Chamber of Commerce of the United States of America et al. v. Michael B. Whiting et al.

Oral argument transcript · No. 09-115 · October Term 2010 · argued December 8, 2010 · the respondent won

Decision: votes, opinion and citations · Official transcript (PDF) · Argument audio at the Supreme Court

Advocates

• Carter G. Phillips, Washington, D.C., for the petitioner
• Neal K. Katyal, Office of the Solicitor General, amicus curiae supporting the petitioner
• Mary R. O'Grady, State Solicitor General, for the respondent

Transcript

From the Court's official transcript; speaker labels as in the transcript, with advocates' full names from its list of appearances.

Chief Justice Roberts: We'll hear argument next this morning in Case 09-115, Chamber of Commerce v. Whiting. Mr. Phillips. ORAL ARGUMENT OF CARTER G. PHILLIPS ON BEHALF OF THE PETITIONERS

Carter G. Phillips: Thank you, Mr. Chief Justice, and may it please the Court: In 1986, Congress converted what had been before that time a merely peripheral concern of immigration policy -- that is, how to regulate worker authorization -- and converted it into a core concern of immigration policy by the passage of the -- of the Immigration Reform and Control Act. This Court has characterized that change in legislation as providing a comprehensive scheme for dealing with those issues, and that characterization is obviously apt because Congress provided for an exhaustive and exclusively Federal method of bringing to the attention of Federal authorities problems in worker authorization, the method by which those matters should be investigated, the method by which they should be adjudicated, all of which are controlled as a matter of Alderson Reporting Company Official Federal -- exclusive Federal activity; and, indeed, the ultimate judicial review goes exclusively to the Federal courts of appeals. The sanctioning provisions are very explicit and they're very clear and they are very balanced; and for a good reason. Congress realized in this context that if you over-enforce in one direction -- that is, if you try to deter the hiring of unauthorized workers -­ you run a very serious risk of causing employers to err on the side of not hiring others who are in fact authorized but who may fall into protected classes. And so Congress very carefully calibrated the penalties on both sides so that the employer essentially would play it straight down the middle and hire the best people for the job under these circumstances, while, of course, complying if at all possible with the Federal requirements. And so it's against that backdrop -­

Justice Scalia: Why -- why is that a problem if, as -- as the Federal statute requires and the State statutes require, you have to show an intent to hire an unauthorized worker? Isn't -- isn't that what the State statutes here require?

Carter G. Phillips: Well, the State statute has two components to it. One is knowing and one is intent. Alderson Reporting Company Official But -­

Justice Scalia: Right.

Carter G. Phillips: But I don't see how that -­

Justice Scalia: So -- so why is that a problem for -- for the business? I mean he's safe so long as he doesn't intentionally hire an unauthorized worker.

Carter G. Phillips: Well, I think part of the problem is that there -- it is never 100 percent clear precisely who is and who is not an authorized worker. And I think what Congress said was -- I'm not going to deal with this problem in the kind of granular way you're looking at it, Justice Scalia, which is specifically at each of the individual employment decisions. I'm going to look at the generality of situations, and realize that if you put in -- on one side of the scale what Arizona has done here, which is to say you can -- you can essentially have the death penalty to the business, that is, complete eliminate the business's right to exist, and, on the other side of the scale, a $250 fine, it would -- it would be pretty remarkable to say, well, I -- you know, I'm going to hide behind the intent and knowing requirements and, instead, simply avoid if at all possible the risk of Arizona's sanctions being imposed upon me. Alderson Reporting Company Official

Justice Scalia: Well, I think what Arizona would answer to that is: Well, that's the only option the Federal Government left us.

Carter G. Phillips: Well, I'm quite sure that that's what Arizona will say.

Justice Scalia: They excluded everything else. We might have used reticulated penalties or, you know, enforced the Federal law ourselves, but they forbade that. But they did allow us to enforce the law, immigration laws, through licensing, right? So it all essentially comes down to -- to the licensing issue, doesn't it?

Carter G. Phillips: Right. It does ultimately does come down to the "through licensing" laws and -­ the -- the part of the -- and the fundamental problem, obviously, with Arizona's scheme here is that this is not a licensing law. This is a worker authorization sanctioning law.

Justice Kennedy: Well, when I picked up this -- this brief and looked at this case, I thought: Oh, well, licensing, that's a defined term; I'll look in Corpus Juris Secundum or ALR or something. But it really isn't. Your brief indicates you start with dictionaries, fair enough. You indicate what Federal licensing laws are. But I see no limitation on what the Alderson Reporting Company Official State can decide is a license in any jurisprudential principle that you've cited.

Carter G. Phillips: Right. Justice Kennedy, I think the better way to try to -- to grapple with the meaning of the licensing law or whether it ought to be construed broadly to allow the State wide authority to engage in supplemental enforcement in this, or narrowly in order to say that what really ought to happen in this context is, if you deal with a situation where the Federal Government has enacted -- I'm sorry -- has enforced a provision and imposed a penalty through the Federal scheme, that then as a supplement to that the State does in fact have the authority to add something over and above what it -- what the Federal Government has done. But it seems to me quite remarkable to think that Congress intended through a parenthetical referring to "through licensing laws" to allow the State to adopt an entire alternative shadow enforcement mechanism, a non-administrative decision-making process, completely a State-run operation; and even at the end, the sanction is not -- is not imposed ultimately in effect by the -­ by any regulating entity. It is ordered by a State court.

Justice Scalia: That would be possible only Alderson Reporting Company Official because nobody would think that, with this scheme in place, the Federal Government would not enforce it. Of course, no one would have expected that. But what Arizona says has occurred here is that the scheme in place has not been enforced, and Arizona and other States are in serious trouble financially and for other reasons because of -- of unrestrained immigration. And, therefore, they had to take this very massive -- I agree this step is massive, and one wouldn't have expected it to occur under this statute, but expectations change when the Federal Government has -- has simply not enforced the immigration restrictions.

Carter G. Phillips: Justice Scalia, I -- I understand the point, and I understand the motivation for why Arizona did what it did. But the -- the problem is the statute was enacted in 1986, and that's when the pre-emption standards were put in place. And the -­ again, the notion -- if you look at the way the structure of the statute -- and this also responds in some ways to Justice Kennedy's question about how should you read licensing, since it's not a self-defining concept -- is if you -- is that, first, Congress said very specifically that the immigration laws should be enforced uniformly, which says that there shouldn't be 40,000 different localities offering up their view of Alderson Reporting Company Official licensing and -- and the additional 50 States. Second of all, and this part I think is particularly telling in terms of this massive State scheme that's been adopted, which is that under section 1324a(b)(5), which is in 134a of the -- of the appendix, Congress specifically outlaws the use of the I-9 form. And in some ways this goes to your question, Justice Scalia, because it would be inconceivable that the State can in fact enforce knowing and intentional decision making without having access to the I-9 form, because that's -­

Justice Alito: Could I ask you this question to get back -­

Carter G. Phillips: Sure.

Justice Alito: -- to the issue of whether this is a licensing law? "Licensing" is not an unknown term. States and municipalities issue all sorts of licenses. For example, I think here in the District of Columbia every business has to have a general business license; isn't that right?

Carter G. Phillips: That is true, Justice Alito.

Justice Alito: Now, if the District of Columbia were -- after having enacted this requirement some years ago, were to pass a new ordinance saying "and if you knowingly hire an illegal alien, your general Alderson Reporting Company Official business license can be forfeited," would that not -­ would that cease to be a licensing law?

Carter G. Phillips: Well, I -- I think the answer to that specific hypothetical is that's still not a licensing law, because it doesn't tie the grant of the license to the revocation powers. I think Congress -- I think Congress means for the States to adopt something more specific than that, although I do think eventually -­

Justice Kennedy: Well, why is it -- this is the same question you're answering. Why is it suddenly not a license because the -- because the State imposes an additional condition, where it was a license before?

Carter G. Phillips: Well, I -­

Justice Kennedy: And I -­

Carter G. Phillips: I think the question is whether it is a licensing law within the meaning of what Congress intended. I mean -- the -- the reality is, Justice Alito, there -- there is no common definition of "license," and various States and local -­

Justice Breyer: Actually, there is. I mean, it seemed to me when I read this, it sounded a little familiar, and I think whoever wrote it in Arizona copied it out of the Administrative Procedure Act. I mean, you read the definition of "license" in the Alderson Reporting Company Official Administrative Procedure Act -­

Carter G. Phillips: But -­

Justice Breyer: -- and this is awfully close.

Carter G. Phillips: Right. I understand that, Justice Breyer, and I agree with that. But the problem is, is that the -- the Federal law, it doesn't talk about actions with -- with respect to licenses. It talks about licensing laws and -­

Justice Breyer: That's right. It might have meant something different; Congress might have. But what is, then -- I read the SEIU brief. I thought that was pretty interesting. Is that something you adopt as what the Congress did mean? I mean, what do you think Congress did mean, and what evidence is there -- if it didn't mean the APA definition, what evidence is there for that?

Carter G. Phillips: Well, the SEIU brief does a very nice job of explaining the -- the particular focus of Congress, obviously, on the -- on the Agricultural Workers Protection Act, and in particular -- which, you know, has tremendous significance in terms of narrowing the State's authority here, because, obviously, in their conforming amendments in that context -­

Justice Scalia: It could have named that, Alderson Reporting Company Official if that's all it meant.

Carter G. Phillips: I'm sorry, Your Honor.

Justice Scalia: It could have named that, that particular licensing scheme, if that's what it meant. But it didn't name it; it said licensing generally. What did it intend to add to that? Barbers' licenses?

Carter G. Phillips: No, I think what -­

Justice Scalia: Beauticians' licenses?

Carter G. Phillips: Of course.

Justice Scalia: How would any of this have anything to do with the immigration laws?

Carter G. Phillips: Well, I think what it -- what Congress actually had in mind and what's the most natural reading of a licensing law is the fairly common situation where somebody violates Federal law, usually on the criminal side, and a State licensing entity finds out about a conviction of a Federal crime, and says: Oh, wait a second, we don't want people to have licenses under these circumstances, and, therefore, they -­

Justice Scalia: But they're saying -­ that's exactly what they are saying. We -- we have -­

Carter G. Phillips: Well, no, no. But, Justice Scalia, there's a vast difference between that Alderson Reporting Company Official and what they're saying.

Justice Scalia: I think it's very common to talk about authority to do business within a State as -­ as a license. You say "licensed to do business in" so many States. It's a common expression. Now, I have -- maybe you'll persuade me otherwise, but I have no doubt that insofar as this law limits the authority to do business within the State, it is a -- it is a licensing law. It's a little harder extending licensing to formation of a corporation, but when you issue a corporation charter you really do two things. You create the corporation and enable the limitation of liability that creates, and secondly, you authorize that new creature to do business within your State. So at least half of that corporation law is licensing, it seems to me. Now, if that's what I think, what -­

Carter G. Phillips: Actually, Justice Scalia, can I stop you there?

Justice Scalia: Yes. Go on.

Carter G. Phillips: Because I think, actually, if you just -- if you just receive the articles of incorporation, that doesn't actually in all States necessarily give you the opportunity to do business. It just simply gives you the right to exist, and you may Alderson Reporting Company Official very well need to get a separate document in order to actually do business in a particular State.

Justice Scalia: You -- but you do not need the kind of a document that an out-of-State corporation needs -­

Carter G. Phillips: No, you don't need that.

Justice Scalia: -- if you're an in-State corporation. Mr. PHILLIPS: That's true. That's true. But the -- but the reality is that nobody, I think -­ and common sense and common use of the term, thinks of articles of incorporation or the charter of a partnership or any of those as -- documents as licensing, which suggests that the State -­

Justice Sotomayor: Could I -- could I -­

Carter G. Phillips: I'm sorry?

Justice Sotomayor: -- just -- just focus the questioning? Because we keep talking about whether the APA-type definition of licensing is what Congress intended or not, but you don't disagree that Congress at least intended that if someone violated the Federal law and hired illegal aliens and was -- undocumented aliens and was found to have violated it, that the State can revoke their license, correct?

Carter G. Phillips: Right. Alderson Reporting Company Official

Justice Sotomayor: -- to do business?

Carter G. Phillips: Yes. I don't disagree with that, Justice Sotomayor.

Justice Sotomayor: So it really doesn't matter whether they're revoking their right to do business in the State. And they can only revoke their charter or their articles of incorporation if they're -­ if they were filed in that State. They wouldn't have power to revoke a Delaware -­

Carter G. Phillips: Right. They can't do it -­ they can't do it to Delaware, right.

Justice Sotomayor: All right. So it's stopping them from doing business. So really the only conflict you're talking about is not the power to stop them from doing business, because you accept that this saving clause gives them the power to do that, to revoke the right to do business; what you're talking about is a conflict in the adjudication of that issue.

Carter G. Phillips: And -­

Justice Sotomayor: Is that correct?

Carter G. Phillips: Right, and the enforcement and investigation.

Justice Sotomayor: All right. So I'm -­ you know, how they define "license" or not is irrelevant to me. Walk me through whether -- what expressly Alderson Reporting Company Official pre-empts that adjudication right -­

Carter G. Phillips: Right.

Justice Sotomayor: -- or what implicitly pre-empts that adjudication right.

Carter G. Phillips: Right.

Justice Sotomayor: Because that is, for me, what the center of this question is.

Carter G. Phillips: Right. I think there are three pieces of evidence that respond directly to what you asked, Justice Sotomayor. First is Congress, in section 115 of the statute, specifically says enforcement should be uniform, which suggests to me that this ought to be exclusively a Federal investigation and -- and adjudication process. Two, the point I was making earlier about the I-9 form. Those forms cannot be used in any location -­

Justice Scalia: Excuse me. Don't depart from that. What does that mean, "enforcement shall be uniform"?

Carter G. Phillips: I'm sorry?

Justice Scalia: What does that mean, "enforcement shall be uniform"?

Carter G. Phillips: The enforcement of the Alderson Reporting Company Official immigration laws shall be uniform. Congress stated that as a -- as an overarching principle -­

Justice Scalia: Is that any different from -­

Carter G. Phillips: -- when it enacted section 115.

Justice Scalia: -- from what is the assumed situation with respect to all Federal laws?

Carter G. Phillips: Well, not necessarily.

Justice Scalia: Are Federal laws not to be applied uniformly.

Carter G. Phillips: Well, no, I -- I mean, I think it depends on the circumstances. I can imagine a lot of -- I mean, this is -- remember, we're talking about immigration policy and immigration law here, and in general, you would expect that to be pretty much uniform. But this Court in De Canas had decided that there are some elements of it that were not, and Congress is simply reinforcing the basic notion that enforcement of it ought to be uniform to -­

Justice Alito: Doesn't the exception for licensing mean that this isn't going to be completely uniform? One -- one jurisdiction may take the position that a restaurant that employs illegal aliens may lose its restaurant -- its license to operate. Another one Alderson Reporting Company Official may take the different position.

Carter G. Phillips: Right.

Justice Alito: So it's not going to be the same.

Carter G. Phillips: But -- but, Justice Alito, I think that's why it's terribly important to limit, to narrow as much as possible -- and it's fully consistent with congressional intent -­

Justice Ginsburg: Well, they say that these -­

Carter G. Phillips: -- the need to get a full sanction done by the Federal Government and then just an add-on on the licensing side, rather than an entire regime to enforce State law.

Justice Sotomayor: But this is -- it can't be uniformity of sanction, because the court permitted licensing sanctions.

Carter G. Phillips: Right, there -- but only at that point.

Justice Sotomayor: So let's go back to my question of adjudication. What you're saying is what's specifically pre-empted is the right to adjudicate -­

Carter G. Phillips: Investigate -­

Justice Sotomayor: -- whether someone has hired undocumented aliens, correct? Alderson Reporting Company Official

Carter G. Phillips: Yes, Justice Sotomayor. And -- and the last thing I would say with respect to that was the conforming amendments with respect to the Agricultural Workers Protection Act, there's a situation where the Department of Labor, which used to engage in adjudication as well, was divested of that authority. It seems quite unlikely Congress meant to give that authority to the States and take it from the Department of Labor.

Justice Scalia: I don't see the problem in -- in diverse adjudication. Wouldn't there be a Federal question presented if a -- if a company claimed that it was deprived of the ability to do business because of a mistaken interpretation of Federal law, that the person it hired was not an authorized person?

Carter G. Phillips: But Arizona doesn't purport -­

Justice Scalia: Wouldn't that be a Federal question that -- that could be -­

Carter G. Phillips: Well, Arizona doesn't purport to be enforcing Federal law here. It has an independent State law basis for the actions that it takes. So that would not arise under Federal law, Justice Scalia.

Justice Scalia: Doesn't the State law basis refer to the Federal law? Alderson Reporting Company Official

Carter G. Phillips: No, it -- actually, I don't think it -­

Justice Scalia: I thought it tracked it.

Carter G. Phillips: No, it -- well, it tracks it, but it doesn't incorporate it. It doesn't purport to be -- to be applying it. It's the same standards, but it's still a matter of State law. It's not a Federal -- it's not Federal -- it doesn't arise under Federal law. I'd like to reserve -­

Chief Justice Roberts: Thank you, counsel. General Katyal. ORAL ARGUMENT OF NEAL KUMAR KATYAL ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING PETITIONERS

Neal K. Katyal: Thank you, Mr. Chief Justice, and may it please the Court: Nearly a quarter of a century ago, Congress declared Federal employer sanctions central, not peripheral, to the policy of immigration law. Congress broadly swept away State and local laws, pre-empting any sanction upon those who employ unauthorized aliens, with the sole exception being a mere parenthetical for licensing and similar laws.

Chief Justice Roberts: Just to pose there, we've had a little discussion about what licensing laws Alderson Reporting Company Official are, but we haven't talked at all about those last two words, "and similar laws." It seems to me that whatever wiggle room or ambiguity there may be in saying whether this is a license or not, Congress swept pretty broadly. It said, not just licensing laws, but licensing and similar laws.

Neal K. Katyal: First let me tell you, Mr. Chief Justice, what we think a licensing law is and then deal with the "similar" question. We think a licensing law, as Congress defined it in IRCA, was the traditional licensing laws that were in place in 1986. Those were largely farm labor contractor laws. They were aimed at fitness to do business, and they had a few essential characteristics in those laws. They -­

Chief Justice Roberts: I'm sorry. Let me just -- I mean, businesses had to have licensing laws pretty much across the board, right? You couldn't set up a -- I don't know -- an electrical contracting business if you didn't -- weren't licensed to do business or met the requirements for an electrician. It wasn't just agricultural work.

Neal K. Katyal: Oh, absolutely. And -- but I think that this licensing law looks very different from the ones you were referring to or the farm labor Alderson Reporting Company Official contractor ones, for a number of reasons. The first is licensing laws issue licenses. They're generally about the issuance of licenses, not simply ones in which licenses are revoked. Second, they are ones in which the issuance of the license, the criteria for issuance, is the same as the criteria for revocation, because they're -­

Justice Scalia: Excuse me. You -- are you saying, and I think the Petitioner here may have been saying as well, that if you have a licensing law that permits the revocation of the license, the revocation is not a licensing law?

Neal K. Katyal: No. What I'm saying is, is that a -­

Justice Scalia: Suppose I have a licensing law which says if you do this, your license will be revoked. Does that remain a licensing law?

Neal K. Katyal: In general, that itself is not a licensing law. The licensing laws share a number of characteristics. Now, we can debate about whether subtracting one or another of those characteristics -­

Justice Scalia: Why make exception for licensing laws therefore if you can't revoke a license under it?

Neal K. Katyal: Because -- because, Alderson Reporting Company Official Justice Scalia, Congress wanted to preserve the States' traditional power for licensing laws, which were about fitness to do business. And what Arizona has done -­

Justice Scalia: Once you're in, you can do whatever you like. Do you think that is what Congress meant? You can -- you can pass upon their fitness when you issue the license, but once its issued, they can do whatever they like; is that right?

Neal K. Katyal: No. I think that the criteria would be the same for issuance and revocation.

Justice Scalia: And revocation. Okay. So that raises the question: What does it make -- why does it make any difference if the revocation provision is contained in the narrow licensing law or if there's a general State law which says all licenses that -- that are issued may be revoked for certain reasons?

Neal K. Katyal: Because, Justice Scalia, what Congress was trying to do was preserve the States' and localities' traditional power for fitness to do business. And one good indicia that fitness to do business is not was what at issue in the particular law is that they will let businesses operate, they will license them without any care whatsoever as to whether they have a history of violating the particular provisions -­ Alderson Reporting Company Official

Justice Scalia: So they should just -- Arizona should just amend all its licensing laws to require what they now require when the license is issued, and to say, in each specific licensing law, that it can be revoked for the same -- on the same grounds -­

Neal K. Katyal: Justice Scalia, that would solve that problem.

Justice Scalia: That would solve the problem.

Neal K. Katyal: Now, there are other -­

Chief Justice Roberts: Even if they said -­

Neal K. Katyal: -- hallmarks of licensing law.

Chief Justice Roberts: Even if they said "and you have to renew your license every year or every 6 months"?

Neal K. Katyal: That is correct. That itself, I don't think, is relevant to whether the licensing law is -- the other hallmarks are that they have discretionary adjudication by an expert body, that it's not mandatory, that it is genuinely aimed at qualifications to do business. It -­

Chief Justice Roberts: You don't disagree that whether or not a company hires illegal workers is related to quality or -- or ability to do business or Alderson Reporting Company Official qualification?

Neal K. Katyal: A State could certainly make that part of its genuine fitness to do business law. Now, here Arizona hasn't done that. And we know that because the criteria for issuance of the license are entirely divorced from the criteria for revocation of the license. And if Arizona really believed, Mr. Chief Justice, what you're saying, which is that it's relevant to the -- the violation is relevant to whether they can do business or not, they allow every single one of these entities to get the license.

Justice Sotomayor: Your argument sounds to me like look at the law and see what its purpose is. If the purpose is to regulate undocumented aliens, then it's struck down. If it happens to put its revocation provisions in its licensing law, then it's okay.

Neal K. Katyal: Justice -­

Justice Sotomayor: It doesn't make much sense -­

Neal K. Katyal: Justice Sotomayor, I'm not talking about purpose. I'm saying look at the face of the statute and see what is being -­

Justice Sotomayor: The face of the statute talks only about if you hire undocumented aliens, your license is revoked. Alderson Reporting Company Official

Neal K. Katyal: Right. So that looks like a punishment statute. There are essentially two boxes here. There is the -­

Justice Sotomayor: But the -- the saving clause says that it's okay. Civil or criminal sanctions other than through licensing and similar laws. So, I mean -­

Neal K. Katyal: Right. And this is not a licensing law. Congress essentially had two boxes in 1986. One was the traditional fitness to do business laws, and the other was what Congress -­

Justice Sotomayor: If we disagree with you, could you answer the question I posed to your adversary, which is what makes the adjudication of status pre-empted?

Neal K. Katyal: Absolutely. The Federal adjudication is expressly -- State adjudication of a Federal violation is expressly pre-empted as well as impliedly so for three reasons. The first is that Congress, in developing IRCA and the comprehensive scheme, set out a series of procedures, Federal adjudication with an ALJ, all sorts of different regulations to the jot and tittle. And what Arizona does here is what 40,000 different localities can do if this law is upheld, which is have -­ Alderson Reporting Company Official

Justice Sotomayor: At the time the statute was passed, there were many, many State laws that adjudicated revocation of licenses. Perhaps not many had addressed the issue of hiring undocumented aliens, but many State laws existed that independently adjudicated revocations. What in the legislative history or in the words of the statute show that Congress intended in any way to limit those adjudications?

Neal K. Katyal: Well, it's undoubtedly the case that without the parenthetical, the mere parenthetical savings clause, that Arizona-like laws would be swept away as sanctions, that these are sanctions imposed. So the question is whether the licensing law phrase saves that. And I think it saves the Federal -- State adjudication, and I think the answer to that is no, because to read the statute that way is to permit all of those States to have their own laws, and it's undoubtedly the case that Congress wanted to sweep away the De Canas-style State statutes that were in place that imposed sanctions on employers. And so the -­

Chief Justice Roberts: Counsel, just so I get -- make sure I understand your approach. You're saying that Arizona had a law saying you have to have a Alderson Reporting Company Official license to do business, and then it became aware of a problem it wasn't aware of before -- it found out that a lot of employers were employing child labor, and they didn't know they would do that -- and they say we can revoke your license if you're determined to have employed child labor; that that would not be okay?

Neal K. Katyal: Well -­

Chief Justice Roberts: But it would be okay if, in the original licensing thing, they said "and you can't employ child labor"?

Neal K. Katyal: Well, I think that the answer depends on what Congress was trying to get at. In 1986, we know what Congress was trying to get at with respect to State enforcement of immigration laws. They broadly swept away the De Canas-style laws, and they said, for the I-9 provision, which President Reagan described as the keystone of the Act, that I-9 documents can't be used in any procedure besides IRCA procedures.

Justice Kennedy: But the Chief Justice -­ the Chief Justice can insist on the answer to his own question, but it seems to me his question is why isn't that still a licensing law?

Neal K. Katyal: If it has independent adjudication, it is swept away by the first parts of the (h)(2) statute which say -- which say the provisions of Alderson Reporting Company Official this section pre-empt any State or local law imposing civil or criminal sanctions.

Justice Ginsburg: But then, what -­

Justice Kennedy: But in the child labor example, why isn't that a -- an addition to a regulatory licensing scheme so that it's a licensing law?

Neal K. Katyal: Because if I understand -- I may not understand the hypothetical, but the word "provisions" refers to the entire subset -- the entire statute in IRCA, including the procedural protections -­ the procedures that follow for Federal enforcement of the immigration laws.

Justice Scalia: Would you -­

Chief Justice Roberts: But you had -­

Justice Scalia: -- read that section again?

Chief Justice Roberts: I was just going to say you tried earlier to talk about the two boxes, and you said something would be pre-empted by the first clause. Anything -- civil and criminal sanctions are allowed if they're imposed through licensing and similar laws. There are not two boxes. The State can do what's in the first part so long as it does it through licensing or similar laws.

Neal K. Katyal: Right. And our -- and our position is that this is not a licensing law because it Alderson Reporting Company Official doesn't bear any of the indicia of a traditional licensing law, and -­

Chief Justice Roberts: Is it similar to a licensing law?

Neal K. Katyal: No, I don't think so, that Congress -- Congress had in the -- when they used "similar" meant to sidestep the schematic debate about whether something is a certificate, as some of the farm labor contractor statutes use that term, or a license.

Justice Scalia: No, no, that's all right.

Chief Justice Roberts: Thank you, counsel. Ms. O'Grady. ORAL ARGUMENT OF MARY R. O'GRADY ON BEHALF OF THE RESPONDENTS

Mary R. O'Grady: Thank you. Mr. Chief Justice, and may it please the Court: Through their police powers, States traditionally have the authority to regulate the conduct of employers within their jurisdiction to determine what conduct warrants issuance of a State license and to determine what conduct justifies suspending or revoking such a license. And although Congress pre-empted some of our traditional authority when it enacted IRCA in 1986, it preserved significant State authority through the savings clause that permits a State to impose Alderson Reporting Company Official sanctions through licensing and similar laws.

Justice Ginsburg: How do you answer the -­ the anomaly that Arizona cannot impose a fine even in a modest amount, but it can revoke someone's license to do business?

Mary R. O'Grady: Your Honor, we think that looking at the savings clause -- we don't view it as an anomaly. The structure that Congress established is one that the State's authority is determined by the nature of the sanction that we choose to impose. We don't have the authority to -- they -- they took away our authority to impose civil monetary and criminal sanctions but preserved our authority to impose sanctions through a similar law.

Justice Kennedy: But underlying Justice Ginsburg's question is why would Congress want to do that?

Mary R. O'Grady: Well, I think it makes sense, Your Honor, because in terms of licensing, it -- it provides some accountability, because we are the entities that establish policy for our licensees, and we are the ones accountable for whether that business remains in business or whether we're taking it away from them. So it -­

Justice Scalia: Perhaps Congress never Alderson Reporting Company Official expected that the States would have to resort to such massive measures, and they probably wouldn't have if -­ if the law had been uniformly enforced and vigorously enforced, right? You -- you didn't -- didn't have any notion of doing this sort of thing in 1986, did you?

Mary R. O'Grady: Your Honor, certainly we waited until 2007.

Justice Scalia: So maybe Congress wasn't worried about it because it seemed very unlikely that anything like that would occur.

Mary R. O'Grady: Perhaps. But I think also Congress was recognizing what this Court recognized in De Canas, was that unauthorized employment has significant local consequences, so they did not want to fully pre-empt State law. They wanted to preserve State authority -­

Justice Breyer: The main -- the main anomaly seemed to me to be this, that in the Federal Act, as -- that was the first point that the Chamber made, that it's a fairly careful balance. There are a group of people in Arizona, they may look as if they come from Mexico or speak with an Hispanic accent, and you're not certain whether they in fact are illegals or that they're legal. Now, think of that category. Alderson Reporting Company Official Congress has passed a statute that gives the employer just as much incentive to verify, so there's no discrimination, as to dismiss, so there's no illegal hiring. It's absolutely balanced. A $1,000 fine for the one, a $1,000 fine for the other. So Arizona comes along and says: I'll tell you what, if you discriminate, you know what happens to you? Nothing. But if you hire an illegal immigrant, your business is dead. That's just one thing they do. Now, how can you reconcile that intent to prevent discrimination against people because of their appearance or accent -­ how do you reconcile that with Arizona's law? If you're a businessman, every incentive under that law is to call close questions against hiring this person. Under the Federal law, every incentive is to look at it carefully.

Mary R. O'Grady: Your Honor, a couple of points. First, in terms of how our law works, we do have a prohibition against investigating any complaint that's based solely on race. So if we get a complaint that says those people all look Mexican or Hispanic, that does not get investigated under Arizona law, first. We also have criminal penalties if frivolous complaints are filed. Alderson Reporting Company Official Beyond that, we have the use of E-Verify, which is an added protection for employers to prevent the hiring of unauthorized aliens. So if they use E-Verify, if they're in good-faith compliance with the I-9 process, they have no risk of exposure under Arizona law, just as true under Federal law.

Justice Sotomayor: I'm -- doesn't it frustrate the congressional intent when the Federal law says that the I-9 can be used for no purpose other than the Federal adjudication of whether a violation has occurred or not? Doesn't it frustrate that law to have the States raise a defense that depends on forcing someone to disclose something that the Federal law protects? I mean, this is a vicious circle. Federal law says you can't do the I-9 for -- you can't use it for any purpose other than the Federal adjudication. Now you're creating a defense that says you have to supply us with something that Federal law otherwise protects from disclosure.

Mary R. O'Grady: Your Honor, we don't think that the Federal law prohibits the use of an I-9 -- of the I-9 -- an employer's use of the I-9 in a State proceeding, that these can be used under the Federal proceeding or under the State. Alderson Reporting Company Official But, beyond that, if at some point in an actual enforcement action it was determined that Federal law did have that impact, they would still have that defense available to them. They would just have to, you know, prove it up in a different way other than use the form.

Justice Sotomayor: That doesn't answer my point. Doesn't it frustrate Federal law when the Federal law says that I-9 can be used for no purpose other than the Federal adjudication of the status of employees? I think that's -­

Mary R. O'Grady: Here -- here's what the law says: It may not be used for purposes other than for enforcement of this chapter. And we believe that a State enforcement action, under the authority for preserving sanctions through licensing and similar laws, would fall within that. So we think they should be able to use that; the employer should be able to use that.

Justice Alito: Isn't there -- isn't there a difference between saying it may not be used for any purpose other than for enforcement of this chapter and other provisions of Federal law, on the one hand, and saying, on the other hand, it may not be used for any purpose other than in a Federal proceeding? The enforcement -- the I-9 certainly could be used in a Alderson Reporting Company Official Federal proceeding by the employer. Would that then -­ would that be used for the enforcement of the Federal law? I wouldn't think so.

Mary R. O'Grady: That's true, Your Honor. That's -- that -­

Justice Breyer: Is the I-9 -- I do have a question on the I-9. I'm not certain. I thought under Federal law that if the employee -- the employer isn't certain, but the employee says here's my Social Security card, here's the driver's license. The employer looks at that, he's home free; is that right? But under Federal -- under your law, under Arizona law, he's not home free, and, moreover -­ because he -- it may -- he's not home free. He still could be prosecuted. Is that right or not?

Mary R. O'Grady: No, that's not right, Your Honor.

Justice Breyer: So if he shows the driver's license -- under -- under Arizona law, if the -- if he shows a driver's license and Social Security card, the worker, the employer looks at it, the employer cannot be prosecuted?

Mary R. O'Grady: Well, Your Honor -­

Justice Breyer: Yes or no?

Mary R. O'Grady: We would need the evidence Alderson Reporting Company Official that the person knowingly employed the unauthorized alien and a good-faith defense through use of a -­

Justice Breyer: All right. So -- I thought in reading it that it creates some kind of presumption, but he is not home free?

Mary R. O'Grady: No, Your Honor. The -- the substantive -­

Justice Breyer: But under Federal law he is home free.

Mary R. O'Grady: The substantive requirements under Arizona law and Federal law are the same. We're imposing no new obligations. And -­

Justice Breyer: So then he's home free? Look, I don't -- I'm trying to understand. Maybe it's not enough time to explain it, but I thought Federal law requires this E-9 business or whatever that E review is. And I was worried about the E review which it seemed to require because it seemed to me in 20 percent of the cases where the notice is this guy is not authorized; we don't have any record that he's authorized to work -- 20 percent of those are wrong, and he is authorized to work. So the employer who follows that is really going to fire 20 percent of the people who will be absolutely entitled to work. And so I'd just like you Alderson Reporting Company Official to address those points, as you wish.

Mary R. O'Grady: Okay. And let me walk through how our law works to see if this addresses the concern. So the -- Arizona doesn't change anything in terms of the use of the I-9. We retain the same defense that's in the Federal law for good-faith compliance with the I-9. We do require employers to use E-Verify, although we don't impose a sanction on that employer if they don't use E-Verify.

Justice Ginsburg: Can you explain that, E-Verify, because this is a Federal resource, and the Federal Government has said we want this to be voluntary. How can Arizona take a Federal resource, which the Federal Government says is voluntary except in certain circumstances, and turn it into something that's mandatory?

Mary R. O'Grady: We think the -- that question is answered by looking at -- into the conflict pre-emption analysis, because Congress didn't address the role of the States with regard to E-Verify. And we aren't -­

Justice Ginsburg: I don't -- I don't get into any pre-emption or not, but it's -- Arizona wants to use a Federal resource. And the Fed makes it available if the employer can use it voluntarily, but Alderson Reporting Company Official not mandatorily. How can -- how can Arizona set the rules on the use of a Federal resource?

Mary R. O'Grady: Your Honor, we can -- as long as it's not a burden to the objectives of Congress, we think that we can require employers within our jurisdiction to use E-Verify.

Justice Scalia: Do -- do you make it mandatory?

Mary R. O'Grady: Well, our statute says you shall use E-Verify. We don't impose a penalty against employers who fail to use it. The consequences are the same as they are under Federal law.

Justice Scalia: You just -- you just don't get the safe harbor. Isn't that the only consequence?

Mary R. O'Grady: That's right. You don't get the safe harbor under E-Verify. Now -- for the use of E-Verify. We did add after this lawsuit was filed some additional requirements similar to what they have under the Federal system, where you can't get State contracts, you can't get State grants.

Justice Kennedy: But you are taking the mechanism that Congress said will be a pilot program that is optional, and you are making it mandatory. It seems to me that's almost a classic example of a State doing something that is inconsistent with the Federal Alderson Reporting Company Official requirement.

Mary R. O'Grady: Well, again, we look at the test for conflict pre-emption in terms of, does this make it impossible to comply with Federal law? No, it's really a question of are we interfering with Congress's -- excuse me -- the Federal Government's ability to achieve its goals? And the goal in developing E-Verify is to have a more effective verification system.

Justice Breyer: If they fail to do it, then they cannot receive any, quote, "grant, loan, or performance-based incentive," end quote, from the State. That's what the law says, isn't it?

Mary R. O'Grady: That's what -- and that was added after this lawsuit was filed.

Justice Breyer: All right. I would think then the answer to Justice Scalia's question is, yes, there is that penalty. It isn't simply hortatory.

Mary R. O'Grady: Well, there's no penalty in terms of -­

Justice Breyer: You don't go to jail.

Mary R. O'Grady: -- you get fined -­

Justice Breyer: What you do is you lose any grant, loan, or performance-based incentive. Is that right? Alderson Reporting Company Official

Mary R. O'Grady: That's true under current law. That's not what the plaintiffs challenged -­

Justice Scalia: Does this lawsuit challenge that?

Mary R. O'Grady: That -- it does not, Your Honor. They just challenged subsection (A) -­

Justice Scalia: You're under the old law, and the only -- the only sanction is you lose the safe harbor, if that's a sanction.

Mary R. O'Grady: That's right. That's right, Your Honor.

Justice Sotomayor: So, in answer to Justice Breyer's earlier question, in fact, relying on the I-9 does not provide a safe harbor, because under the E-Verify system, you can't just rely on the I-9 forms and statutes; you have to rely on the E-Verify.

Mary R. O'Grady: Well, Your Honor, we have the same -- it's modeled after the Federal law. So, just as Federal law has a defense for employers who in good faith follow I-9, so does the State law. I -­

Justice Alito: The Federal law and the State law do seem to be exactly the same on this point, but I have -- I don't understand how these two provisions fit together when E-Verify is used. Suppose an employer -- the first thing the Alderson Reporting Company Official employer does is receive the forms from the employee, from the I-9 process. He looks at the forms. Well, they reasonably seem to be authentic. So that employer now has the good-faith defense that's provided under -­ by the I-9 process, under both Federal law and State law. But, under both Federal law and State law, the employee -- employer either must or may also use the e-verification system. The employer gets back a notice of non-authorization. But what -- and that creates, supposedly, a rebuttable presumption under both systems that the employee is not authorized to work. How does that fit together? If you have a complete defense for having used the I-9 process in good faith, the whole e-verification process seems to be irrelevant under both Federal law and State law. I don't understand how they fit together.

Mary R. O'Grady: And, Justice Alito, we haven't wrestled that in practical application, and I'm not aware of them reaching that point under the Federal system, either, but -- because it does seem at some point, if you -- that the system should work, that if you have used I-9 and you get back a final non-confirmation, not a tentative non-confirmation, that that employee is unauthorized, that that, you know, Alderson Reporting Company Official seems like it should carry greater weight in an enforcement action. But as a -- as an -- on an as-applied basis, I'm not sure how that plays out in an actual enforcement action.

Chief Justice Roberts: Could you -- I wasn't quite sure what she meant. Judge Schroeder, in her opinion for the court, emphasized that this statute was being evaluated on its -- on its face and that -­ she said in as-applied, particular challenges might arise. How would that work? If we determine this is not pre-empted, how would -- on its face, how would an as-applied challenge come about?

Mary R. O'Grady: I think, Your Honor, perhaps if we -- perhaps in terms of what are the outer limits of our definition of "license" and their saying that we are outside the definition of licensing and similar laws in a particular case, perhaps that would be an as-applied-type challenge. I think some of the I-9 concerns are perhaps more appropriately resolved in a -- in a direct case where that issue has arisen on an as-applied basis, and I think she was concerned about some of the real implementation questions that were wrapped into the legal challenge. Alderson Reporting Company Official But, for the most part, I think the general framework of our statute is appropriate for -- in this challenge.

Justice Scalia: So you think after this case we could look forward to cases, one by one, for all the various types of licenses? Those would be as-applied challenges and would not have been resolved by this case.

Mary R. O'Grady: Your Honor, my hope is that we've got -­

Justice Scalia: We're really wasting our time here, aren't we?

Mary R. O'Grady: My hope is, Your Honor, that we get sufficient guidance -­

Justice Sotomayor: Wouldn't -- wouldn't it be easier, if that's Justice Scalia's concern, to take the Solicitor General's position, that if you're adjudicating good faith or intent differently in any way from the Federal Government, that it's pre-empted? Isn't that what waiting for an as-applied challenge means, whether or not you are putting different requirements on proving good faith?

Mary R. O'Grady: No, Your Honor, and -- because I was trying to give some examples of the kinds of things that may come up as a practical matter, but I Alderson Reporting Company Official think we can get the guidance from this Court. I hope that we can proceed in implementation, but -­

Justice Sotomayor: Well, let -- then let me ask the question directly. If Arizona's system does not permit a employer to rely on non-suspect documents, the I-9 documents that are permitted employers to rely on -­ the Arizona system says, no, you can't rely on those. Is that pre-empted or not? You can't rely on I-9, or the Arizona system says -- on the I-9 documents. Or the Arizona system says you can't hire someone who hasn't been approved under the e-verification system. Is that pre-empted?

Mary R. O'Grady: I think those would both be problems. I think we need to be consistent with the -­ the structure and the obligations that are imposed under Federal law in terms of our sanctions provisions.

Justice Scalia: So, are you -- are you conceding that any variation from the Federal standards for -- for criminal and civil liability is automatically precluded? I mean, as I read the exception, it's an exception for State licensing and similar laws. And it doesn't say "so long as those licensing and similar laws go no further than what the Federal Government has done." I mean, we often allow States to impose Alderson Reporting Company Official regulatory requirements that go beyond the regulatory requirements that the Federal Government has imposed, and that is not automatically considered to be pre-empted. So why -- why are you conceding that Arizona cannot go a whit beyond what the Federal Government says?

Mary R. O'Grady: Because I think what Congress preserved for us was our ability to impose sanctions, including the suspension and revocation of State laws. But I do think they established a uniform national standard. I don't think we could, for example, establish a -- a strict liability offense in Arizona. We'd have to have a scienter requirement as they have in Federal law.

Justice Breyer: Now, what I was trying to get is -- what I was looking at specifically is Federal law says, if you look at the driver's license and Social Security card -- those are I-9 docs -- then the employer has established an affirmative defense and has not violated the law. That's what it says. You know the cite -- 27a or whatever. Okay? That's the Federal law. Arizona law that I was reading -- maybe there's another place I should read -- is it says, on determining whether he's an unauthorized alien, the court -- the court shall consider the Federal Alderson Reporting Company Official Government's determination. It creates a rebuttable presumption. That means it might be rebutted. Okay? So I see a difference there. And the reason that that's relevant is because, my first question, if you are an employer, prior to your law, it's 50/50. I better verify because if I'm discriminating, you know, da, da, da. And it's not that hard. I just look at the driver's license and I look at -- I'm home free, and the Social Security card, and if I hire an illegal immigrant, the same thing, da, da, da. Okay? So same both ways. Your law: Employer, look at the driver's license and Social Security, you are not home free. Employer, if it turns out that you've been hiring this illegal immigrant and he's not an American, your business is finished. But what happens if I discriminate? Under our law? Nothing. Now, that was the original point they made. That's why I brought up this question of difference in standards. And I want to be absolutely clear what your answer to that is.

Mary R. O'Grady: And I'm hoping I am being clear, Justice Breyer. We have the same standards as Federal law. We have the same I-9 defense that's in Federal law. Alderson Reporting Company Official

Justice Breyer: Well, where? Where is it in the statute, then? Because what I read were the words "rebuttable presumption," and I might be reading the wrong words.

Mary R. O'Grady: Okay.

Justice Breyer: So tell me where it is.

Mary R. O'Grady: Okay. Let me get to it, and let me explain our rebuttable presumption while I find the specific statutory cite for our I-9 process.

Justice Alito: Well, it's on page 184 to 185 of the appendix to the petition, isn't it?

Mary R. O'Grady: Yes. And 178a is the provision: For the purposes of this section, employer that establishes it has complied in good faith with the requirements of 8 U.S.C. 1324a(b) establishes an affirmative defense, et cetera. So that's the provision that provides the I-9 defense.

Justice Breyer: Okay. So the -­

Mary R. O'Grady: The rebuttable presumption issue -- and this is how that comes into play. We have to, in bringing an enforcement action, have to rely -­ the State, in making its case, has to rely on information from the Federal Government regarding whether someone is authorized or unauthorized. We have to rely on that information from the Federal Government. Alderson Reporting Company Official We bring our action in State court if we have verification from the Federal Government that that person is unauthorized. We have additional information that we've established the scienter requirement, then we bring our action. But the employer has an opportunity to rebut the evidence that we've presented in a State court proceeding. It may be, you know, that person doesn't work for us or some other type of evidence. So that's the role of that rebuttable presumption, Your Honor.

Justice Breyer: Okay, thank you. I see that.

Mary R. O'Grady: Certainly. So in terms of the prior adjudication -­

Justice Kennedy: Just so you know, I interpret your answer as confirming the implication of Justice Breyer's question, that there is a very substantial difference in Federal and State law on this point. I mean, you've told about -- you know what lawsuits are about. If you're -- if you're home free by a driver's license and Social Security inspection under Federal law and you're not under State law, that is a difference -­

Mary R. O'Grady: And our standards are the same. And it's subsection (J) in which we have the I-9 Alderson Reporting Company Official affirmative defense in our State law and our Federal -­

Chief Justice Roberts: So you think you are home free under State law?

Mary R. O'Grady: To the extent that you would -- should be home free and you'd have the benefit of that good-faith defense.

Chief Justice Roberts: It's an affirmative defense under both.

Mary R. O'Grady: Yes, Your Honor. But having the -­

Justice Breyer: The main point -- I mean, I'll check that. I think maybe I was mistaken, perhaps, in that I was looking at the other section.

Mary R. O'Grady: That's right.

Justice Breyer: But then we're still stuck with this enormous discrepancy in penalty. I mean, I'm characterizing it as enormous, but it seems like the -­ you know, it's even on discrimination versus under the Federal law. It's not even -- your business is out to lunch, gone, and on the other side it has nothing. What about that one?

Mary R. O'Grady: I think, Your Honor, that that is the natural consequence of the savings clause that Congress itself adopted.

Justice Breyer: The savings clause itself, Alderson Reporting Company Official the word "licensing" -- not everyone looks at this, but I did look at the legislative history. And when you look at that paragraph on page 39 of the red brief, it seems to me that that paragraph says what it means. It says precisely what it is. It says -- the first thing it says is that, look, if you're found to have violated this -- where is it? It's page -- there it is. Suppose somebody has been found to have violated the sanctions provision in the Federal legislation. Now, you've found -- he has been found by the Federal Government. Then what the State does, it can revoke his license. Okay? That's one thing. And the second thing it says it wants -- doesn't want to pre-empt "'fitness to do business laws,' such as State farm labor contracting laws or forestry laws." In other words, it's thinking of some precise set of licenses, and that's why this licensing thing was there. And the very next part of this Federal law are conforming amendments, and those conforming amendments apply to departments of government that were concerned with maintaining State farm labor contractor laws. Now, I grant you, you have to go beyond the text, but some of us do because we get enlightenment. And going beyond that text, it seems to me we should follow what that House report says. Now, what is your Alderson Reporting Company Official response to that?

Mary R. O'Grady: Well, first, of course, we would focus on the text where Congress could have but did not -­

Justice Breyer: Yes, I've got -­

Mary R. O'Grady: -- limit -- they didn't limit it.

Justice Breyer: I said yes, I've got broad licensing -- but let's deal with the part where you look at their explanation as to why they put those words there.

Mary R. O'Grady: Okay. First, the farm labor contractor is simply an example, and I think it says "such as" an example of the type of licensing provisions that existed at this time that addressed that. So that's not an all-inclusive universe of sanctions that -- of -- of all the licensing laws that might be subject to this. They also don't specifically say there has to be a prior Federal adjudication. That sentence has passive voice, "has been determined," without specifying who is making that determination, and it specifically refers to State and local processes that provide for the suspension and revocation of State licenses. And then the sentence goes -- then there's a following sentence that says, you know, further, we Alderson Reporting Company Official don't intend to disrupt laws such as these forestry and other, you know, fitness to do business. We think this is a fitness to do business law in that we are establishing as a State standard that if you engage in this conduct of knowingly employing unauthorized aliens, we are going to have the ability to take an action against that license that we have given you to do business in our jurisdiction. So we think we fit within that last sentence of the -- of the -­

Justice Ginsburg: Can you also explain the I-9? You said it's the same as in the Fed. Home free if you have documents, Social Security, driver's license. But you also require the E-Verify. So how -­ does the E-Verify information modify the I-9? How -­ how do those two -­

Mary R. O'Grady: They work in our system, Your Honor, as they do under the Federal law, under -- that you get a rebuttable presumption if you -- in your favor if you've used E-Verify, but the affirmative defense if you've used I-9. And I am -- there is that caution; it is good-faith use of -- of the I-9 system. We do have examples where, for example, if an employer is terminated because they are unauthorized and they show up with a different name and different papers 2 weeks later, you're not going to be able to establish your Alderson Reporting Company Official good faith. So you're home free but subject to that good-faith limitation. But we do incorporate the same obligations that exist under Federal law. And also I wanted to address more on the farm labor contractors and the amendments. And what we think that they were doing in those amendments was simply dividing responsibility at the Federal level between the Department of Labor and their processes that pre-existed IRCA, and what they were establishing in IRCA, and said we're not going to have these determinations of whether they -- the farm labor contractor has employed an unauthorized alien through a Department of Labor process; we're going to instead use the IRCA-established process. But, importantly, what Congress did not change in the agricultural worker regulations was the provision that addresses State law. It said, before IRCA and after IRCA, that those laws -- those Federal laws only supplement the authority of the States and that means that they preserved all of the State authority that they had before IRCA in the area of farm labor contractors. And that I think is reinforced by the legislative history that -- that again reinforces that those have been preserved through IRCA. This is an area that has traditionally been Alderson Reporting Company Official within the mainstream of State police power. We acknowledge that Congress does have the authority to pre-empt us, but they left important discretion in terms of our ability to impose sanctions through licensing and similar laws, and we are doing so by establishing this scheme that provides for the suspension and revocation of State licenses. It's an important part of the balance that Congress struck when it enacted IRCA by addressing what State authority would exist after that congressional enactment. We think the lower courts properly determined the scope of that provision. And unless there are further questions, I thank you for your attention this morning.

Chief Justice Roberts: Thank you, counsel. Mr. Phillips, you have 3 minutes remaining. REBUTTAL ARGUMENT OF CARTER G. PHILLIPS ON BEHALF OF THE PETITIONERS

Carter G. Phillips: Thank you, Mr. Chief Justice, and, once again, may it please the Court: I want to begin frankly where Justice Sotomayor pointed me to before, which is the question of whether or not there really is a basis for allowing the States to independently investigate and to independently adjudicate these matters. And what is the evidence that Alderson Reporting Company Official Congress did not intend that? Justice Breyer quoted from the House report, recognizing not everybody accepts that, but it does seem to me to articulate a very commonsense limitation that says you have to have a Federal adjudication in the first instance, and once you've got that, then the State is allowed to add that sanction. That -- that principle, it seems to me, is reinforced by the limitation on what you can use the I-9 for. Justice Alito, you asked that question, but it does seem to me quite clear that what Congress envisioned in 1986 when it adopted this is you're going to have an exclusively Federal enforcement scheme including the adjudicatory process, and it is only in that context that you are allowed to use the I-9. And the notion that the State could adopt a standard of intentional or knowingly, and not be able to have the I-9 materials available, seems to me flatly at odds with each other, and, therefore, it cannot be that Congress intended under those circumstances to allow these matters to be adjudicated in that particular fashion.

Justice Ginsburg: What can -- Mr. Phillips, what can the State do that would be complementary rather than conflicting?

Carter G. Phillips: I -- it seems to me the Alderson Reporting Company Official easiest -- and of course, this has nothing to do with what Arizona does -- but the easiest is, if a -- an employer is convicted of -- of violating IRCA and a criminal sanction, and he happens to be a barber, and the State licensing law says if you're convicted of a -­ of a Federal crime you will lose your license, it is available to the State under those circumstances -- and I think this is exactly what Congress had in mind -- to issue a notice to show cause why that particular person shouldn't have the license revoked and then go from there.

Justice Scalia: Convicted by -- by a Federal Government that hasn't gone after many convictions.

Carter G. Phillips: Justice Scalia -­

Justice Scalia: That's the whole problem.

Carter G. Phillips: Well, no. But, Justice Scalia, it seems to me the whole question here -- and first of all, I don't think pre-emption can be a moving target. I think you have to decide it on a basis of what Congress had in front of it in 1986. But remember, Congress was balancing three, at least, very difficult problems: minimizing burdens on the employers, minimizing discrimination against people who are permitted to be hired, and avoiding hiring people Alderson Reporting Company Official who are not permitted to do so. And how you properly reconcile that is very difficult, but the one thing that seems to me clear is that that was a choice Congress meant to leave to itself and to the Federal Government to sort out and not to give the States the opportunity to come in where they did. And to say one last word about E-Verify -­

Chief Justice Roberts: Well, except -­ well, you're just kind of blinking over the savings clause: except through licensing and similar laws. So that's not a real reservation by Congress of this power to itself.

Carter G. Phillips: Well, if you -- if you interpret the savings clause as I do, which means truly as a supplement to Federal -- Federal adjudication, then it is a very narrow limitation on that basis, because at that point you've already invoked the entirety of the Federal scheme, and it doesn't modify the balance on those broader legal issues, Your Honor.

Chief Justice Roberts: Thank you, counsel. The case is submitted. (Whereupon, at 12:02 p.m., the case in the above-entitled matter was submitted.)