genuine." § 1324a(b)(1)(A). Employers must keep records of compliance with the 1-9 system. § 1324a(b)(1)(3). An employer's good faith attempt to comply suffices notwithstanding a technical or procedural failure unless the employer has engaged in a pattern or practice of violations or fails to correct an error after the government points it out. § 1324a(b)(6).

The IRCA entrusts its enforcement to the Attorney General with hearings before specially selected administrative law judges, subject to federal judicial review. § 1324a(e). The government must prove by a preponderance of the evidence that the employer knowingly hired or retained an unauthorized alien, but it is "an affirmative defense" that the employer "complied in good faith" with the 1-9 system mandated by § 1324a(b), § 1324a(a)(3) and 1324a(e)(3)(C). Remedies include cease and desist orders and civil fines from $250 to $2,000 for a first order, $2,000 to $5,000 for a second order, and $3,000 to $10,000 for a further order. Other remedial action may be ordered. § 1324a(e)(4). The Attorney General may seek enforcement of orders in a federal district court. § 1324a(e)(9). For a pattern or practice of violations a criminal fine up to $3,000 and imprisonment up to six months can be imposed. The Attorney General may also seek civil injunctive relief. § 1324a(f).

Central to Plaintiffs' challenges in this case is the preemption clause of 8 U.S.C. § 1324a(h)(2), which provides, "The provisions of this section [8 U.S.C. § 1324a] preempt any State or local law imposing civil or criminal sanctions (other than through licensing or similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens."

Other sections prohibit document fraud and employment discrimination based on national origin or legal immigration status, with enforcement procedures, tribunals, and remedies. 8 U.S.C. § 1324b and 1324c. There are other provisions that need not be reviewed to understand the justiciability issues in this case.

B. Failure of the 1-9 System

As the Congressional Research Service Report to Congress dated April 20, 2007,

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concludes, "There is general agreement that the I-9 process has been undermined by fraud—both document fraud, in which employees present counterfeit or invalid documents, and identity fraud, in which employees present valid documents issued to other individuals." (Joint Statement of Facts, Doc. # 72 (Facts), Ex. 15 at 3.) The result of the failure of the 1-9 system and other causes is that "an estimated 7.2 million unauthorized workers were in the U.S. civilian labor force in March 2005, representing about 5% of the labor force." (Id. at 1.) The unauthorized resident alien population "has grown at an average annual rate of more than 500,000 per year." (Id.) As the director of immigration policy for Plaintiff U.S. Chamber of Commerce testified before Congress last June, "Current immigration laws are severely flawed and have failed to curb the flow of undocumented workers into the U.S." (Facts, Ex 22J at 3.)

C. E-Verify

Building on the 1-9 system, the Illegal Immigration Reform and Immigrant...

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4 practice notes
  • Arizona Contractors Ass'n Inc. v. Candelaria, No. CV07-02496-PHX-NVW.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • February 7, 2008
    ...under Article III of Page 1041 the United States Constitution. Arizona Contractors Ass'n v. Napolitano (Arizona Contractors I), 526 F.Supp.2d 968 (D.Ariz, 2007). Plaintiffs appealed that judgment of dismissal and sought an injunction pending appeal. They concurrently filed this action (Ariz......
  • Mont. Shooting Sports Ass'n v. Holder, No. 10–36094.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • August 23, 2013
    ...The economic costs of complying with a licensing scheme can be sufficient for standing. Ariz. Contractors Ass'n, Inc. v. Napolitano, 526 F.Supp.2d 968, 979 (D.Ariz.2007) (holding that plaintiffs had demonstrated they would sustain economic injury if the law forced them to use E–Verify), aff......
  • Mont. Shooting Sports Ass'n v. Holder, No. 10-36094
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • August 23, 2013
    ...The economic costs of complying with a licensing scheme can be sufficient for standing. Ariz. Contractors Ass'n, Inc. v. Napolitano, 526 F. Supp. 2d 968, 979 (D. Ariz. 2007) (holding that plaintiffs had demonstrated they would sustain economic injury if the law forced them to use E-Verify),......
  • CDK Glob. LLC v. Brnovich, No. CV-19-04849-PHX-GMS
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • April 2, 2020
    ...claims must be ripe for review, and the harm must be redressable against the defendants." Ariz. Contractors Ass'n, Inc. v. Napolitano, 526 F. Supp. 2d 968, 977 (D. Ariz. 2007) (citing Renne v. Geary, 501 U.S. 312, 320 (1991), as amended (Dec. 10, 2007), corrected, No. CV07-1355-PHX-NVW, 200......
4 cases
  • Arizona Contractors Ass'n Inc. v. Candelaria, No. CV07-02496-PHX-NVW.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • February 7, 2008
    ...under Article III of Page 1041 the United States Constitution. Arizona Contractors Ass'n v. Napolitano (Arizona Contractors I), 526 F.Supp.2d 968 (D.Ariz, 2007). Plaintiffs appealed that judgment of dismissal and sought an injunction pending appeal. They concurrently filed this action (Ariz......
  • Mont. Shooting Sports Ass'n v. Holder, No. 10–36094.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • August 23, 2013
    ...The economic costs of complying with a licensing scheme can be sufficient for standing. Ariz. Contractors Ass'n, Inc. v. Napolitano, 526 F.Supp.2d 968, 979 (D.Ariz.2007) (holding that plaintiffs had demonstrated they would sustain economic injury if the law forced them to use E–Verify), aff......
  • Mont. Shooting Sports Ass'n v. Holder, No. 10-36094
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • August 23, 2013
    ...The economic costs of complying with a licensing scheme can be sufficient for standing. Ariz. Contractors Ass'n, Inc. v. Napolitano, 526 F. Supp. 2d 968, 979 (D. Ariz. 2007) (holding that plaintiffs had demonstrated they would sustain economic injury if the law forced them to use E-Verify),......
  • CDK Glob. LLC v. Brnovich, No. CV-19-04849-PHX-GMS
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • April 2, 2020
    ...claims must be ripe for review, and the harm must be redressable against the defendants." Ariz. Contractors Ass'n, Inc. v. Napolitano, 526 F. Supp. 2d 968, 977 (D. Ariz. 2007) (citing Renne v. Geary, 501 U.S. 312, 320 (1991), as amended (Dec. 10, 2007), corrected, No. CV07-1355-PHX-NVW, 200......

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