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BUSINESS AND CORPORATE LAW
		February 2008 Challenges to Arizona’s Immigration Law Unsuccessful … So Far Constitutional and procedural questions make the state’s employer sanctions law a moving target for companies trying to comply Sharon B. Shively

It has been just over six months since the Arizona Legislature passed and Governor Janet Napolitano signed into law HB 2779, “The Legal Arizona Workers Act.” Referred to as the toughest immigration law in the country, the Arizona Employer Sanction Law (as it is more commonly known) has been challenged repeatedly in Federal District Court in Arizona. Despite these numerous challenges, the law officially took effect on January 1, 2008. So, what’s changed? Anecdotally, a lot has happened, notwithstanding that no enforcement measures have occurred.

The first legal challenge was filed, against Arizona’s governor and attorney general, by a coalition of advocacy groups and business interests challenging the law’s constitutionality. On December 7, 2007, that attempt was dismissed by Federal District Court Judge Neil V. Wake, who concluded that the proper defendants were the county prosecutors, because those were the only ones who had the power to enforce the law. Ruling on a procedural basis, Judge Wake did not reach the merits of the statute.

Not surprisingly, the plaintiffs acted quickly to appeal and re-file the suit naming all of the state’s county prosecutors as defendants and moved for a temporary restraining order to forestall the effective date of the law. After argument, the Court ruled that the plaintiffs did not show irreparable harm. In an Order dated December 21, 2007, Judge Wake stated that “[t]he balance of harm tips sharply against plaintiffs, not in their favor.” Moreover, in the hearing, the county prosecutors represented that they could not bring any enforcement provisions until at least February 1, 2008, casting doubt on arguments that the law would hurt anyone in the interim. A full hearing on the merits for a preliminary injunction was held January 16, 2008.

The Court did raise questions regarding the law’s appeal rights and whether an employer has a right to challenge a report from the federal government database that a worker is in the country illegally. Without the right to appeal, due process rights may be impinged in violation of the U.S. Constitution. Moreover, there is concern that businesses can be in violation of the new law by having illegal immigrants already on their payrolls prior to January 1, 2008. This is of particular concern because federal regulations permit use of the E-Verify system solely to check the legal status of new workers and specifically forbids checking the database for existing employees.

While Arizona waits for a decision on the January 16 hearing, anecdotal and newspaper reports seem to suggest that the law is having an effect, both positive and negative. There are reports of workers being laid off and undocumented aliens leaving the state. While that may have been an intended consequence, a number of unintended consequences are also occurring. For example, there are reports of undocumented students and families leaving school districts in unusual numbers. Their departure may negatively affect funding for these school districts for the near future. As Judge Wake stated in his December 21 Order, however:

People disagree whether the great number and continuing flow of unauthorized workers into the United States has more benefits than costs. But no one can disagree that the costs and benefits accrue differently to different people in our society. It is the responsibility of our elected representatives in Congress and in our legislatures to strike the balance among those competing social and economic interests. It is the responsibility of the courts to implement the balance as it has been struck, until it is struck differently.

Until the Judge rules and/or the Legislature acts to amend the statutory scheme, some Arizona employers may continue to be frustrated. At the time this article was written, only about 17,000 of the state’s 150,000 businesses had signed up for E-Verify. While employers that did enroll and are checking the status of new hires may have to terminate those new employees, there is some uncertainty about the process, as the employee has the right to appeal an initial finding that they are in the country illegally. The statute is silent with regard to how employers are supposed to know when an employee is appealing or how an employer will know the results of the appeal. For now, employers are bound to play a complicated game for which the rules, at least in the short term, may be a work in progress..

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