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April 30, 2015

Local Government Regulation of Immigration

Terrence S. Welch

Few issues in the United States are as contentious as illegal immigration. With immigration reform stalled in Congress, many state and local governments have attempted to fill the void, with results that are or may be either legally questionable or plainly unconstitutional. While immigration attorneys can assist individuals in understanding the “nuts and bolts” of immigration law, this article will focus on immigration law issues and the ability (or perhaps inability) of a city to address them.

Although various cities around the nation have enacted fairly comprehensive regulatory schemes to address illegal immigration, the experiences of Hazleton, Pennsylvania, and Farmers Branch, Texas, should make most cities shy away from doing so. The litigation involving both cities is described below, and to date, neither city has been successful in its efforts to address illegal immigration issues.

Background

Let’s review a little history about the origins of state and local policies on immigration. Efforts to regulate immigration and its effects at the state and local level in the United States date back to at least the 19th century and in fact predate federal laws controlling immigrant admission to the United States. Laws passed by the State of New York in 1824 and 1847 gave the Mayor of New York City the power to register immigrants and collect bonds and taxes against their use of public support. Although these laws were not used to restrict the numbers of immigrants entering the city, they occasioned some of the first Supreme Court cases outlining federal supremacy on immigration issues.1

The national rise of the “Know Nothing” Party and violent conflicts between primarily Irish Catholic immigrants and Protestant natives made immigration an important issue in many cities in the 1850s. The Know Nothings had some limited successes in municipal politics, such as the election in Chicago of Mayor Levi Boone. Mayor Boone, who took office vowing to exclude immigrants from city employment, used liquor-licensing laws to combat immigrant-run taverns, which had provided a base for immigrants to organize politically. Immigration continued to be a minor issue at the local level into the 20th century. During World War I, a number of localities responded to anti-German sentiment by declaring English to be their official language. Later, as debates about immigration flared in the mid-1980s, a limited number of counties and municipalities followed many states and the U.S. Congress and debated making English their government’s official or exclusive language. Only a handful reportedly passed such measures.2

In 1986, Congress enacted the Immigration Reform and Control Act (IRCA),3 “a comprehensive scheme prohibiting the employment of illegal aliens in the United States.”4 IRCA generally required that employers attest to their employees’ immigration status, made it illegal to hire or recruit illegal immigrants, and legalized those illegal immigrants who entered the United States before January 1, 1982, and had continuous residence in the United States, among other requirements. Since that time, in apparent frustration over the enforcement (or lack thereof) of immigration laws by the federal government, municipalities across the United States have enacted ordinances that penalize employers of unauthorized workers as well as property owners who lease property to undocumented immigrants. These municipal ordinances have led to a conflict between federal authority, which traditionally regulates immigration, and local authority, which traditionally regulates employment and housing.5

For example, in the spring of 2006 in San Bernardino, California, immigration “restrictionists” attempted a ballot initiative that would have fined landlords who rented housing to unauthorized immigrants. The initiative also would have made English the only language used in city business and would have regulated the hiring of day laborers. Although the San Bernardino ballot initiative failed to gain enough signatures to be placed on the ballot,6 not long thereafter Hazleton, Pennsylvania, stepped to the head of the line in attempting to restrict illegal immigration. Without exception, reviewing courts have struck down these local regulations as impermissible forays into an area of the law reserved to the federal government, and although advocates for municipal ordinances held hope that the United States Supreme Court’s recent decisions on Arizona’s illegal immigration statutes7 would offer support, as discussed below, that in fact has not been the case.

Hazleton, Pennsylvania

In the forefront of local regulation of illegal immigration is the City of Hazleton, Pennsylvania. Its 2006 ordinances, denoted as the Illegal Immigration Relief Act (IIRA), penalized (1) employers who employed unauthorized workers and (2) landlords who leased property to undocumented noncitizens. In brief, its ordinances provided that on receipt of a written and signed complaint, a city agency would request identity information from an employer (and suspend the license of any business that did not comply within three business days) and would thereafter submit the documentation to the federal government to verify the worker’s immigration status. A “safe harbor” provision provided immunity for businesses that verified a worker’s immigration status using what is now known as E-Verify.

Hazleton’s ordinance regarding a landlord suspected of leasing property to an undocumented immigrant was similar to the employer sanctions procedures: any person could file a written complaint, a city agency would verify the tenant’s immigration status with the federal government, and the landlord would have five days to evict a tenant after notification of a violation. If the landlord did not comply, the landlord faced a license suspension during which he or she could not collect rent from any tenants.

While sparing the reader a detailed discussion of federal preemption, it is clear that Congress may expressly forbid states from regulating a specified area of law. Through federal immigration legislation, Congress has used its power to expressly preempt states and local governments from imposing criminal and civil penalties on employers of unauthorized workers. Congress also may impliedly preempt states and local governments from legislating in a particular area. The federal government’s intention to occupy an entire field of law can preempt any local legislation in that field, and a conflict between local and federal law and policy also will preempt local legislation.8 In brief, there is express preemption, implied field preemption, and conflict preemption, all of which were addressed by the federal district and appellate courts in response to Hazleton’s ordinances.

Express Preemption

When a litigant challenges a local law as preempted by federal law, a court should consider whether Congress has enacted a specific preemption provision and determine whether the local law falls within the area proscribed by that provision.9 On this ground, a federal district court in the Middle District of Pennsylvania struck down the Hazleton ordinance barring the employment of unauthorized workers as unconstitutional, holding that Congress expressly preempted the Hazleton ordinance by its enactment of 8 U.S.C. § 1324a(h)(2).10

The City of Hazleton had argued that it complied with applicable federal requirements by sanctioning employers with a license suspension rather than a criminal or civil penalty; however, the federal district court rejected that argument because “[i]t would not make sense for Congress in limiting the state’s authority to allow states and municipalities the opportunity to provide the ultimate sanction, but no lesser penalty.”11 The federal district court relied on that section’s specific legislative history to establish the scope of the savings clause in § 1324a(h)(2), concluding that the savings clause permits states and municipalities to suspend business licenses only for violations of the federal Immigration Relief and Control Act (IRCA), not local regulations.

Implied Field Preemption

A court also may strike down a local law if the subject matter inherently leaves no room for local regulation. “Implied field pre-emption occurs when state or local governments attempt regulation in a field which Congress has implied an intent to exclusively occupy.”12 Using this field-preemption theory, the Lozano federal district court held that the Hazleton IIRA was invalid. Two factors controlled this outcome: (1) a strong federal interest in the field of immigration and (2) the pervasiveness of federal regulations in the field of immigration.

Conflict Preemption

“Implied conflict pre-emption occurs where it is ‘impossible . . . to comply with both state and federal law.’ . . . ‘Impossibility’ conflict pre-emption exists only where it is truly impossible to comply with both federal and state law.”13 The Lozano federal district court also held that the Hazleton IIRA was invalid under a conflict preemption theory. The court noted that although IRCA and the Hazleton IIRA have a similar purpose—penalizing employers of unauthorized workers—they use different means to achieve that purpose. While federal law requires employers to review a worker’s documents and use an I-9 Employment Eligibility Verification Form to establish worker eligibility, the Hazleton IIRA also required the employer to present the worker’s documents to the local Code Enforcement Office, which determined the status of the worker by contacting the federal government.

The Hazleton IIRA also conflicted with IRCA by failing to contain an exception for casual domestic workers and independent contractors. Moreover, the Hazleton IIRA mandated use of the Basic Pilot Program (now E-Verify), while federal law makes use of the program optional. Finally, the time frame for employers to respond to alleged violations also varied under the Hazleton IIRA and IRCA. The federal district court further found a conflict in how the United States and Hazleton balanced the interests of preventing illegal employment and protecting the rights of businesses and workers—the Hazleton IIRA placed greater burdens on employers, in the interest of preventing illegal employment than does IRCA.14

The Third Circuit affirmed the district court in part and vacated in part; however, the portion of the district court opinion that was vacated related solely to a somewhat technical standing issue. The court noted that the Hazleton ordinances “are pre-empted by federal immigration law and unconstitutional under the Supremacy Clause.”15

With regard to the invalidation of the Hazleton ordinance’s employment provisions, the Third Circuit wrote that “it is undisputable that Congress went to considerable lengths in enacting IRCA to achieve a careful balance among its competing policy objectives of effectively deterring employment of unauthorized aliens, minimizing the resulting burden on employers, and protecting authorized aliens and citizens perceived as ‘foreign’ from discrimination. The IIRAO substantially undermines this careful balance.”16 The court was concerned that if the employment provisions of the Hazleton ordinance were upheld, the result could be chaotic:

Under the IIRAO, a business in Hazleton must worry about two separate systems of complaints, investigations, prosecutions, and adjudications. Furthermore, Hazleton’s ordinance is not the only consideration here, given the emerging landscape of local and state regulation in the area. . . . If Hazleton’s ordinance is permissible, then each and every state and locality would be free to implement similar schemes for investigating, prosecuting, and adjudicating whether an employer has employed unauthorized aliens. . . . As noted above, many states and localities have already tried. A patchwork of state and local systems each independently monitoring, investigating, and ultimately deciding—all concurrently with the federal government—whether employers have hired unauthorized aliens could not possibly be in greater conflict with Congress’s intent for its carefully crafted prosecution and adjudication system to minimize the burden imposed on employers.17

Similarly, the Third Circuit held that Hazleton’s ordinances penalizing landowners for leasing property to undocumented immigrants conflicted with federal law and were void. While addressing how Hazleton’s illegal immigrant employment provisions were of a fundamentally different nature than Hazleton’s housing provisions, nonetheless preemption applied:

Although we realize that a state certainly can, and presumably should, regulate rental accommodations to ensure the health and safety of its residents, and that such regulation may permissibly affect the rights of persons in the country unlawfully, . . . we cannot bury our heads in the sand ostrich-like ignoring the reality of what these ordinances accomplish. Through its housing provisions, Hazleton attempts to regulate residence based solely on immigration status. Deciding which aliens may live in the United States has always been the prerogative of the federal government. Hazleton purposefully chose to enter this area of “significant federal presence.”18

Thus, the housing provisions of Hazleton’s ordinances were field preempted and precluded state and federal efforts, “whether harmonious or conflicting, to regulate residence in this country based on immigration status.”19

Not surprisingly, Hazleton sought United States Supreme Court review. On June 11, 2011, the Court vacated the judgment of the Third Circuit and remanded the case for further consideration in light of Chamber of Commerce of the United States v. Whiting,20 issued by the Supreme Court on May 26, 2011. In that case, the Supreme Court held that the provisions of Arizona law allowing suspension and revocation of business licenses fell within the savings clause of IRCA, was not impliedly preempted for conflicting with federal law and the requirement that every employer verify the employment eligibility of hired employees through a specific Internet-based system (E-Verify) did not conflict with federal law.

On remand, the Third Circuit again addressed “whether federal law pre-empts the employment and/or housing provisions of the Hazleton ordinances.”21 Not surprisingly, the Third Circuit held that the employment provisions of the Hazleton city ordinance were preempted under the doctrine of conflict preemption; the housing provisions were preempted under the doctrines of conflict and field preemption; and the ordinance’s rental registration scheme was preempted under the doctrine of field preemption.

While the battle over municipal regulation of immigration was being fought in Pennsylvania, halfway across the country a North Texas suburban community entered the fray, adopting a controversial ordinance that regulated immigrants’ rental housing.

Farmers Branch, Texas

Farmers Branch is a Dallas suburb, located immediately north of Dallas. Its “active citizens,” seeking “to regulate non-citizens who reside in the United States contrary to law” and “[r]esponding to an aroused popular consciousness” and frustrated “at the perceived lack of federal enforcement of immigration law, Farmers Branch sought to ‘prevent’ such persons from renting housing in the city.”22 In January 2008, the Farmers Branch City Council adopted Ordinance 2952, and the litigation began shortly thereafter. A summary of Ordinance 2952 is provided in the Fifth Circuit’s opinion:

Ordinance 2952 sets forth licensing provisions and criminal sanctions. The Ordinance requires individuals to obtain a license before occupying a rented apartment or “single-family residence.” For persons not declaring themselves citizens or nationals of the United States, Farmers Branch’s building inspector must verify “with the federal government whether the occupant is an alien lawfully present in the United States.” Upon such inquiry, if the federal government twice “reports” that the occupant is “not lawfully present in the United States,” then the building inspector must revoke the occupant’s license after notifying both the occupant and the landlord. The Ordinance provides that “[a]ny landlord or occupant who has received a deficiency notice or a revocation notice may seek judicial review of the notice by filing suit against the building inspector in a court of competent jurisdiction in Dallas County, Texas.”

The Ordinance’s criminal provisions prohibit persons from occupying a rented apartment or single-family residence without first obtaining a valid license, and making a false statement of fact on a license application. Landlords, in turn, are prohibited from renting an apartment or single-family residence without obtaining licenses from the occupants; failing to maintain copies of licenses from all known occupants; failing to include a lease provision stating that occupancy by a person without a valid license constitutes default; and allowing an occupant to inhabit an apartment without a valid license. If a landlord commits the criminal offense of knowingly permitting an occupant to remain in an apartment or single-family residence without a valid license, then the building inspector shall suspend the landlord’s rental license until the landlord submits a sworn affidavit stating that the occupancy has ended. A landlord may appeal the suspension of a rental license to the city council. The Ordinance also criminalizes creating, possessing, selling or distributing a counterfeit license.

These seven offenses are Class C criminal misdemeanors punishable by a fine of $500 upon conviction, with a separate offense deemed committed each day that a violation occurs or continues. In Texas, local police may make arrests for Class C misdemeanors.23

Two groups of plaintiffs sued Farmers Branch and the federal district court found the ordinance to be preempted under the Supremacy Clause,24 both as an improper regulation of immigration because it “applies federal immigration classifications for purposes not authorized or contemplated by federal law,” and also as an obstacle to the “comprehensive federal” scheme for “removing aliens or adjudicating their status for that purpose,” which the district court described as “structured, in part, to allow federal discretion and to permit in appropriate circumstances a legal adjustment in an alien’s status.”25 After a panel of the Fifth Circuit affirmed the district court judgment,26 the United States Supreme Court issued its Arizona v. United States27 opinion; thereafter, the Fifth Circuit reheard the case en banc.

Not unexpectedly, the Fifth Circuit decision is not strikingly different from that of the Third Circuit in Lozano and its discussion of the issue of conflict preemption. The court concluded that enforcement of the Farmers Branch ordinance conflicts with federal law, despite the city’s contention that the ordinance established “concurrent enforcement” of federal immigration law because, the court concluded, “The fact of a common end hardly neutralizes conflicting means.” By setting forth criminal offenses that “discourage illegal immigration or otherwise reinforce federal immigration law,” and by providing for state judicial review of a noncitizen’s lawful or unlawful presence, the ordinance was subject to the doctrine of conflict preemption.28

The court determined, applying Arizona v. United States, that Farmers Branch’s establishment of new criminal offenses based on the housing of noncitizens “disrupt[s] the federal [immigration] framework, both by interfering with federal anti-harboring law and by allowing state officers to “hold [ ] aliens in custody for possible unlawful presence without federal direction and supervision.”29 It is the prerogative of the federal government, not state or local governments and state courts, to classify noncitizens and therefore, the ordinance’s state judicial review process, “determined by federal law,” leaves the determination of immigrant status in the hands of state courts. Since that power to classify noncitizens is reserved exclusively to the federal government, the judicial review section of the Farmers Branch ordinance was preempted by federal law.30

The bottom line is this—both Hazleton and Farmers Branch have fought the battle over regulation of housing and/or employment of unauthorized workers, and lost every step of the way.31 As the foregoing unequivocally reflects, cities should be extremely wary of addressing immigration issues through ordinances and licensing schemes. After the Supreme Court’s Arizona v. United States ruling, and the rulings of the Third and Fifth Circuits in the Hazleton and Farmers Branch cases, there is virtually no room for maneuver by local governments in confronting illegal immigration, particularly if it involves the imposition of fines or penalties on immigrants.

Endnotes

1. Migration Policy Institute, Hazleton and Beyond: Why Communities Try to Restrict Immigration (2010), at 2–3.

2. Id. at 3.

3. Pub. L. No. 99-603, 100 Stat. 3445.

4. Hoffman Plastic Compounds v. NLRB, 535 U.S. 137, 147 (2002).

5. See http://legalworkshop.org/2010/01/27/preemption-of-local-regulations-beyond-lozano-v-city-of-hazleton-reconciling-local-enforcement-with-federal-immigration-policy.

6. Hazleton and Beyond, supra note 1, at 3.

7. See Arizona v. United States, 132 S. Ct. 2492 (2012) (striking three provisions of an Arizona law, holding that the state: (1) cannot make it a misdemeanor for immigrants to not carry registration documents, (2) cannot criminalize the act of an illegal immigrant seeking employment, and (3) cannot authorize state officers to arrest someone on the belief that the person has committed an offense that makes him deportable; however, upholding the “show me your papers” provision of the statute); Chamber of Commerce of the United States v. Whiting, 131 S. Ct. 1968 (2011).

8. Hazleton and Beyond, supra note 1, at 2.

9. Lozano v. City of Hazleton, 496 F. Supp. 2d 477 (M.D. Pa. 2007). See also Lozano v. City of Hazleton, 620 F.3d 170, 203 (3d Cir. 2010) (“Express pre-emption occurs when Congress expressly declares a law’s pre-emptive effect. . . . In such cases, ‘our task is to identify the domain expressly pre-empted.’”).

10. 8 U.S.C. § 1324a(h)(2) provides that “[t]he 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.”

11. Lozano, 496 F. Supp. 2d at 519.

12. Lozano, 620 F.3d at 204.

13. Id.

14. Lozano, 496 F.Supp.2d at 525–29.

15. Lozano, 620 F.3d at 196.

16. Id. at 210–11.

17. Id. at 213.

18. Id. at 220.

19. Id.

20. 131 S. Ct. 1968 (2011).

21. 724 F.3d 297, 302 (3d Cir. 2013). Hazleton’s petition for writ of certiorari was denied by the United States Supreme Court on March 3, 2014. See 134 S. Ct. 1491 (2014).

22. Villas at Parkside Partners v. City of Farmers Branch, 726 F.3d 524, 526 (5th Cir. 2013). The Farmers Branch ordinance, unlike Hazleton’s ordinance, did not address any employment issues related to unauthorized workers. Farmers Branch’s petition for writ of certiorari was denied by the United States Supreme Court on March 3, 2014. See 134 S. Ct. 1491 (2014).

23. Farmers Branch, 726 F.3d at 526–27 (citations omitted).

24. The Supremacy Clause provides that federal law “shall be the Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2.

25. Villas at Parkside Partners v. City of Farmers Branch, 701 F. Supp. 2d 835, 860–61 (N.D. Tex. 2010).

26. Villas at Parkside Partners v. City of Farmers Branch, 675 F.3d 802 (5th Cir. 2012).

27. Hazleton and Beyond, supra note 1, at 3.

28. Villas at Parkside Partners, 726 F.3d at 528–29, citing Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 372 (2000).

29. 729 F.3d at 529, quoting Arizona v. United States, 132 S. Ct. at 2509.

30. Farmers Branch, 726 F.3d at 536–37. Since the Fifth Circuit determined conflict preemption applied, “we need not reach the question of field preemption.” Id. at 537 n.17.

31. Interestingly, in Keller v. City of Fremont, 719 F.3d 931 (8th Cir. 2013), the Eighth Circuit held that the Nebraska city’s rental provisions were not preempted by federal law. The Fremont ordinance provides that it is unlawful for any person or business entity to rent to, or permit occupancy by, an illegal alien. Prospective renters must obtain an occupancy license from the city and pay a $5 fee. Information about citizenship must be disclosed and, if an alien, immigration status. The city must immediately issue a license upon application, but the city thereafter verifies immigration status. A lengthy process ensues in the event the renter is unlawfully present in the United States, and judicial review may be sought. Id. at 938. Unlike Hazleton and Farmers Branch, the Fremont ordinance imposed no penalties on immigrants. The petition for certiorari was denied by the United States Supreme Court on May 5, 2014.

Terrence S. Welch

Terrence S. Welch is a partner in Brown & Hofmeister, L.L.P. in Richardson, Texas, and a past Chair of the Section.