Chamber of Commerce of United States of America v. Whiting
The Supreme Court upheld Arizona's Legal Arizona Workers Act, ruling that federal immigration law does not stop the State from suspending or revoking the business licenses of employers who knowingly hire unauthorized workers, or from requiring all employers to use the federal E-Verify system.
The decision confirmed that a federal law barring most state penalties on employers of unauthorized workers specifically leaves room for states to act through licensing, giving other states a green light to write similar laws targeting businesses that hire unauthorized immigrants.
“There is no basis in law, fact, or logic for deeming a law that grants licenses a licensing law, but a law that suspends or revokes those very licenses something else altogether.”
Rejecting the argument that a law is only a 'licensing law' if it grants licenses rather than revoking them.
How it got here: A federal trial court and the Ninth Circuit both rejected the preemption challenge and upheld Arizona's law; the business groups asked the Supreme Court to review that ruling.
The Case in Depth
What happened
The Chamber of Commerce and several business and civil rights groups challenged Arizona's Legal Arizona Workers Act, which lets state courts suspend or revoke the business licenses of Arizona employers who knowingly or intentionally hire unauthorized immigrants, and which requires every Arizona employer to check new hires through the federal E-Verify system. The challengers argued federal immigration law barred Arizona from imposing these penalties and this mandate.
The question before the Court
Could Arizona punish businesses that knowingly hire unauthorized immigrants by suspending or revoking their state licenses, and require every employer to use the federal E-Verify system, without running into conflict with federal immigration law?
Why it matters
Arizona employers face the loss of the licenses they need to operate if they knowingly or intentionally hire unauthorized workers, including a permanent shutdown for repeat violations. The ruling also cleared the way for other states to pass similar licensing-based sanctions and mandatory E-Verify laws, reshaping how immigration enforcement touches ordinary businesses nationwide.
What changes now
This is a final merits decision, so Arizona's licensing sanctions and E-Verify mandate remain in effect and Arizona employers must continue complying with both. The ruling gave other states legal footing to enact similar licensing-based sanctions or E-Verify mandates targeting employers of unauthorized workers, an issue that continued to generate litigation over the following years, including later disputes over Arizona's broader immigration enforcement efforts.
What this does not decide
The Court did not decide whether Arizona's law would survive if it went further than it did here—for example, if it authorized sanctions without relying entirely on federal determinations of a worker's status, or if a state made E-Verify mandatory in a way that overwhelmed the federal system nationwide. The dissents warned the majority's reasoning could be stretched further than the majority intended.
Concurrences and dissents
Concurrence in part — Justice Thomas
Justice Thomas joined the parts of the opinion holding that Arizona's licensing law is not expressly or impliedly preempted and that the E-Verify mandate is not impliedly preempted based on the statutory text, but he did not join the sections addressing broader implied-preemption arguments about balancing policy goals, since he generally views implied preemption doctrine with skepticism.
Dissent — Justice Breyer
Justice Breyer argued Arizona's law swept too broadly by defining 'license' to include articles of incorporation and partnership certificates, letting the state turn nearly any business permission into a licensing law and effectively gutting the federal preemption rule. He also argued the mandatory E-Verify requirement conflicted with Congress's deliberate choice to keep the program voluntary, citing the system's error rates and Congress's cautious, incremental approach to expanding it.
Dissent — Justice Sotomayor
Justice Sotomayor argued that Congress built a comprehensive, centralized federal system for determining who counts as an unauthorized worker and deliberately withheld from states the information needed to make that call themselves, so the licensing exception should only allow states to act after a final federal determination of a violation. She agreed with Breyer that the E-Verify mandate was preempted, emphasizing the federal government's own stated cost and policy reasons for keeping the program voluntary.
How the Court got there
The legal reasoning, step by step
- The Court first looked at the text of the federal law's preemption clause, which blocks states from imposing civil or criminal sanctions on employers of unauthorized workers but explicitly carves out an exception for sanctions imposed 'through licensing and similar laws.'
- Because Arizona's law defines 'license' in terms closely tracking the federal Administrative Procedure Act's own definition, and because the authority to grant a license logically includes the authority to suspend or revoke it, the Court found the law fits within that licensing exception rather than being an outright banned sanction.
- Turning to whether the law conflicts with federal law even though it fits the licensing exception (a separate doctrine called implied preemption, which asks whether a state law gets in the way of what Congress was trying to accomplish), the Court found that Arizona's law mirrors federal law closely: it uses the same definition of 'unauthorized alien,' relies exclusively on federal determinations of a worker's status, and offers the same good-faith defense federal law does.
- The Court distinguished the Chamber's cited precedents involving foreign policy, patents, and maritime regulation, explaining those cases involved areas of uniquely dominant federal interest and direct interference with federal programs, neither of which applies to ordinary business licensing.
- On the mandatory E-Verify requirement, the Court read the federal statute's 'voluntary' language as restricting only what the federal Secretary of Homeland Security could require of employers, not what a state could require of businesses within its own borders, and noted that Congress had continued to expand and encourage E-Verify's use.
- Concluding that Arizona's program tracked the federal scheme rather than undermining it, the Court found no conflict sufficient to displace the state law under implied preemption principles.
Doctrinal impact
Cases affected by this decision
Reaffirms De Canas v. Bica (424 U. S. 351)
The Court relied on this 1976 case's recognition that states have broad police power to regulate employment of unauthorized workers.
Distinguishes Buckman Co. v. Plaintiffs' Legal Comm. (531 U. S. 341)
The Court said this case involved a uniquely federal area (fraud on a federal agency) unlike ordinary state business licensing.