The opinion is available here, all 69 pages of it. I will update this page as I make my way through the opinion. The Court affirms the 9th Circuit by a vote of 5-3. The Chief wrote for the majority. Justice Thomas did not join one part dealing with implied preemption (though he did not write a concurring opinion–tease). Justice Kagan recused. Justice Breyer filed a dissenting opinion, joined by Justice Ginsburg. Justice Sotomayor filed her own dissent.

Here, the Chamber of Commerce loses with the votes of the 5 conservative justices. Go figure.

Chief Justice Robert’s Majority Opinion

Chief Justice Roberts wrote the majority opinion for 5 members. However Justice Thomas did not join part II-B, which discussed implied preemption. Thomas also did not join III-B. Curiously, Justice Thomas did not write a concurring opinion. So effectively, he just disagreed, but did not provide an alternate take.

First, the Court found that Arizona had the authority to enact the state law, as the IRCA (Immigration Reform and Control Act) “preserves state authority to impose sanctions “through licensing and similar laws.” §1324a(h)(2). That is what the Arizona law does—it instructs courts to suspend or revoke the business licenses of in-state employers that employ unauthorized aliens.”

The court finds the state law in question a licensing law.

The state statute also includes within its definition of “license” documents such as articles of incorporation, certificates of partnership, and grants of authority to foreign companies to transact business in the State, Ariz. Rev. Stat. Ann. §23–211(9), each of which has clear counterparts in APA and dictionary definitions of the word “license.” And even if a law regulating articles of incorporation and the like is not itself a “licensing law,” it is at the very least “similar” to one, and therefore comfortably within the savings clause. The Chamber’s argument that the Arizona law is not a “licensing” law be-cause it operates only to suspend and revoke licenses rather than to grant them is without basis in law, fact, or logic.

The Court rejects the Chamber’s argument that the savings clause only applies following an IRCA adjudication by Congress:

The Chamber contends that the savings clause should apply only to certain types of licenses or only to license revocation following an IRCA adjudication because Congress, when enacting IRCA, eliminated unauthorized worker prohibitions and associated adjudication procedures in another federal statute. But no such limits are even remotely discernible in the statutory text

The Court also rejects the Chamber’s reliance on legislative history:

The Chamber’s reliance on IRCA’s legislative history to bolster its textual and structural arguments is unavailing given the Court’s conclusion that Arizona’s law falls within the plain text of the savings clause.

In Part II-B, the part Justice Thomas did not join, four justices addressed implied preemption.

The Arizona licensing law is not impliedly preempted by federal law. At its broadest, the Chamber’s argument is that Congress intended the federal system to be exclusive. But Arizona’s procedures simply implement the sanctions that Congress expressly allowed theStates to pursue through licensing laws. Given that Congress specifically preserved such authority for the States, it stands to reasonthat Congress did not intend to prevent the States from using appropriate tools to exercise that authority.

The Court rejected the Chamber’s argument that the Arizona law disrupts the federal-state balance Congress created with IRCA.

The Chamber’s more general contention that the Arizona law ispreempted because it upsets the balance that Congress sought to strike in IRCA also fails. The cases on which the Chamber relies in making this argument all involve uniquely federal areas of interest, see, e.g., Buckman Co. v. Plaintiffs’ Legal Comm., 531 U. S. 341. Regulating in-state businesses through licensing laws is not such an area. And those cases all concern state actions that directly interfered with the operation of a federal program, see, e.g., id., at 351. There is no similar interference here.

The Court also rejected the Chamber’s argument that employers will err on the side of dis-crimination rather than risk the “‘business death penalty’” by “hiring unauthorized workers.”

The Chamber asserts that employers will err on the side of discrimination rather than risk the “ ‘business death penalty’ ” by “hiring unauthorized workers.” That is not the choice. License termination is not an available sanction for merely hiring unauthorized workers, but is triggered only by far more egregious violations. And because the Arizona law covers only knowing or intentional violations, an employer acting in good faith need not fear the law’s sanctions. Moreover, federal and state antidiscrimination laws protect against employment discrimination and provide employers with a strong incentive not to discriminate. Employers also enjoy safe harbors from liability when using E-Verify as required by the Arizona law. The most rational path for employers is to obey both the law barring the employment of unauthorized aliens and the law prohibiting discrimination. There is no reason to suppose that Arizona employers will choose not to do so.

Speaking for the five members in III-A, the Chief finds that the Arizona law does not conflict with the federal scheme.

Moreover, Arizona’s use of E-Verify does not conflict with the federal scheme. The state law requires no more than that an employer, after hiring an employee, “verify the employment eligibility of theemployee” through E-Verify. Ariz. Rev. Stat. Ann. §23–214(A). And the consequences of not using E-Verify are the same under the state and federal law—an employer forfeits an otherwise available rebuttable presumption of compliance with the law.

In Part III-B, which Justice Thomas did not join, the Chief writes that Arizona’s law did not obstruct the aims of E-Verify.

Arizona’s requirement that employers use E-Verify in no way obstructs achieving the aims of the federal program. In fact, the Government has consistently expanded and encouraged the use of E-Verify, and Congress has directed that E-Verify be made available inall 50 States. And the Government has expressly rejected the Chamber’s claim that the Arizona law, and those like it, will overload the federal system.

I will need to parse further the spots where Thomas joined, and did not join.

Justice Breyer’s Dissent

Justice Breyer finds that IRCA preempts the state law, and the state law is not an exempted licensing law.

The federal Immigration Reform and Control Act of1986 (Act or IRCA) pre-empts “any State or local law imposing civil or criminal sanctions (other than throughlicensing and similar laws) upon those who employ, or recruit, or refer for a fee for employment, unauthorized aliens.” 8 U. S. C. §1324a(h)(2). The state law before us, the Legal Arizona Workers Act, imposes civil sanctions upon those who employ unauthorized aliens. See Ariz. Rev. Stat. Ann. §23–211 et seq. (West Supp. 2010). Thus the state law falls within the federal Act’s general pre-emption rule and is pre-empted—unless it also falls within that rule’s exception for “licensing and similar laws.” Unlike the Court, I do not believe the state law falls within this exception, and I consequently would hold it pre-empted.

Breyer does not find the term “license” to be as broad as the majority, and Arizona determined.

Congress did not intend its “licensing” language to create so broad an exemption, for doing so would permit States to eviscerate the federal Act’s preemption provision, indeed to subvert the Act itself, by undermining Congress’ efforts (1) to protect lawful workers from national-origin-based discrimination and (2) to protect lawful employers against erroneous prosecution or punishment.

Breyer quibbles with the majority over dictionary definitions of “licensing.” He finds three competing goals of the IRCA based on the legislative history:

First, it seeks to discourage American employers from hiring aliens not authorized to work in the United States. Second, Congress wished to avoid “placing an undue burden on employers,” id., at 90, and the Act seeks to prevent the “harassment” of “innocent employers,” Third, the Act seeks to prevent employers from disfavoring job applicants who appear foreign.

Unlike the majority, Breyer finds that the state and federal law are quite different, and “part company” beyond forbidding the employment of unauthorized aliens, and providing employers with a defense.

First, the state statute seriously threatens the federal Act’s anti discriminatory objectives by radically skewing the relevant penalties . . . Second, Arizona’s law subjects lawful employers to increased burdens and risks of erroneous prosecution.. . .
And that is my basic point. Either directly or through the uncertainty that it creates, the Arizona statute will impose additional burdens upon lawful employers and consequently lead those employers to erect ever stronger safeguards against the hiring of unauthorized aliens—without counterbalancing protection against unlawful discrimination. And by defining “licensing” so broadly, by bringing nearly all businesses within its scope, Arizona’s statute creates these effects statewide.

Justice Breyer notes that the likely intended, and actual aim, of this law is stopping the hiring of unauthorized aliens, and the expense of discrimination

Such laws might prove more effective in stopping the hiring of unauthorized aliens. But they are unlikely to doso consistent with Congress’ other critically important goals, in particular, Congress’ efforts to protect from discrimination legal workers who look or sound foreign. That is why we should read the federal exemption’s “licensing” laws as limited to those that involve the kind of licensing that, in the absence of this general state statute, would nonetheless have some significant relation to employment or hiring practices. Otherwise we read the federal “licensing” exception as authorizing a State to undermine, if not to swallow up, the federal pre-emption rule.

With respect to E-Verify, which is optional under the federal regime, but mandatory under the Arizona Law, Breyer finds the state law stands “as a significant “‘obstacle to the accomplishment and execution of the full purposes and objectives of Congress,’” and it is consequently pre-empted.”

In co-opting a federal program and changing the key terms under which Congress created that program, Arizona’s mandatory state law simply ignores both the federal language and the reasoning it reflects, thereby posing an “‘obstacle to the accomplishment’” of the objectives Congress’ statute evinces. Crosby, supra, at 373 (quoting Hines, supra, at 67)

Breyer pithily replies to the majority’s argument that mandating E-erify is not an obstacle to congressional purposes—his points basically boil down to the assertion that it is up to Congress, and not the Court, to determine what Congress thinks about a program (oh irony indeed).

The majority reaches a contrary conclusion by pointing out (1) that Congress has renewed the E-Verify program several times, each time expanding its coverage, to the point where it now encompasses all 50 States; (2) that the E-Verify database has become more accurate; (3) that the Executive Branch has itself mandated participation for federal contractors; and (4) that the statute’s language tells the Secretary of Homeland Security, not the States, to maintain the program as voluntary.

The short, and, I believe, conclusive answers to these objections are: (1) Congress has kept the language of the statute—and the voluntary nature of the program—the same throughout its program renewals. And it is up to Congress, not to Arizona or this Court, to decide when participation in the program should cease to be voluntary. . . . (2) The studies and reports have repeatedly found both (a) that the E-Verify program had achieved greater accuracy, but (b) that problems remain. And it is up to Congress, not to Arizona or this Court, to determine when the federally designed and federally run E-Verify program is ready for expansion.
(3) Federal contractors are a special group of employers, subject to many special requirements, who enter voluntarily into a special relation with the Government. For the Federal Government to mandate that a special group participate in the E-Verify program tells us little or nothing about the effects of a State’s mandating that nearly every employer within the State participate—as Arizona has done. And insofar as we have not determined whether the Executive was authorized by Congress to mandate E-Verify for federal contractors, it says nothing about Congress’ intent.
(4) There is no reason to imply negatively from language telling the Secretary not to make the program mandatory, permission for the States to do so.

I find it a bit rich that Justice Breyer hesitates reading into Congressional action, and inaction. This is one of his trademark jurisprudential techniques.

Justice Sotomayor’s Dissent

Justice Sotomayor’s dissent focuses the comprehensive scheme of the IRCA, and finds that the majority’s interpretation of the savings clause cannot be reconciled with this congressional intent. Further, Sotomayor would find that a “final federal determination” must be made before a state can impose any sanctions.

This reading of the saving clause cannot be reconciled with the rest of IRCA’s comprehensive scheme. Having constructed a federal mechanism for determining whether someone has knowingly employed an unauthorized alien, and having withheld from the States the information necessary to make that determination, Congress could not plausibly have intended for the saving clause to operate in the way the majority reads it to do. When viewed in context, the saving clause can only be understood to preserve States’ authority to impose licensing sanctions after a final federal determination that a person has violated IRCA by knowingly employing an unauthorized alien. Because the Legal Arizona Workers Act instead creates a separate state mechanism for Arizona state courts to determine whether a person has employed an unauthorized alien, I would hold that it falls outside the saving clause and is pre-empted.

Sotomayor would also find the mandatory usage of E-Verify to be preempted.

I would also hold that federal law pre-empts the provision of the Arizona Act making mandatory the use of E-Verify, the federal electronic verification system. By requiring Arizona employers to use E-Verify, Arizona has effectively made a decision for Congress regarding use of a federal resource, in contravention of the significant policy objectives motivating Congress’ decision to make participation in the E-Verify program voluntary.

Justice Sotomayor alone finds that a federal determination must be made prior to imposing any sanctions.

To render IRCA’s saving clause consistent with the statutory scheme, I read the saving clause to permit States to impose licensing sanctions following a final federal determination that a person has violated §1324a(a)(1)(A) by knowingly hiring, recruiting, or refer ring for a fee an unauthorized alien.8

Sotomayor agrees with Breyer’s dissenting opinion about implied preemption but writes separately to “add a few additional observations.” Mainly, she seeks to distinguish this case from implied preemption cases like Mazda v. Williamson, that permits regulations between private parties and the state, not with the federal government.

As we have recently recognized, that a state law makes mandatory something that federal law makes voluntary does not mean, in and of itself, that the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,”
…
This case, however, is readily distinguishable from cases like Williamson, in which state law regulates relationships between private parties. Here, the Arizona Act directly regulates the relationship between the Federal Government and private parties by mandating use of a federally created and administered resource. This case thus implicates the “uniquely federal interes[t]” in managing use of a federal resource.