Case 5:08-cv-00109-C Document 1 Filed 02/01/2008 Page 1 of 30

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

(I) CHAMBER OF COMMERCE OF THE UNITED )

STATES OF AMERICA;

)

(2) OKLAHOMA STATE CHAMBER OF

)

COMMERCE AND ASSOCIATED INDUSTRIES; )

(3) GREATER OKLAHOMA CITY CHAMBER OF )

COMMERCE;

)

(4) METROPOLITAN TULSA CHAMBER OF

)

COMMERCE, INC.;

)

(5) OKLAHOMA RESTAURANT ASSOCIATION; )

and

)

(6) OKLAHOMA HOTEL AND LODGING

)

ASSOCIATION,

)

)

Plaintiffo,

)

)

v.

)

)

(1) BRAD HENRY, in his official capacity as Governor)

of the State ofOklahorna;

)

(2) W.A. DREW EDMONDSON, in his official

)

capacity as Attorney General of the State of Oklahoma; )

(3) KEITH MCARTOR, (4) STAN EVANS, (5) MARK)

ASHTON, (6) ANN CONG-TANG, (7) ELVIA

)

HERNANDEZ, (8) RITA MAXWELL, (9) TERESA )

RENDON, (10) SAMMIE VASQUEZ, SR., and

)

(11) JUANITA WILLIAMS, in their official capacities )

as Members of the Oklahoma Human Rights

)

Commission; and

)

(12) THOMAS E. KEMP, JR., (13) JERRY JOHNSON, )

and (14) CONSTANCE IRBY, in their official

)

capacities as Members of the Oklahoma Tax

)

Commission,

)

)

Defendants.

)

No. _ _ _ _ __

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Case 5:08-cv-00109-C Document 1 Filed 02/01/2008 Page 2 of 30
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Plaintiffs the Chamber of Commerce of the United States of America, the Oklahoma State Chamber of Commerce and Associated Industries (d/b/a The State Chamber of Oklahoma), the Greater Oklahoma City Chamber of Commerce, the Metropolitan Tulsa Chamber of Commerce (d/b/a the Tulsa Metro Chamber), the Oklahoma Restaurant Association, and the Oklahoma Hotel and Lodging Association (collectively "Plaintiffs"), by the undersigned attorneys, bring this civil action for declaratory and injunctive relief, and allege as follows:
PRELIMINARY STATEMENT 1. Plaintiffs bring this action to obtain declaratory and injunctive relief to prevent implementation of Sections 7 and 9 of the Oklahoma Taxpayer and Citizen Protection Act of 2007, H.B. 1804 ("H.B. 1804" or "the Act"), on the ground that they are preempted by federal law and unconstitutional under the Supremacy Clause of the United States Constitution. In particular, the Act (a) is expressly preempted by the Immigration Reform and Control Act of 1986 ("IRCA"), 8 U.S.C. § 1324a; (b) intrudes on a field reserved exclusively to the federal government insofar as Oklahoma seeks to legislate regarding employer verification of immigration status, an arena where the federal government, through numerous statutes and regulations, has exercised exclusive control; and (c) conflicts with the purposes and operation of federal law, including, inter alia, the Department of Homeland Security's "Basic Pilot Program" and the Social
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Security Administration's "Social Security Number Verification Service", and makes it impossible for businesses to comply with both federal and state law.
JURISDICTION AND VENUE 2. This case arises under the Constitution and laws of the United States, and thus this Court has jurisdiction pursuant to 28 U.S.c. §§ 1331 and 1343 and 42 U.S.C. § 1983. 3. This Court has authority to issue a declaratory judgment and order other relief that is just and proper pursuant to 28 U.S.C. §§ 2201 and 2202. 4. The United States District Court for the Western District of Oklahoma is a proper venue for this action pursuant to 28 U.S.C. § 1391(b) because a substantial part of the events giving rise to this action occurred in the Western District of Oklahoma.
PARTIES 5. Plaintiff the Chamber of Commerce of the United States of America ("U.S. Chamber") is a non-profit corporation incorporated under the laws of the District of Columbia, with its principal place of business in Washington, D.C. The U.S. Chamber is the nation's largest federation of businesses and associations, with an underlying membership of more than three million businesses and professional organizations of every size and in every relevant economic sector and geographic region. The U.S. Chamber advocates for the business interests of its members, including filing lawsuits to protect its members' interests by challenging federal, state, and local laws that adversely affect those interests.
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6. Plaintiff the Oklahoma State Chamber of Commerce and Associated Industries, which does business as The State Chamber of Oklahoma ("The State Chamber"), is a non-profit corporation incorporated under the laws of Oklahoma, with its headquarters in Oklahoma City, Oklahoma. The State Chamber is a membership organization with over 1,200 members in the State of Oklahoma. The State Chamber advocates for the business interests of its members, including challenging in court laws that adversely affect those interests.
7. Plaintiff the Greater Oklahoma City Chamber of Commerce ("Oklahoma City Chamber") is a non-profit corporation incorporated under the laws of Oklahoma, with its headquarters in Oklahoma City, Oklahoma. The Oklahoma City Chamber, which employs over 60 people in the State of Oklahoma, is a membership organization with approximately 4,500 members in the State of Oklahoma. The Oklahoma City Chamber advocates for the business interests of its members, including challenging in court laws that adversely affect those interests.
8. Plaintiff the Metropolitan Tulsa Chamber of Commerce, which does business as the Tulsa Metro Chamber, is a non-profit corporation incorporated under the laws of Oklahoma, with its headquarters in Tulsa, Oklahoma. The Tulsa Metro Chamber, which employs 48 people in the State of Oklahoma, is a membership organization with approximately 2,800 members in the State of Oklahoma. The Tulsa Metro Chamber advocates for the business interests of its members, including challenging in court laws that adversely affect those interests.
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9. Plaintiff the Oklahoma Restaurant Association ("ORA") is a nonprofit corporation incorporated under the laws of Oklahoma, with its headquarters in Oklahoma City, Oklahoma. The ORA, which employs 15 people in the State of Oklahoma, is a membership organization with approximately 1,200 members in the food service industry in the State of Oklahoma. The ORA advocates for the business interests of its members, including challenging in court laws that adversely affect those interests.
10. Plaintiff the Oklahoma Hotel and Lodging Association ("OH&LA") is a non-profit corporation incorporated under the laws of Oklahoma, with its headquarters in Oklahoma City, Oklahoma. The OH&LA, which employs 15 people in the State of Oklahoma, is a membership organization with approximately 200 members in the hospitality industry in the State of Oklahoma. The OH&LA advocates for the business interests of its members, including challenging in court laws that adversely affect those interests.
11. Defendant Brad Henry ("Governor Henry") is the Governor of the State of Oklahoma. Upon information and belief, Governor Henry has some responsibility for enforcing the provisions of H.B. 1804, including Sections 7 and 9. Governor Henry is sued in his official capacity based upon his duty to execute faithfully the laws of Oklahoma. See Okla. Const. art. 6, § 8.
12. Defendant W.A. Drew Edmondson ("Attorney General Edmondson") is the Attorney General of the State of Oklahoma. Upon information and belief, Attorney General Edmondson has some responsibility for enforcing the provisions of H.B. 1804, including Sections 7 and 9. Attorney General Edmondson is sued in his
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official capacity as the chief law enforcement officer of the state and based in part on his duty to prosecute and defend all actions and proceedings, civil and criminal, in which the State is an interested party. See Okla. Const., art. 6, § 1(a); Okla. Stat. tit. 74, §§ 18, 18b(A) (2007). Attorney General Edmondson's enforcement duties include civil actions against members of any state board or commission for failure to perform their duties as prescribed by statute. Okla. Stat. tit. 74, § 18b(A) (2007).
13. Defendants Keith McArtor, Stan Evans, Mark Ashton, Ann CongTang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Sr. and Juanita Williams are members of the Oklahoma Human Rights Commission ("OHRC"). Upon information and belief, under Okla. Stat. tit. 25, § 1501 et seq. (2007), the OHRC is charged with, inter alia, receiving, investigating and passing upon complaints alleging violations under Section 7(C) of the Act.
14. Defendants Thomas E. Kemp, Jr., Jerry Johnson and Constance Irby are members of the Oklahoma Tax Commission ("OTC"). Upon information and belief, under Okla. Stat. tit. 68, §§ 102, 103, 105,2385.2,2385.15, and 2385.18 (2007), the OTC is charged with enforcing the tax laws of the State of Oklahoma, including Section 9 of the Act.
GENERAL ALLEGATIONS Federal Government Regulation Oflmmigration 15. Pursuant to the United States Constitution's grant of authority to Congress to establish a uniform rule of naturalization, and its exclusive powers over matters of immigration, over the past 200 years Congress has established a
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comprehensive national framework for regulating admission and work authorization of aliens, protecting our country's national and economic security, and defining the role of
u.s. employers in controlling illegal immigration.
16. Beginning with the Naturalization Act of 1790, the federal government has long occupied the field of immigration through a series of federal laws. The many major pieces of federal immigration legislation include the comprehensive 1952 Immigration and Nationality Act ("INA"), which serves as the foundation of current immigration law; the IRCA; the Immigration Act of 1990; the Anti-Terrorism and Effective Death Penalty Act of 1996; the Illegal Immigration Reform and Immigrant Responsibility Act of 1996; the American Competitiveness in the 21st Century Act of 2000; the USA PATRIOT Act of 2001; the Homeland Security Act of 2002; and the REAL ID Act of2005.
17. These and other federal immigration statutes identifY and establish a number of federal agencies-including the Department of Homeland Security, Department of State, Department of Justice, Citizenship and Immigration Service, Immigration and Customs Enforcement, and the Executive Office for Immigration Review-that are charged with the administrative tasks of admitting aliens into the United States, adjudicating immigration benefits, removing deportable aliens, protecting workers from unfair immigration-related employment practices, and enforcing rules against employers that knowingly employ unauthorized workers. These agencies have established a national system of processing centers and administrative tribunals to administer the comprehensive federal regulation of immigration matters. The federal
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government occupies the field of immigration with its substantial volume of statutes, regulations, procedures and administrative guidance.
18. In addition to legislating the conditions of admission, employment and removal of individual aliens, after much legislative debate and consideration, Congress enacted the IRCA in 1986 to establish a uniform nationwide system for employers to verilY the work authorization of their employees. Under that system (the "1-9 Form process"), employers must complete 1-9 Forms and inspect applicant documents that establish both identity and eligibility to work in the United States. The statute requires that an employer must accept any document on a list promulgated by the federal government as long as that document reasonably appears on its face to be genuine.
19. Federal law defines the 1-9 Form process as for use by "employers" to verilY the information of their "employees." It is not supposed to be used to verilY non-employees, including independent contractors.
20. In addition to the 1-9 Form process, which is mandatory, Congress has approved the creation of an experimental electronic verification system known as the "Basic Pilot Program," recently renamed "E-VerilY." Congress has mandated, by statute, that no employer be forced to use this experimental program.
21. The Basic Pilot Program is designed to evaluate whether an automated employment verification system is a feasible and useful tool for assisting employers and the federal government in determining work authorization status.
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22. The Basic Pilot Program allows employers to check identifying information and Social Security numbers provided by employees against an experimental federal database containing Social Security numbers thought to be valid. Federal evaluations of the Basic Pilot Program have revealed that this database is incomplete and contains errors, and particularly undercounts naturalized citizens and work-authorized non-citizens. It also does not correct adequately for Social Security numbers that have been erroneously entered, and for name changes.
23. Because of these problems, the Basic Pilot Program does not provide actual confirmation or nonconfirmation of work eligibility. Rather, a failure to match a name and Social Security number to the information in the database results in only a "tentative nonconfirmation."
24. Federal law provides employees at least two work weeks in which to challenge tentative nonconfirinations and correct any perceived errors. This time may be extended for periods during which the Social Security Administration ("SSA") or Department of Homeland Security ("DHS") are reviewing the tentative nonconfirmation. During this time, employers may not treat the employee as unauthorized.
25. Unlike the 1-9 Form Process-which allows an immediate determination of work authorization based on documents that reasonably appear to be genuine, actual nonconfirmation of work eligibility using the Basic Pilot Program is only possible if the tentative nonconfirmation is confirmed as a result of an administrative review by SSA or DHS, or the employee's failure to contest the tentative nonconfirmation.
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26. As with the 1-9 Fonn process, federal law allows the Basic Pilot Program to be used only for the verification of employees; it is a violation of the Program's rules to use it to verify non-employees or independent contractors.
27. SSA has also created an electronic system known as the "Social Security Number Verification Service" ("SSNVS"), which assists employers in verifying the accuracy of their employees' Social Security numbers for purposes of year-end wage reporting. Use of this system is strictly voluntary.
28. Unlike the Basic Pilot Program, SSNVS is not an approved method of verifying immigration status or employment eligibility. SSNVS is not intended to, and does not, provide any infonnation about immigration status, and it is illegal for employers to use it for any purpose other than year-end wage reporting.
29. It is also illegal to use SSNVS to check the Social Security numbers of any non-employee, including independent contractors.
30. In enacting the IRCA, Congress created a unifonn set of civil and criminal enforcement penalties for employers who knowingly employ unauthorized workers, while simultaneously balancing the need to avoid unduly burdensome requirements on employers, and enacting safeguards to protect employees from discrimination based on national origin and alienage.
a. Under 8 U.S.C. § 1324(e)(4), any person or entity that knowingly hires an unauthorized alien or continues to employ an unauthorized worker once the employer becomes aware of the employee's status, "shall ... pay a civil penalty in an amount of not less than $250 and not more than $2,000 for each unauthorized alien
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with respect to whom a violation of either such subsection occurred, not less than $2,000 and not more than $5,000 for each such alien in the case of a person or entity previously subject to one order under this paragraph, or not less than $3,000 and not more than $10,000 for each such alien in the case of a person or entity previously subject to more than one order under this paragraph."
b. Under 8 U.S.C. § 1324(1)(1), "any person or entity which engages in pattern or practice of violations of [the statute] shall be fined not more than $3,000 for each unauthorized alien with respect to whom such a violation occurs, imprisoned for not more than six months for the entire pattern or practice, or both."
31. Congress has also established a highly structured legislative process that the federal government must follow when attempting to make any changes to the national scheme of employment verification. To ensure that any changes in employer obligations under the IRCA take into account the delicate balance of national interests underlying the statute, the IRCA sets forth a detailed process for any modifications to the employment verification process. See 8 U.S.C. § 1324a(d). Specifically, the IRCA charges the President with monitoring and recommending changes to the employment verification system through detailed written reports to Congress, submitted up to two years in advance of any proposed change. Id.
Oklahoma's Attempt To Regulate Immigration 32. On May 8, 2007, Governor Henry signed the Act into law. The Act became effective on November 1, 2007, with varying implementation dates for its provisions.
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33. Among its many stated purposes, the Act seeks to remove "imped[iments] and obstruct[ions to] the enforcement of federal immigration law." H.B. 1804, § 2.
34. Section 9 of the Act was implemented on November 1, 2007. It requires all businesses in the State of Oklahoma to verifY the work authorization status of each individual independent contractor with whom they contract for the performance of physical services in the State. If an independent contractor does not provide proper verification, the contracting business must withhold, at the highest State marginal tax rate, taxes from the independent contractor's payment, or be liable to the State for the taxes required to have been withheld.
35. Section 7(B) of the Act will be implemented on July 1, 2008. It requires that, in order to receive a contract to do business with the State of Oklahoma, or with any other public entity in the State, an employer must participate in a "Status Verification System" to verifY the work authorization status of all new employees. The Act defines "Status Verification System" to include the Department of Homeland Security's voluntary and experimental Basic Pilot Program, the United States Social Security Administration's SSNVS, and other "similar" electronic verification systems that may exist in the future but do not currently exist.
36. Thus, under Section 7(B), after July 1, 2008, all departments, agencies, or instrumentalities of the State of Oklahoma or political subdivisions of the State of Oklahoma are forbidden from entering into a contract for the physical performance of services within Oklahoma unless the private contractor registers and
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participates in the State's Status Verification System to verify the work eligibility status of all new employees.
37. Section 7(C) of the Act will likewise be implemented on July 1, 2008. It creates a new cause of action for employment discrimination against all employers in the State of Oklahoma. Only those employers who, at the time of discharge, are enrolled in the Status Verification System are exempt from such liability under the Act.
38. Section 7(C) allows the OHRC to investigate and bring suit for civil damages against any employer that (i) discharges a legal employee, and (ii) knows or "reasonably should have known" it was employing an unauthorized worker in the same job classification as the discharged employee. Section 7(C) imposes liability regardless whether the employer knows it is employing an illegal worker, and (unlike federal law) contains no safe harbor for good faith compliance with the 1-9 Form requirements-the only safe harbor is for businesses that use the "Status Verification System" defined in Section 6 of the Act.
HARM TO PLAINTIFFS AND THEIR MEMBERS 39. Plaintiffs incorporate and reallege paragraphs 1 through 38 above, as if set forth fully herein. 40. As membership organizations, the U.S. Chamber, The State Chamber, the Oklahoma City Chamber, the Tulsa Metro Chamber, ORA, and OH&LA have suffered concrete injury caused by the credible threat of the imminent implementation of Sections 7 and 9 of the Act by defendants against their members.
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Such injury may be redressed by an order of this Court declaring Sections 7 and 9 of the Act illegal and unconstitutional and enjoining their enforcement.
41. Each of the Plaintiffs have member businesses that, by virtue of employing individuals in the State of Oklahoma, contracting with individual independent contractors, and/or having or expecting to have contracts with public entities for the performance of services in the State, are subject to Sections 7 and 9 of the Act. These provisions could lead to debarment from State contracts, obligatory withholding of taxes from contractors or tax penalties, and liability for having unknowingly employed an unauthorized worker.
42. ORA, OH&LA, the Oklahoma City Chamber, and the Tulsa Metro Chamber have also suffered concrete injury as employers and businesses in the State of Oklahoma, caused by the credible threat of the imminent implementation of the Act by defendants against them. Such injury may be redressed by an order of this Court declaring Sections 7 and 9 of the Act illegal and unconstitutional.
43. Plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber are subject to Sections 7(B), 7(C), and 9 of the Act by virtue of employing individuals in the State of Oklahoma, contracting with individual independent contractors, and having and expecting to continue to have contracts with public entities for the performance of services in the State. Plaintiff OH&LA employs individuals in Oklahoma and has contracts with individual independent contractors, and thus is subject to Sections 7(C) and 9 of the Act. These provisions could lead to debarment from State
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contracts, obligatory withholding of taxes from contractors or tax penalties, and liability for having unknowingly employed an unauthorized worker.
44. Plaintiffs' and plaintiffs' members' costs to comply with the Act, and other harms, cannot be recovered from the defendants or otherwise recompensed if the Act is declared unconstitutional.
Section 7m): Status Verification System 45. Plaintiffs' members include businesses that have, and reasonably expect to obtain after July 1,2008, contracts with the State of Oklahoma, its subdivisions, or other public entities for the performance of services in the State of Oklahoma. Plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber also have, and reasonably expect to obtain after July 1, 2008, contracts with the State of Oklahoma, its subdivisions, or other public entities for the performance of services in the State of Oklahoma. 46. Plaintiffs' members include businesses that comply with the comprehensive federal 1-9 Form process that allows employers to rely on a variety of documents and combinations of documents that reasonably appear to be genuine, and do not use the Basic Pilot Program or SSNVS. Plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber likewise comply with the federal 1-9 Form process and do not use the Basic Pilot Program or SSNVS. Basic Pilot Program 47. If plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, do not agree to participate in the voluntary
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Basic Pilot Program, they will be automatically debarred from contracts with all public entities, must forfeit contracts with public entities they have already won, and cannot bid on any future· contracts with public entities.
48. Plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, rely on contracts with public entities as a source of revenue. They will be harmed if they are debarred from contracts with public entities.
49. Plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, will be harmed if they are required to use the Basic Pilot Program to avoid debarment from contracts with public entities.
a. Plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, will incur expenses retraining their employees and reorienting their verification procedures to use the Basic Pilot Program prior to the implementation date of Section 7(B), and implementing the Program on an ongoing basis and complying with its rules.
b. There is no fee to join the Basic Pilot Program. Nonetheless, upon information and belief, the costs to set up the Basic Pilot Program, on average, total several hundred dollars, not counting intangible costs such as work hours used to learn the rules of the program (which are not the same as the federal 1-9 Form process) and the technical aspects of its use. Also upon information and belief, the annual operating costs for employers average about $1,800. None of these expenses can be recovered from the defendants if the law is found unconstitutional.
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c. The incompleteness of, and errors in, the Basic Pilot Program database artificially restrict the pool of workers to fewer than those who are actually authorized to work.
d. Upon information and belief, unemployment in Oklahoma is statistically very low, and the labor market is tight. The ability of plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, to fill their workforces will be harmed if they are required to hire from only those whose identifying information and Social Security number correctly appears in the Basic Pilot Program database.
e. During the waiting period following a tentative nonconfirmation of work authorization status, plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, will be forced to incur expenses training and orienting new employees, without being able to confirm whether the employees are actually authorized to work. None of these expenses and sunk costs can be recovered if the individual is later deemed unauthorized.
f. Plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, will also suffer harm when new employees are required to divert their attention and work-hours to addressing problems or discrepancies in the Basic Pilot Program database, rather than devoting their full attention to their responsibilities as employees. None of these expenses and sunk costs can be recovered, regardless whether the individual is later deemed authorized to work.
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SSNVS 50. It is illegal to use SSNVS for purposes of employment eligibility verification, and the system does not provide any information on immigration status. 51. If plaintiffs, or their members, use SSNVS for the purposes required by the Act, they risk civil or criminal prosecution under federal law. 52. Even if use of SSNVS were not illegal under these circumstances, plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, will incur expenses retraining their employees and reorienting their verification procedures to use SSNVS prior to the implementation date of Section 7(B), and implementing SSNVS on an ongoing basis and complying with its rules. None of these costs can be recovered from the defendants if the Act is later deemed unconstitutional. 53. Even if use of SSNVS were not illegal under these circumstances, the database of identifying information and Social Security numbers upon which SSNVS relies is incomplete and prone to errors, and does not contain information on work eligibility. This will artificially restrict the pool of workers to fewer than those who are actually authorized to work. 54. Upon information and belief, unemployment in Oklahoma is statistically very low, and the labor market is tight. The ability of plaintiffs' members, and plaintiffs ORA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, to fill their workforces will be harmed if they are required to hire from only those whose
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identifYing information and Social Security number correctly appears in the SSNVS database.
Section 7(C): Claim for Employment Discrimination 55. Plaintiffs' members, and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, will be harmed by the provisions of Section 7(C) of the Act, which creates a new claim against them for employment discrimination.
a. Plaintiffs' members, and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, comply in good faith with federal law and do not knowingly employ illegal workers. But this is not enough to avoid liability under Oklahoma's law, which imposes civil damages on employers who lack knowledge and do not participate in the Status Verification System.
b. Any accusation of hiring illegal aliens will cause serious monetary and reputational harm to plaintiffs' members, and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber, even if the accusation is unmeritorious, wrong, and unfair.
c. These harms will create strong incentives to settle even baseless accusations to avoid the damage to business and reputation caused by being publicly identified as a suspected employer of illegal aliens.
d. To appropriately manage the increased risk of such harms, and the possibility of liability without knowledge of wrongdoing, plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber
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will be required to set aside reserves, or purchase liability insurance, to account for the new risk of accusations, investigations and suits under this law.
e. These monetary costs are imminent and necessary as prudent means to manage the increases risks to businesses posed by the new claim created by Section 7(C). None of these expenses can be recovered from the defendants if the law is found unconstitutional.
f. The only option that plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber have for preventing the aforementioned business and reputational harms, avoiding liability for unknowing employment of an illegal alien, and avoiding the imminent and necessary risk-management costs that will result, is to use Oklahoma's Status Verification System. This is the only safe harbor under Section 7(C) of the Act.
g. As explained in paragraphs 45-54 (and subparagraphs) of this Complaint, use of the Status Verification System will likewise harm plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber. Those paragraphs are incorporated and realleged as if set forth fully herein.
Section 9: Individual Independent Contractor Provision 56. Plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber will be harmed by Section 9 of the Act, which requires them to verify the work authorization of all individual independent contractors, or be subject to adverse tax consequences that include withholding the
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highest marginal rate of taxes from the contractors' pay, or paying a tax penalty in the

same amount.

57. The services of individual independent contractors are critical to the

businesses of plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro

Chamber, and the Oklahoma City Chamber.

58.

Under federal law, plaintiffs' members and plaintiffs ORA,

OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber are not supposed

to verify the work authorization of non-employees.

59. Plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro

Chamber, and the Oklahoma City Chamber must, therefore, suffer the adverse tax

consequences provided under Section 9 of the Act. These tax provisions will harm

plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the

Oklahoma City Chamber.

a. The withholding requirement will diminish the take-home pay

of individual independent contractors and will make it more expensive to do business as

an individual independent contractor in the State of Oklahoma. This will result in one of

two harmful scenarios for plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa

Metro Chamber, and the Oklahoma City Chamber:

(i) fewer individual independent contractors will be willing or

able to do business in Oklahoma, harming the ability of plaintiffs' members and plaintiffs

ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber to utilize

their services, or

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(ii) plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber will be required to increase the amount paid to individual independent contractors to offset the effects of the new state withholding requirements, which will cost money, result in lost profits, and make it more expensive (and thus more difficult) to do business with individual independent contractors. None of these costs can be recovered from the defendants if the Act is declared unconstitutional.
b. The tax penalty option will, likewise, harm plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber. It will cost money, result in lost profits, and make it more expensive (and thus more difficult) to do business with individual independent contractors. None of these costs can be recovered from the State if the Act is declared unconstitutional.
c. The tax withholding and tax penalty provisions will require plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber to incur expenses related to hiring new employees or assigning new tasks to existing employees to calculate and to remit the new withholding or penalty amounts to the taxing authorities. None of these costs can be recovered from the State if the Act is declared unconstitutional.
* * *
60. Each of the foregoing harms will be suffered imminently through the implementation of the statue and will occur with a high degree of certainty, given the
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61. Each of the foregoing harms to plaintiffs and their members are or will be caused by the execution and enforcement of the Act by defendants Governor Henry, Attorney General Edmonson, and the members of the OHRC and OTC, acting in their official capacities.
62. Each of the foregoing harms is likely to be redressed by a favorable order of this Court. By declaring Sections 7. and 9 of the Act unconstitutional and void, and enjoining their enforcement, the plaintiffs and their members will no longer be subject to the harms caused by enforcement of those Sections.
CLAIMS FOR RELIEF First Claim For Relief (Express Preemption under the Supremacy Clause, U.S. Const. art. VI, d. 2) 63. Plaintiffs incorporate and reallege paragraphs 1 through 62 above, as if set forth fully herein. 64. The IRCA expressly preempts Sections 7 and 9 of the Act. Under 8 U.S.C. § 1324a(h)(2), the IRCA expressly "preempt[sJ 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."
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65. Sections 7 and 9 of the Act impose civil penalties on employers who do not comply with Oklahoma's preferred verification system, or who employ aliens deemed unauthorized to work by Oklahoma's law, by (a) debarring employers from public contracts if they do not use Oklahoma's "Status Verification System" (Section 7(B»; (b) subjecting employers to OHRC investigations and/or lawsuits for civil damages based on the allegation that they know or "reasonably should have lmown" that they employ an illegal alien (Section 7(C»; and (c) imposing tax penalties and withholding requirements upon employers that do not comply with Oklahoma's novel verification requirement for individual independent contractors (Section 9). All three provisions are expressly preempted by federal law.
66. The provisions of Section 7 and 9 are not licensing or similar requirements, nor do they depend on a preexisting finding of liability for knowingly hiring an unauthorized worker under the IRCA.
Second Claim For Relief (Conflict Preemption under the Supremacy Clause, U.S. Const. art. VI, cl. 2)
67. Plaintiffs incorporate and reallege paragraphs 1 through 66 above, as if set forth fully herein.
68. Sections 7(B), 7(C), and 9 of the Act conflict with federal law in violation of the Supremacy Clause because they require actions inconsistent with, and contrary to, federal law.
a. Federal law expressly forbids employers from demanding that employees produce specific documents from the list approved by Congress, or documents
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that do not appear on that list. 8 U.S.C. § 1324a(b)(1)(A). By requiring employers who contract with the State to ensure a particular form of verification, Section 7(B) of the Act conflicts with federal law.
b. Congress has expressly mandated that no employer should be required to use the Basic Pilot Program, see Pub. 1. No. 104-208, § 402(a), 110 Stat. 3009-546, 3009-656, and, under authority of law, the Social Security Administration has forbidden employers from using the SSNVS to verify immigration status, Social Sec. Admin., Social Security Number Verification Service (SSNVS) Handbook (rev. Sept. 2007). Insofar as Sections 7(B) and 7(C)(2) of the Act require employers to use such systems to verify an employee's immigration status, they make it impossible for employers to comply with both state and federal law.
c. Under federal law, only "employers" are supposed to verifY the work authorization status of "employees." See 8 C.F.R. § 274a.1(f)-(g). Insofar as Section 9 of the Act requires businesses to verifY the work authorization status of nonemployees (i.e., individual independent contractors), the Act conflicts with federal law.
69. The Act also conflicts with federal law in violation of the Supremacy Clause because it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.
a. By mandating that employers who seek to contract with public entities in Oklahoma use the Basic Pilot Program or SSNVS to verifY their employees' work authorization status, Sections 7(B) and (C) of the state law restrict the range of verification options allowed by federal law, and thus alter the priorities Congress
25

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has established with respect to the employers' methods of verifYing work authorization status.
b. Under 8 U.S.C. § 1324, Congress comprehensively provides for all civil and criminal penalties employers face for knowingly employing illegal workers. These remedies reflect a careful assessment by Congress of the appropriate incentive structure that is necessary to balance the various policy objectives served by federal immigration law, and are intended to be exclusive. The State's cause of action for employment discrimination in Section 7(C) and its individual independent contractor provision in Section 9 impose additional civil penalties, and as such alter the federal incentive structure and frustrate the execution of the full purposes and objectives of Congress.
c. The State's new cause of action also conflicts with federal law insofar as it requires employers to use the "Status Verification System" as the only safe harbor from suit. Federal law contains no such provision; in fact, the IRCA states that employers are not subject to civil or criminal penalties stemming from their employment of illegal aliens if they have complied "in good faith" with federal verification regulations. 8 U.S.C. § 1324a(a)(I). Those regulations establish a different set of rules for avoiding liability than Oklahoma's "Status Verification System." This conflict undermines Congress's objectives in enacting comprehensive regulations.
d. Federal immigration law does not contemplate the verification of the immigration status of non-employees, including independent contractors. The Act's Section 9 requirement that employers verifY the work
26

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authorization of independent contractors--or withhold from their compensation the highest amount allowed by Oklahoma law, or pay a tax penalty to the State-thus undermines the object and purpose of federal law.
Third Claim For Relief (Field Preemption under the Supremacy Clause, U.S. Const. art. VI, cI. 2)
70. Plaintiffs incorporate and reallege paragraphs 1 through 69 above, as if set forth fully herein.
71. The federal statutory and regulatory scheme governing immigration and work authorization for aliens is so pervasive as to make reasonable the inference that Congress left no room for the states to supplement or change it. Congress has thus occupied the field that Section 7 and 9 of the Act seek to regulate.
72. Oklahoma's attempt to legislate immigration and employer sanctions requirements for employers operating in the State is preempted both by the pervasiveness of the federal regulation in these areas, as well as by the compelling federal interest in establishing a carefully balanced and uniform national immigration policy.
a. Through its enactment of the INA, IRCA, and other immigration legislation, Congress has occupied the field of immigration regulation, particularly relating to employer verification of employees' work authorization status. Congress has carefully considered and balanced the multiple functions of deterring illegal immigration, avoiding excessive burdens on American businesses, and minimizing the possibility of employment discrimination. It has left no room for states to upset this
27

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balance through the enactment of state or local legislation addressing the same subjects upon which Congress has uniformly and comprehensively acted.
b. Oklahoma's Act impermissibly intrudes into this comprehensive federal regulatory scheme. Sections 7 and 9 of the Act completely disregard the mandates of the existing comprehensive federal system of employment verification, including its balance of immigration enforcement, burdens on employers, and antidiscrimination concerns; its range of verification options that employers are authorized and required to accept; and its carefully crafted process for making changes to the existing employment verification requirements and employer sanctions.
c. Furthermore, in enacting the IRCA, Congress created a uniform set of civil and criminal enforcement penalties for employers who violate the verification provisions of federal law and knowingly employ unauthorized workers, thus leaving no room for the State of Oklahoma to impose independent penalties, as it attempts to do in Sections 7 and 9 of the Act.
NECESSITY OF INJUNCTIVE RELIEF 73. Plaintiffs incorporate and reallege paragraphs 1 through 72 above, as if set forth fully herein. 74. The provisions of Section 7 and 9 of the Act are expressly preempted by the IRCA, are preempted by conflict with federal law, and are preempted by incursion in a field that is fully occupied by federal law. Sections 7 and 9 of the Act are therefore unconstitutional and void.
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75. Plaintiffs' members and plaintiffs ORA, OH&LA, the Tulsa Metro Chamber, and the Oklahoma City Chamber will suffer irreparable harm if this Court does not enter an injunction. A party is irreparably harmed when it is subjected to state legislation that is preempted by a comprehensive federal scheme. In addition, the Act's imminent implementation imposes serious costs and burdens on employers.
76. An injunction will not adversely affect the public interest. Indeed, it will serve the public interest.
PRAYER FOR RELIEF WHEREFORE, plaintiffs pray: A. for a declaration pursuant to 28 U.S.C.§ 2201 stating that Sections 7 and 9 of the Act are preempted by federal law, and are invalid, null and void; B. for a preliminary and permanent injunction against the defendants prohibiting execution and enforcement of Sections 7 and 9 of the Act; and C. that this Court grant plaintiffs such other and further relief as may be just and proper, including any other necessary and appropriate injunctive relief. DATED this 1st day of February, 2008.
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O/Counsel:
Robin S. Conrad Shane Brennan
NATIONAL CHAMBER LiTIGATION CENTER, INC.
1615 H Street, N.W. Washington, D.C. 20062 (202) 463-5337

Respectfully Submitted,
Is/Phillip G. Whaley Patrick M. Ryan, OBA No. 7864 Phillip G. Whaley, OBA No. 13371 Daniel G. Webber, Jr., OBA No. 16332
RYAN WHALEY COLDIRON SHANDY PC
900 Robinson Renaissance 119 North Robinson Avenue Oklahoma City, Oklahoma 73102 Telephone: (405) 239-6040 Facsimile: (405) 239-6766 pwhaley@ryanwhaley.com
-and-
Carter G. Phillips, DC No. 264176 pro hac vice pending
Bradford A. Berenson, DC No. 441981 pro hac vice pending
Eric A. Shumsky, DC No. 477926 pro hac vice pending
Robert A. Parker, DC No. 975859 pro hac vice pending
SIDLEY AUSTIN LLP
1501 K Street, N.W. Washington, D.C. 20005 Telephone: (202) 736-8000 Facsimile: (202) 736-8711
ATTORNEYS FOR PLAINTIFFS

30

 
 Case 5:08-cv-00109-C Document 25 Filed 02/20/2008 Page 1 of 40
CASE NO. CIV-08-109-C
IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA
CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA and the OKLAHOMA STATE CHAMBER OF COMMERCE AND ASSOCIATED INDUSTRIES, et al.,
Plaintiffs,
vs.
BRAD HENRY, in his official capacity as Governor of the State of Oklahoma, W. A. DREW EDMONDSON, in his official capacity as Attorney General of the State of Oklahoma, et al.,
Defendants.
MOTION TO DISMISS COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
M. Daniel Weitman, OBA # 17412 Kevin L. McClure, OBA # 12767 Sandra D. Rinehart, OBA # 11873
Assistant Attorneys General Oklahoma Attorney General’s Office
Litigation Section 313 N. E. 21st Street Oklahoma City, Oklahoma 73105 Tele: (405) 521-4274 Fax: (405)521-4518 Dan.Weitman@oag.ok.gov Kevin.McClure@oag.ok.gov Sandra.Rinehart@oag.ok.us Attorneys for Defendants Governor Brad Henry and Attorney General W.A. Drew Edmondson,
February 20, 2008

Case 5:08-cv-00109-C Document 25 Filed 02/20/2008 Page 2 of 40
TABLE OF CONTENTS Page
TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv - viii MOTION TO DISMISS COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PLAINTIFFS’ CLAIMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PROPOSITION I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 THIS COURT DOES NOT HAVE JURISDICTION TO HEAR ANY CHALLENGE TO 68 O.S. § 2385.32. . . . . . . . . . . . . . 5
PROPOSITION II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PLAINTIFFS DO NOT HAVE STANDING TO SUE THE STATE UNDER 25 O.S. § 1313. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PROPOSITION III.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 FEDERALISM AND COMITY PREVENTS THIS COURT FROM DECLARING THE CHALLENGED STATUTES PREEMPTED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1. Ex parte Young. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 2. State Sovereign Interest, the Rational Basis Standard, and Congress; Constitutional Authority. . . . . . . . . . . . 19 a. Oklahoma’s sovereign interests and the rational basis standard of review. . . . . . . . . . . . . . . . . . . . 20 b. Preemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 c. Congress has overstepped its authority under 8 U.S.C. § 1324a(h)(2) and the State’s statutes are reasonable. . . . . . . . . . . . . . . . . . . . . . 23
-ii-

Case 5:08-cv-00109-C Document 25 Filed 02/20/2008 Page 3 of 40 PROPOSITION IV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
EVEN IF CONGRESS DID HAVE CONSTITUTIONAL AUTHORITY TO ABROGATE THE STATE’S SOVEREIGN POLICE POWERS ITS ABROGATION IS LIMITED.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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Case 5:08-cv-00109-C Document 25 Filed 02/20/2008 Page 4 of 40
TABLE OF AUTHORITIES
FEDERAL CASES
Alden v. Maine, 527 U.S. 706 (1999).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 22, 23, 30
Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 80 L. Ed. 688, 56 S. Ct. 466 (1936).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Board of County Comm'rs v. Geringer, 297 F.3d 1108 (10th Cir.2002).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Board of Trustees of the University of Alabama, et al. v. Garrett, et al., 531 U.S. 356 (2001).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 19, 22, 30
City of Boerne v. Flores, 521 U.S. 507 (1997).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 19, 22, 30
Daimler Chrysler Corp. v. Cuno, 126 S. Ct. 1854 (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Dairy Mart Convenience Stores, Inc. v. Nickel, 411 F.3d 367 (2d Cir.2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
DeCanas v. Bica, 424 U.S. 351 (1976).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 24, 25
Dows v. City of Chicago, 11 Wall. 108, 78 U.S. 108, 20 L. Ed. 65 (1871). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Edelman v. Jordan, 415 U.S. 651, 94 S. Ct. 1347 (1974). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Eisenstadt v. Baird, 405 U.S. 438, 92 S. Ct. 1029, 31 L. Ed. 2d 349 (1972). . . . . . . . . . . . . . . . . . . . . . . . . . 21
Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 125 S. Ct. 2611 (2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Case 5:08-cv-00109-C Document 25 Filed 02/20/2008 Page 5 of 40
Fair Assessment in Real Estate Assn., Inc. v. McNary, 454 U.S. 100, 102 S. Ct. 177, 70 L. Ed. 2d 271 (1981). . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Fed. Mar. Comm'n v. S.C. State Ports Auth., 535 U.S. 743 (2002).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Fitzgerald v. Racing Ass'n of Central Iowa, 123 S. Ct. 2156, 156 L. Ed. 2d 97 (U.S. 2003).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Gonzales v. Oregon, 126 S. Ct. 904, 163 L. Ed. 2d 728 (2006).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Green v. Mansour, 474 U.S. 64, 106 S. Ct. 423 (1985). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Gregory v. Ashcroft, 501 U.S. 452, 111 S. Ct. 2395, 115 L. Ed. 2d 410 (1991). . . . . . . . . . . . . . . . . . . . . 15, 20
Hein v. Freedom From Religion Foundation, Inc., 127 S. Ct. 2553 (2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 10, 30
Hunt v. Washington State Apple Adver. Comm'n., 432 U.S. 333 (1977).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Kimel v. Florida Board of Regents, 528 U.S. 62, 120 S. Ct. 631 (2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 19, 22, 30
Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 114 S. Ct. 1673, 128 L. Ed. 2d 391 (1994).. . . . . . . . . . . . . . . . . . . . . . . . 5
Lee v. Western Reserve Psychiatric Habilitation Center, 747 F.2d 1062 (6th Cir.1984).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-v-

Case 5:08-cv-00109-C Document 25 Filed 02/20/2008 Page 6 of 40
Nelson v. Miller, 170 F.3d 641 (6th Cir.1999).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
New York v. U.S., 505 U.S. 144, 112 S. Ct. 2408 (1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Northern Insurance Co. of New York v. Chatham County, 126 S. Ct. 1689 (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 14
Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 104 S. Ct. 900 (1984). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Raines v. Byrd, 521 U.S. 811 (1997).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Raygor v. Regents of University of Minnesota, 534 U.S. 533 (2002).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 16
Rector v. City and County of Denver, 348 F.3d 935 (10th Cir.2003).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S. Ct. 1114 (1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Shell Oil Co. v. Noel, 608 F.2d 208 (1st Cir.1979). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26 (1976).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
U.S. Term Limits, Inc. v. Thornton, 514 U.S. 779 (1995).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
United States v. Bass, 404 U.S. 336, 349, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971).. . . . . . . . . . . . . . . . . . . . . . . . 15
United States v. Sprague, 282 U.S. 716 (1931).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S. Ct. 1858, 146 L. Ed. 2d 836 (2000). . . . . . . . . . . . . . . . . . . . . . . . 15 Warth v. Seldin, 422 U.S. 490 (1975).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Will v. Michigan Dept. of State Police, 491 U.S. 58, 109 S. Ct. 2304, 105 L. Ed. 2d 45 (1989). . . . . . . . . . . . . . . . . . . . . . . . . . 14 Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908).. . . . . . . . . . . . . . . . . . . . . . . . . . 16, 17
STATUTES 8 U.S.C. § 1324a(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 8 U.S.C. § 1324a(h).. . . . . . . . . . . . . . . . . . . . . . . 3, 4, 5, 19, 21, 22, 23, 26, 27, 28, 29, 30 8 U.S.C. § 1324a(h)2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22 8 U.S.C. § 1601(6).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 8 U.S.C., § 1324a(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 25 O.S. § 1313(B), (2). . . . . . . . . . . . . . . . . . . . . . 3, 4, 8, 11, 12, 13, 21, 22, 24, 27, 29, 30 26 U.S.C. § 3402. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 28 U.S.C. 1341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 29 28 U.S.C. § 2201. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 28 U.S.C.A. § 1257. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 29 U.S.C., § 206(d)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 12, 27 31 U.S.C. §§ 3729-3733 (1994 ed.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 40 O.S. § 2-802. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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Case 5:08-cv-00109-C Document 25 Filed 02/20/2008 Page 8 of 40 42 U.S.C. § 1983. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 68 O.S. § 2385.32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 5, 8, 21, 22, 24, 28, 29
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MOTION TO DISMISS COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
COMES NOW, the Defendants, Governor Henry and Attorney General Edmondson,
sued in their “official capacities” to move this Court to dismiss Plaintiffs’ Complaint. In
support of this Motion to Dismiss, Defendants would show this Court the following:
PLAINTIFFS’ CLAIMS
Plaintiffs’ (varies Chamber of Commerce and business associations) have filed their
Complaint for Declaratory and Injunctive Relief against several State officials, all named
only in their “official capacities.” Plaintiffs seek this Court’ s assistance to enjoin two
sections of the Oklahoma Taxpayer and Citizen Protection Act of 2007 (“H.B. 1904" or “the
Act”) from being implemented. They allege section 7 (codified at 25 O.S. § 1313) and
section 9 (codified at 68 O.S. § 2385.32) of that Act are preempted by federal law.
Title 25 O.S. § 1313 (i.e., section 7) effective July 1, 2008, provides:
Public Employers - Status Verification System - Unauthorized Aliens Contracting and Employment Practices A. Every public employer shall register with and utilize a Status Verification System as described in subparagraphs a or b of paragraph 1 of Section 6 of this act to verify the federal employment authorization status of all new employees. B. 1. After July 1, 2008, no public employer shall enter into a contract for the physical performance of services within this state unless the contractor registers and participates in the Status Verification System to verify the work eligibility status of all new employees. 2. After July 1, 2008, no contractor or subcontractor who enters into a contract with a public employer shall enter into such a contract or subcontract in connection with the physical performance of services within this state unless the contractor or subcontractor registers and participates in the Status Verification System to verify information of all new employees. 3. The provisions of this subsection shall not apply to any contracts entered into prior to the effective date of this section even though such contracts may involve the physical performance of services within this state after July 1, 2008.

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C. 1. It shall be a discriminatory practice for an employing entity to discharge an employee working in Oklahoma who is a United States citizen or permanent resident alien while retaining an employee who the employing entity knows, or reasonably should have known, is an unauthorized alien hired after July 1, 2008, and who is working in Oklahoma in a job category that requires equal skill, effort, and responsibility, and which is performed under similar working conditions, as defined by 29 U.S.C., Section 206(d)(1), as the job category held by the discharged employee. 2. An employing entity which, on the date of the discharge in question, was currently enrolled in and used a Status Verification System to verify the employment eligibility of its employees in Oklahoma hired after July 1, 2008, shall be exempt from liability, investigation, or suit arising from any action under this section. 3. No cause of action for a violation of this subsection shall arise anywhere in Oklahoma law but from the provisions of this subsection.
Title 68 O.S. § 2385.32 (i.e., section 9) effective November 7, 2007, provides:
State Income Tax Withholding Requirement for Contracting Entity When Independent Contractor Fails to Provide Documents Verifying Employment Authorization A. If an individual independent contractor, contracting for the physical performance of services in this state, fails to provide to the contracting entity documentation to verify the independent contractor's employment authorization, pursuant to the prohibition against the use of unauthorized alien labor through contract set forth in 8 U.S.C., Section 1324a(a)(4), the contracting entity shall be required to withhold state income tax at the top marginal income tax rate as provided in Section 2355 of Title 68 of the Oklahoma Statutes as applied to compensation paid to such individual for the performance of such services within this state which exceeds the minimum amount of compensation the contracting entity is required to report as income on United States Internal Revenue Service Form 1099. B. Any contracting entity who fails to comply with the withholding requirements of this subsection shall be liable for the taxes required to have been withheld unless such contracting entity is exempt from federal withholding with respect to such individual pursuant to a properly filed Internal Revenue Service Form 8233 or its equivalent. C. Nothing in this section is intended to create, or should be construed as creating, an employer-employee relationship between a contracting entity and an individual independent contractor.
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Plaintiffs allege their member businesses have been (or will be) harmed by those statutes and challenge those Oklahoma statutes on three separate grounds pursuant to 42 U.S.C. § 1983 and 28 U.S.C. § 2201 and 2202.
Plaintiffs’ “First Claim For Relief” alleges that the Immigration Reform and Control Act of 1986 (“IRCA”) [8 U.S.C. § 1324a] preempts both statutes. Specifically, they allege that 8 U.S.C. § 1324a(h)(a) expressly “preempt[s] any State or local law imposing civil or criminal sanctions (other then through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.” (See Complaint “First Claim for Relief”, para. 63-66). Apparently, Plaintiffs equate “civil sanctions” to mean (1) preventing their member business’ from acquiring public contracts with the State if they do not use a federal “Status Verification System” pursuant to 25 O.S. § 1313(B), (2) subjecting their member businesses to Oklahoma Human Rights Commission (“OHRC”) investigations and/or civil lawsuits if they knew or should have known they employ an illegal alien, but then terminate a legal worker without verifying the legal status of the illegal employee with the federal governement, and (3) imposing a state tax and withholdings at a higher level on those member businesses who do not comply with federal employment verification requirements.
Plaintiffs’ “Second Claim For Relief” challenges those statutes on the ground that “[s]ections 7(B) [25 O.S. § 1313(B)] , 7( C) [25 O.S. § 1313( C)], and 9 [68 O.S. § 2385.32] of the Act conflict with federal law in violation of the Supremacy Clause because they require actions inconsistent with, and contrary to federal law.” Specifically, they allege that
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because 8 U.S.C. § 1324a(b)(1)(A) conflicts with both 25 O.S. § 1313 and 68 O.S. § 2385.32 the state statutes are preempted. They also allege that there is a conflict between the Social Security Administration laws (which forbids the use of social security numbers to verify immigration status) and those state statutes which require use of social security number verification for employment purposes if the employer wishes to do business with the State. They allege the Constitution’s Supremacy Clause, “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” (See Complaint “Second Claim for Relief”, para. 67-69).
Plaintiffs’ “Third Claim For Relief” challenges those statutes on “Field Preemption”. They claim that 25 O.S. § 1313 and 68 O.S. § 2385.32 are preempted by Congress’ laws to regulate aliens through the creation of several federal agencies and its occupation of the entire field of immigration. (See Complaint “Third Claim for Relief”, para. 70-76).
Plaintiffs are asking for a declaratory judgment that finds the challenged statutes preempted by federal law and for this Court to issue an injunction that would (1) prevent the State from taxing Plaintiffs’ member businesses if they fail to comply with 68 O.S. § 2385.32; (2) that would protect them from liability under 25 O.S. § 1313( C); and (3) allow them to do business with the State despite 25 O.S. § 1313(B)’s requirements to verify the legal status of their employees. However, this Court should dismiss Plaintiffs’ Complaint based on the following Propositions.
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PROPOSITION I THIS COURT DOES NOT HAVE JURISDICTION TO HEAR ANY CHALLENGE TO 68 O.S. § 2385.32 Title 68 O.S. § 2385.32(A) requires Plaintiffs’ member businesses who do business with “an individual independent contractor” “for the physical performance of services in this state” to withhold state income tax at the top margin for such “individual independent contractor” if the “individual independent contractor” does not provide proper “employment authorization” pursuant to 8 U.S.C. § 1324a(a)(4). Contrary to Plaintiffs’ allegations, Plaintiffs’ member businesses can only be required to withhold such top margin income tax if the “individual independent contractor” does not verify their “employment authorization” pursuant to federal law. No state requirements will cause the Plaintiffs’ member businesses to withhold such top margin income tax; only a determination pursuant to federal law will trigger such top margin income tax withholding. Title 68 O.S. § 2385.32(B) would hold any Plaintiff member business liable for the “top margin income tax” if they fail to comply with the federal “employment authorization” requirements, under subsection (A). This Court does not have jurisdiction to hear any claim challenging this state income tax requirement. Federal District Courts are courts of limited jurisdiction. Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 125 S.Ct. 2611 (2005). They possess only that power authorized by the United States’ Constitution and federal statute. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391
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(1994). The Tax Injunction Act denies this Court jurisdiction to hear any challenge to a state tax.
The Tax Injunction Act [28 U.S.C. § 1341] provides that “[t]he district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” Long before the Tax Injunction Act was enacted, the Supreme Court held that:
“No court of equity will ... allow its injunction to issue to restrain [state officers collecting state taxes], except where it may be necessary to protect the rights of the citizens whose property its taxed, and he has no adequate remedy by the ordinary processes of the law. It must appear that the enforcement of the tax would lead to a multiplicity of suits, or produce irreparable injury, ... before the aid of a court of equity can be invoked.” Dows v. City of Chicago, 11 Wall. 108, 110, 78 U.S. 108, 110, 20 L.Ed. 65 (1871). The Tax Injunction Act “and the decisions of [the Supreme Court] which preceded [that Act], reflect the fundamental principle of comity between federal courts and state governments that is essential to ‘Our Federalism,’ particularly in the area of state taxation.” Fair Assessment in Real Estate Assn., Inc. v. McNary, 454 U.S. 100, 103, 102 S.Ct. 177, 179, 70 L.Ed.2d 271 (1981). The Tax Injunction Act is the embodiment of federalism and comity. As such, not even the legal fiction of Ex parte Young is allowed to overcome a State Official’s sovereign immunity, especially when Congress has emphatically denied federal courts jurisdiction on issues of local taxation. See, e.g., Seminole Tribe of Florida v. Florida, 517 U.S. 44, 71-75, 116 S.Ct. 1114 (1996)(When Congress has enacted laws for an alternative method to remedy
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a federal right, there is no need for the federal courts to use the Ex parte Young doctrine to accomplish the same objective; see also, Proposition III - for when Ex parte Young is appropriate). The Tax Injunction Act denies federal courts jurisdiction as long as there is a “plain, speedy, and efficient state remedy” available to the taxpayer. 28 U.S.C. 1341.
Congress’ intent in enacting that Act was to deny federal courts jurisdiction over State taxation issues. It represents their belief that federal courts should first let the States decide their own tax issues. Plaintiffs can still appeal to the Supreme Court once their State administrative and judicial processes have been exhausted. (28 U.S.C.A. § 1257). Such reasoning satisfies both federalism and comity concerns by allowing the States to first address their own taxation issues, and at the same time preserves a claimant’s rights through an appeal to the Supreme Court, if necessary. Granting the States the first opportunity to address taxation issues can many times avoid Constitutional issues by a mere interpretation of the State’s own statutes or rules.
The “federalism” principles expressed in the Tax Injunction Act are merely an acknowledgment of a State's self- governing rights reflected in the Tenth Amendment. That Amendment prohibits the national government from exercising non-delegated powers that will infringe on the lawmaking autonomy of the states; it provides that “[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” U.S. Const. amend. X. “The Tenth Amendment was intended to confirm the understanding of the people at the time the
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Constitution was adopted, that powers not granted to the United States were reserved to the States or to the people.” United States v. Sprague, 282 U.S. 716, 733 (1931).
Neither the Governor, the Attorney General, nor any member of the Oklahoma Human Rights Commission possess any enforcement authority under 68 O.S. § 2385.32 (See Proposition III - Ex parte Young). But even if they did have enforcement power, the Tax Injunction Act denies this Court the jurisdiction to hear any challenge to the state taxes assessed under 68 O.S. § 2385.32. Therefore, this Court should dismiss Plaintiffs’ claims challenging 68 O.S. § 2385.32.
PROPOSITION II PLAINTIFFS DO NOT HAVE STANDING TO SUE THE STATE UNDER 25 O.S. § 1313 Plaintiffs do not have standing to challenge 25 O.S. § 1313, and any order issued by this Court would violate Article III’s case or controversy requirements. Hein v. Freedom From Religion Foundation, Inc., 127 S.Ct. 2553 (2007). Title 25 O.S. § 1313(A) applies only to “Public employers”; requiring them to “register with and utilize a Status Verification System as described in subparagraphs a or b of paragraph 1 of Section 6 [25 O.S. § 1312]of this act to verify the federal employment authorization status of all new employees.” None of the Plaintiffs have alleged they are a “Public employer”, therefore that section is not in issue in this case. Likewise, Plaintiffs’ standing under subsections B and C of that statute is also dubious.
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Title 25 O.S. § 1313(B)(1) prohibits the state from entering into any contract with a contractor unless that contractor registers and participates in an employee verification system set up by the federal government that is intended to authenticate the legal status of its employees. Title 25 O.S. § 1313(B)(2) prohibits any contractor or subcontractor wanting to do business with the state from entering into any contract with the state unless they register and participate in that federal employment verification system.
Title 25 O.S. § 1313( C)(1) creates a statutory wrongful discharge cause of action against any Oklahoma employer who discharges an employee but retains an illegal alien. Under that statute the employer can only be held liable if the employer “knows or reasonably should have known” the retained employee was an illegal alien. Title 25 O.S. § 1313( C)(2) creates a “safe harbor” or a complete defense to such cause of action if the employer has verified the retained illegal alien’s employment status through a federal employment verification system.
Federal Court subject matter jurisdiction is determined by Article III of the United States Constitution. In order to invoke a federal court’s Article III jurisdiction, a plaintiff must have standing to sue. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)(“[T]he core component of standing is an essential and unchanging part of the case-or- controversy requirement of Article III”); Warth v. Seldin, 422 U.S. 490, 499 (1975)(“Standing” is the threshold question in every federal case, determining the power of the court to entertain the suit”). The question of standing presents a threshold jurisdictional issue, therefore a Court
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may raise the issue sua sponte. See Rector v. City and County of Denver, 348 F.3d 935, 942 (10th Cir.2003). “Standing” has both constitutional and prudential components. See id. For a party to have constitutional standing, there must be: (1) an injury to the party's legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical; (2) a causal relationship between the injury and the challenged conduct; and (3) a likelihood that the injury will be redressed by a favorable decision. id.; see also, Hein v. Freedom From Religion Foundation, Inc., 127 S.Ct. 2553 (2007) (requiring both personal injury traceable to defendants and the availability of meaningful relief). A party has prudential standing if: (1) the party asserts its own rights, not those of third parties; (2) the party's claim is not a general grievance shared equally and generally by all or a large class of citizens; and (3) the party's injury is within the zone of interests the statute or common law claim intends to protect. See Board of County Comm'rs v. Geringer, 297 F.3d 1108, 1112 (10th Cir.2002). Associational or Organizational standing is available when: “(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and ( c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Hunt v. Washington State Apple Adver. Comm’n., 432 U.S. 333, 343 (1977). If a party lacks standing, then the Court should dismiss the claim pursuant to FRCP 12(b)(1) for lack of Article III subject matter jurisdiction.
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Where a declaratory judgment is sought, federal courts can not give a mere advisory opinion as to the validity of a statute or pass upon its constitutionality if no justifiable controversy is presented. See Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 80 L.Ed. 688, 56 S.Ct. 466 (1936). No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies. Raines v. Byrd, 521 U. S. 811, 818 (1997) (quoting Simon v. Eastern Ky. Welfare Rights Organization, 426 U. S. 26, 37 (1976)).
Title 25 O.S. § 1313(B) prohibits the State of Oklahoma from contracting with any contractor or sub-contractor who hires illegal aliens. That is consistent with federal law. The State of Oklahoma does not try to define who is and who is not an illegal alien. The State merely requires contractors and sub-contractors who wish to do business with the state to verify the legal status of their employees through a federal program designed to assist employers in the verification of the legal status of employees it plans to hire after July 1, 2008. In order for Plaintiffs to have standing to seek an injunction or declaratory judgment under 25 O.S. § 1313(B), they would have to admit they are going to violate federal law and hire an illegal alien after July 1, 2008.
Even though Plaintiffs may have a business member who can prove they plan to seek a contract with the State of Oklahoma after July 1, 2008, they would still have to prove they plan to hire an illegal alien after July 1, 2008 and then refuse to verify that prospective employee’s legal status through a federal program that is designed to assist them in not hiring
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illegal aliens. Plaintiffs’ assertion that they would be in violation of federal law if they use the federal verification system is absurd. Oklahoma’s statute does not require “additional documentation”, it only requires use of the federal verification system. Likewise for Plaintiffs to argue that they cannot use a prospective employee’s social security number to verify the legal status of that employee is also absurd. Generally, every employer in the United States when they hire an employee is required to ask that employee for their social security number in order to hire them. (26 U.S.C. § 3402; 8 U.S.C. § 1324a(b)(1)( C)(i); 40 O.S. § 2-802). Oklahoma’s statutes are not in contradiction to federal law, they are instead intended to implement and enforce federal law in the prevention of the hiring of illegal aliens in the State of Oklahoma. Plaintiffs’ alleged injury is conditioned on too many variables that may or may not occur, or based on an assumption that they plan to hire illegal aliens in violation of federal law, and then seek a contract or subcontract with the State. They are in essence asking this Court to assist them to violate federal law. Plaintiffs’ standing to challenge 25 O.S. § 1313(B), is too conjectural and hypothetical, and is premised on their intent to violate federal law.
Title 25 O.S. § 1313( C) creates a statutory wrongful termination cause of action for the benefit of Oklahoma employees who are terminated, but only if the employer retains an illegal alien “who is working in Oklahoma in a job category that requires equal skill, effort, and responsibility, and which is performed under similar working conditions, as defined by 29 U.S.C., Section 206(d)(1), as the job category held by the discharged employee”, but only
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if their employer did not enrolled or use “a Status Verification System to verify the employment eligibility of its employees in Oklahoma hired after July 1, 2008,” but only if that legal worker decides to sue Plaintiffs’ members. Plaintiffs are asking this Court to issue an injunction against the Defendant State Officials, if Plaintiffs’ hire an illegal alien and if Plaintiffs fail to verify the legal status of that illegal alien through a federal program set-up to determine the legal status of aliens, and if Plaintiffs terminate an employee “working in Oklahoma who is a United States citizen or permanent resident alien,” and if that employee then sues one of their member businesses. Plaintiffs’ requested relief is tenuously conditioned on four “if’s” that may or may not happen. Plaintiffs’ standing to challenge 25 O.S. § 1313( C), is too conjectural or hypothetical. Therefore, this Court should dismiss Plaintiffs’ challenge to both 25 O.S. § 1313(B) and ( C).
PROPOSITION III FEDERALISM AND COMITY PREVENTS THIS COURT FROM
DECLARING THE CHALLENGED STATUTES PREEMPTED “Dual sovereignty is a defining feature of our Nation's constitutional blueprint. States, upon ratification of the Constitution, did not consent to become mere appendages of the Federal Government. Rather, they entered the Union with their sovereignty intact.” Fed. Mar. Comm'n v. S.C. State Ports Auth., 535 U.S. 743, 751 (2002). Justice Thomas, writing for the Court in Northern Insurance Co. of New York v. Chatham County, 126 S. Ct. 1689, 1695 (2006), explained “that the immunity of States from suit is a fundamental aspect of the sovereignty which the States enjoyed before the ratification of the Constitution, and which
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they retain today ... except as altered by the plan of the Convention or certain constitutional Amendments. The term Eleventh Amendment immunity . . . is convenient shorthand, but something of a misnomer, for the sovereign immunity of the States neither derives from, nor is limited by, the terms of the Eleventh Amendment.” [emphasis added] (Internal quotes and citations omitted) Id. Justice Thomas’ astute insight on sovereign immunity is but one aspect of what the Courts have termed “federalism”, because “[w]hen the Federal Government asserts authority over a State's most fundamental political processes, it strikes at the heart of the political accountability so essential to our liberty and republican form of government.” Alden v. Maine, 527 U. S. 706, 713 (1999).
“Federalism was our Nation's own discovery. The Framers split the atom of sovereignty. It was the genius of their idea that our citizens would have two political capacities, one state and one federal, each protected from incursion by the other.” U.S. Term Limits, Inc. v. Thornton, 514 U.S 779, 838 (1995) (Kennedy, J., concurring). When “Congress intends to alter the usual constitutional balance between the States and the Federal Government, it must make its intention to do so unmistakably clear in the language of the statute”(Will v. Michigan Dept. of State Police, 491 U.S. 58, 65, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989)), and such alteration must be premised on appropriate Constitutional authority. ((City of Boerne v. Flores, 521 U.S. 507 (1997); Kimel v. Florida Board of Regents, 528 U.S. 62, 120 S.Ct. 631, (2000); Board of Trustees of the University of Alabama, et al. v. Garrett, et al., 531 U.S. 356 (2001)). That clear statement principle applies when Congress “intends
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to pre-empt the historic powers of the States” or when it legislates in “traditionally sensitive areas” that “affec[t] the federal balance.” Will, supra, at 65, 109 S.Ct. 2304 (quoting United States v. Bass, 404 U.S. 336, 349, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971)). In such cases, it is the clear statement principle which reflects “an acknowledgment that the States retain substantial sovereign powers under our constitutional scheme, powers with which Congress does not readily interfere.” Gregory v. Ashcroft, 501 U.S. 452, 461, 464, 111 S.Ct. 2395, 115 L.Ed.2d 410 (1991); Raygor v. Regents of University of Minnesota, 534 U.S. 533, 544 (2002).
Thus, applying the clear statement principle helps “assur[e] that the legislature has in fact faced, and intended to bring into issue, the critical matters involved in the judicial decision.” Will, supra, at 65, 109 S.Ct. 2304. This is obviously important when the underlying issue raises a serious constitutional doubt or problem. See Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 787, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000)(relying in part on clear statement principle to decide the False Claims Act, 31 U.S.C. §§ 3729-3733 (1994 ed.), did not authorize “an action in federal court by a qui tam relator against a State” and avoiding whether such a suit would violate the Eleventh Amendment, an issue raising a serious constitutional doubt); Gregory, supra, at 464, 111 S.Ct. 2395 (relying on clear statement principle to determine that state judges were excluded from the ADEA in order to “avoid a potential constitutional problem” given the constraints on the Court's “ability to consider the limits that the state-federal balance places on Congress'
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powers under the Commerce Clause”); see also, Raygor v. Regents of University of Minnesota, 534 U.S. 533, 544 (2002).
The Eleventh Amendment to the Constitution provides: The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State. U.S. Const. amend. XI.
The Supreme Court has long read that amendment to mean “that an unconsenting State is immune from suits brought in federal courts by her own citizens as well as by citizens of another State.” Nelson v. Miller, 170 F.3d 641, 646 (6th Cir.1999) (quoting Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347 (1974)). Nevertheless, courts have recognized that there is no Eleventh Amendment bar in three instances: (1) where the state has consented to suit; (2) where the application of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908) and its progeny is appropriate; or (3) where Congress has abrogated the state's immunity. Nelson, 170 F.3d at 646.
Without a doubt, the State of Oklahoma has not waived is sovereign immunity in this case. Therefore, this Court must decide whether (1) Ex parte Young allows Plaintiffs to sue these state officials in federal court, and if it does, (2) has Congress, with appropriate Constitutional authority, abrogated the State’s sovereign interests of self-government consistent with the principles of federalism and comity, taking into account the knowledge that our federal government is a government of limited power? [X Amend. Const.].
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(1) Ex parte Young In Ex parte Young, the Supreme Court created an exception to the Eleventh
Amendment for suits seeking equitable or declaratory relief against state officials sued only in their “official capacity”. The reasoning behind the Ex parte Young exception is that “a suit challenging the constitutionality of a state official's action in enforcing state law is not one against the State.” Green v. Mansour, 474 U.S. 64, 68, 106 S.Ct. 423, 426 (1985) (citation omitted ). However, the Ex parte Young exception has been narrowly construed, in accordance with its rationale. The exception is, for example, limited to allegations that state officials violated federal rather than state law. Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 106, 104 S.Ct. 900, 911 (1984); Lee v. Western Reserve Psychiatric Habilitation Center, 747 F.2d 1062, 1066 (6th Cir.1984). In addition, where a plaintiff seeks only to rectify a past wrong and there is no claimed continuing violation of federal law, declaratory relief is not available. Green, 474 U.S. at 73-74, 106 S.Ct. at 428-429.
Moreover, this procedure cannot be applied to an action against any random state official. As noted in Ex parte Young, there must be a connection between the state officer and the enforcement of the act or else the suit will merely make him a representative of the state and therefore improperly making the state a party to the suit. 209 U.S. at 157, 28 S.Ct. 441. A nexus between the violation of federal law and the individual accused of violating that federal law requires more than simply a broad general obligation to prevent a violation. See Shell Oil Co. v. Noel, 608 F.2d 208, 211 (1st Cir.1979) (holding the governor or attorney
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general of a state are not the proper defendants in every action attacking the constitutionality of a state statute merely because they have a general obligation to enforce state laws). When a violation of federal law is alleged, as here, the state official whose actions violate that law is the rightful party to the suit and prospective injunctive relief can only be had against him. See, e.g., Dairy Mart Convenience Stores, Inc. v. Nickel (In re Dairy Mart Convenience Stores, Inc.), 411 F.3d 367, 373 (2d Cir.2005) (State officials were subject to injunction where they refused to give effect to federal bankruptcy law that extended time deadlines for filing a reimbursement claim. A sufficient nexus was established because the state officers oversaw the fund and distribution of claims.)
In essence, the Ex parte Young doctrine simply bypasses the Eleventh Amendment’s bar to the federal courthouse on jurisdictional grounds. ( “The judicial Power shall extend to all Cases, in Law and Equity, arising under the Constitution, the Laws of the United States, and Treaties ....” [Article III, U.S. Const.]). It does not deny a state its reserved sovereign immunity rights under the Tenth Amendment. (“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” [X Amend. U.S. Const.]). Therefore, despite the application of Ex parte Young, a state official sued in his or her “official capacity” is still entitled to raise the sovereign immunity rights of the State as reserved in the Tenth Amendment especially when federalism and comity concerns are at stake.
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(2) State Sovereign Interests, the Rational Basis Standard, and Congress’ Constitutional Authority Even though the Plaintiffs may have properly pled their way into this Court and
eliminated the Eleventh Amendment’s jurisdictional restrictions by suing the designated state officials in their official capacities asking only for prospective equitable relief, this Court must still determine if there is appropriate abrogation of the State of Oklahoma’s sovereign immunity as reserved to it in the Tenth Amendment or whether Congress has overstepped its Constitutional authority in enacting 8 U.S.C. § 1324a(h)(2). See e.g., New York v. U.S., 505 U.S. 144, 112 S.Ct. 2408 (1992). It may (at first glance) seem clear that Congress has expressly spoken and abrogated the State’s sovereign immunity pursuant to 8 U.S.C. § 1324a(h)(2), but such expressed statement must still be based upon appropriate Constitutional authority [Kimel; Garrett; City of Boerne], and that Constitutional authority must still outweigh the State of Oklahoma’s sovereign interests of self-government [X Amend.], because while Congress may have the power to enact laws under our duel system of government that affect the States, only the judiciary can interpret what is Constitutionally appropriate. City of Boerne v. Flores, 521 U.S. 507 (1997); Kimel v. Florida Board of Regents, 528 U.S. 62, 120 S.Ct. 631, (2000); Board of Trustees of the University of Alabama, et al. v. Garrett, et al., 531 U.S. 356 (2001). There is a significant difference between statutory preemption and Constitutional preemption, because a federal law that has no Constitutional authority, or attempts to legislate in a traditional state governmental area, is not appropriate legislation under our Constitution. See New York v. U.S., 505 U.S. 144, 112
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S.Ct. 2408 (1992). Such is the situation in this case where the Plaintiffs are relying solely on statutory language for federal preemption, rather then appropriate constitutional authority to argue Oklahoma’s statutes are preempted.
[a] Oklahoma’s sovereign interests and the rational basis standard of review The State of Oklahoma, as a separate sovereign entity from the national government, is guaranteed “a republican form of government” [U.S. Const., Art. IV, § 4], and “[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” [U.S. Const., X Amend.]; See also, DaimlerChrysler Corp. v. Cuno, 126 S.Ct. 1854 (2006)(“State policymakers retain broad discretion to make policy decisions concerning state spending in different ways depending on their perceptions of wise state fiscal policy and myriad other circumstances”); Gonzales v. Oregon, 126 S.Ct. 904, 163 L.Ed.2d 728 (2006)(The structure and limitations of federalism allow states great latitude under their police powers to legislate as to the protection of lives, limbs, health, comfort, and quiet of all persons); Gregory v. Ashcroft, 501 U.S. at 463, (1991)(It is a power reserved to the States under the Tenth Amendment and guaranteed them by that provision of the Constitution under which the United States “guarantee[s] to every State in this Union a Republican Form of Government.” U.S. Const., Art. IV, § 4). Those Constitutional mandates enumerate, for all the individual States, the right to self-government as long as that self-government does not conflict with the Constitution, or a federal law that has appropriate constitutional authority. [Supremacy
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Clause, Art. VI, cl. 2]. When there appears to be a conflict between the Constitution or a federal law, and a State statute, a Court must determine under what standard of review it must judge the conflict. If the state statute touches on a fundamental right or a specifically enumerated Constitutional mandate, then the Court must judge that conflict under a “strict scrutiny” standard of review. (Eisenstadt v. Baird, 405 U.S. 438, 92 S. Ct. 1029, 31 L. Ed. 2d 349 (1972)). But State governmental classifications that do not target suspect classes or groups or fundamental interests, nor interfere with a constitutionally appropriate federal law, are subject only to the more deferential rational basis review. (Fitzgerald v. Racing Ass'n of Central Iowa, 123 S. Ct. 2156, 156 L. Ed. 2d 97 (U.S. 2003)).
[b] Preemption Plaintiffs allege that 8 U.S.C. § 1324a(h)(2) preempts both 25 O.S. § 1313 and 68 O.S. § 2385.32. Title 8 U.S.C. § 1324a(h)(2) provides: The 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. It is axiomatic that the federal government is a government of limited power. [X Amend. U.S. Const.]. Regardless of how a Court may interpret 8 U.S.C. § 1324a(h)(2)(See Proposition IV), the question remains: Where in the Constitution does Congress have the power to abrogate the State of Oklahoma’s sovereign interests of self-government? Defendants therefore assert that the question before this Court is: Have the Plaintiffs requested relief that infringe on the lawmaking autonomy of the State of Oklahoma [10th
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Amendment] by striking “at the heart of political accountability that is so essential to our liberty and republican form of government”[ Alden, 527 U. S. 706, 713 (1999); see also, the Guarantee Clause], with appropriate constitutional authority? [Boerne, 521 U.S. 507 (1997); Kimel,528 U.S. 62 (2000); Garrett, 531 U.S. 356 (2001)].
Plaintiffs’ Complaint alleges that the Constitution’s “Supremacy Clause” [Art. VI, cl. 2] is the authority for Congress to enact 8 U.S.C. § 1324a . However, the “Supremacy Clause” does not grant Congress the authority to abrogate the state’s sovereignty interests of self-government reserved to the States under the Guarantee Clause and the Tenth Amendment, it merely provides that the “Constitution, and the Laws of the United States which shall be made in Pursuance thereof ... shall be the supreme Law of the Land.” [Art. VI, cl. 2] (emphasis added). The “Pursuance thereof” language requires appropriate Constitutional authority for any law Congress may enact in order for it to be the supreme law of the land. (See Board of Trustees of the University of Alabama v. Garrett, 531 U.S. 356 (2001)(Congress may abrogate the States’ Eleventh Amendment immunity when it both unequivocally intends to do so and acts pursuant to a valid grant of constitutional authority). Therefore, 8 U.S.C. § 1324a(h)(2) cannot abrogate the State of Oklahoma’s sovereignty interests of self-government [X Amend. U.S. Const.] in enacting 25 O.S. § 1313 and 68 O.S. § 2385.32, based upon the Supremacy Clause.
Likewise, the Constitution’s Naturalization Clause does not restrict those two statutes in this case. That clause provides that “Congress shall have Power ... To establish an uniform
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Rule of Naturalization ... throughout the United States.” [Art. I, sec. 8, cl. 4]. Nothing in that clause grants Congress the power to abrogate a state’s sovereignty interest of selfgovernment [X Amend. U.S. Const.] or to tell a state who or how it may conduct business with contractors and sub-contractors; what statutory cause of actions it may enact to protect it’s legal workers, or how it may tax businesses or individuals within the state. That clause merely provides that Congress shall have the power to determine who, and under what conditions, an alien may become a United States’ citizen. DeCanas v. Bica, 424 U.S. 351 (1976). Besides, the Supreme Court has made it clear that “[t]he Eleventh Amendment restricts the judicial power under Article III, and Article I [where the Naturalization Clause is found] cannot be used to circumvent the constitutional limitations placed upon federal jurisdiction”. College Savings Bank, supra, at 672; Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. 627, 636 (1999); Alden v. Maine, 527 U. S. 706, 730-733 (1999). Without proper Constitutional authority to preempt state law this Court is left with no alternative but to analysis the two challenged state statutes under the “rational basis standard”.
[c] Congress has overstepped its authority under 8 U.S.C. § 1324a(h)(2) and the State’s statutes are reasonable
The State of Oklahoma has a sovereign interest in placing reasonable conditions on who it awards contracts to, as long as those conditions are rationally related to legitimate state concerns. The State also has a sovereign right to create any statutory cause of action that it believes protects its legal state workers from discrimination, and to tax state employers
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who hire illegal aliens. The state of Oklahoma has enacted several statutes (two of which are challenged in this case) that attempt to implement federal law (8 U.S.C. § 1601(6)) by discouraging illegal aliens from seeking refuge in this state. One of the ways to discourage such illegal refuge is to eliminate the reasons the illegal aliens seek to come to this state. In this case, Oklahoma’s statutes address those legitimate governmental goals by discouraging employers from hiring illegal aliens. Oklahoma’s laws are rationally based and narrowly tailored to meet those legitimate State governmental goals. A pre-IRCA Supreme Court decision illustrates the State’s sovereignty interest conditions in the employment of illegal aliens (and no-preemption) expressed in both 25 O.S. § 1313 and 68 O.S. § 2385.32.
In the case of DeCanas v. Bica, 424 U.S. 351 (1976), the Court was asked to determine the validity of a California statute that prevents California employers from hiring illegal aliens “if such employment would have an adverse effect on lawful resident workers.” Id. at 352. In an opinion written by Justice Stevens, he held that the Court had “ never held that every state enactment which in any way deals with aliens is a regulation of immigration and thus per se pre-empted by ... constitutional power, whether latent or exercised.” Id. at 355. “[T]he fact that aliens are the subject of a state statute does not render it a regulation of immigration, which is essentially a determination of who should or should not be admitted into the country, and the conditions under which a legal entrant may remain.” Id. at 355. “States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State.” Id. at 356. A State’s power to prohibit
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employment of illegal aliens “is certainly within the mainstream of such police power regulation.” Id. at 356. “In attempting to protect [a State’s] fiscal interests and lawfully resident labor force from the deleterious effects on its economy resulting from the employment of illegal aliens, [California’s statute] focuses directly upon these essentially local problems and is tailored to combat effectively the perceived evils.” Id. at 357.
Even though Justice Stevens seems to indicate that Congress could enact laws ousting state authority to regulate the employment relationship between employers and illegal aliens, “[o]nly a demonstration that complete ouster of state power including state power to promulgate laws not in conflict with federal laws was the clear and manifest purpose of Congress’ would justify that conclusion.” (Internal quotations omitted) Id. at 357. Justice Stevens did not address what constitutional authority Congress would need to enact such laws, nor did he address how far Congress could go under such federal ouster.
As further evidence of the constitutionality of Oklahoma’s statutes, even the federal government has a policy (issued by President Clinton) of only awarding contracts to contractors who do not hire illegal aliens. See Executive Order 12989 of February 13, 1996, 61 Fed. Reg. 6091 (February 15, 1996). Therefore, Defendants would ask this Court to dismiss Plaintiffs’ Complaint because the State of Oklahoma has the sovereign police power to enact the challenged state statutes and Congress’ power to preempt those state laws cannot be premised on either the Supremacy or the Naturalization Clauses.
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PROPOSITION IV EVEN IF CONGRESS DID HAVE CONSTITUTIONAL AUTHORITY TO
ABROGATE THE STATE’S SOVEREIGN POLICE POWERS ITS ABROGATION IS LIMITED
Even if this Court finds that Congress did have appropriate constitutional authority to regulate the employment of illegal aliens, the language of 8 U.S.C. § 1324a(h)(2) does not oust all of the States’ police power in the area. In order for this Court to grant Plaintiffs the relief they request in this case, this Court must still decide the following issue: Do Oklahoma’s challenged statutes create the kind of “civil or criminal sanctions” upon those who employ unauthorized aliens that Congress intended to prohibit?
Title 25 O.S. § 1313(B) prohibits the State of Oklahoma from contracting with any contractor who hires illegal aliens. That is a legitimate state goal based upon the State of Oklahoma’s sovereign police powers. DeCanas at 356. The State attempts to assist potential contractors and sub-contractors who want to do business with them by allowing them to use a federal verification system designed to verify the legal status of potential employees in the United States. Oklahoma’s statute is (in many respects) less restrictive then the federal requirements of 8 U.S.C. § 1324a, in that it does not require the specific “documentation” that the federal statute requires for employment verification. Oklahoma’s statute only requires the use of a federal verification system in order to contract with the State. Such requirements cannot be interpreted to be a “civil or criminal sanction.” Therefore, even though Plaintiffs have alleged total preemption of the State’s sovereign police powers, their
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allegation is not based on either appropriate constitutional authority or the specific federal law’s preemptive language that they allege preempts 25 O.S. § 1313(B).
Title 25 O.S. § 1313( C) creates a statutory wrongful termination cause of action for the benefit of lawful Oklahoma employees who are terminated, but only if the employer retains an illegal alien “who is working in Oklahoma in a job category that requires equal skill, effort, and responsibility, and which is performed under similar working conditions, as defined by 29 U.S.C., Section 206(d)(1), as the job category held by the discharged employee”, but only if the employer was not enrolled or used “a Status Verification System to verify the employment eligibility of its employees in Oklahoma hired after July 1, 2008.” Irrespective of Plaintiffs’ standing problems, 25 O.S. § 1313 ( C) is not preempted by 8 U.S.C. § 1324a(h)(2) because the creation of a state cause of action for failing to verify an employee’s legal status through a federal verification system is not a “civil or criminal sanction ... upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens” under federal law. A state has an inherently sovereign police power to protect its state’s employees “[i]n attempt[] to protect [the State’s] fiscal interests and lawfully resident labor force from the deleterious effects on its economy resulting from the employment of illegal aliens...” DeCanas at 357. That statute “focuses directly upon [those] essentially local problems and is tailored to combat effectively the perceived evils” of illegal aliens taking legal resident’s jobs. DeCanas at 357. Therefore, this Court should dismiss Plaintiffs’
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Complaint because Oklahoma’s statutes are not preempted by federal law and they are a valid exercise of the State’s sovereign police powers reserved to it under the Tenth Amendment.
Title 68 O.S. § 2385.32 (the top marginal income tax rate statute) does not create the kind of “civil or criminal sanction” that Congress intended to preempt under 8 U.S.C. § 1324a(h)(2). That Oklahoma statute merely assesses a state tax withholding in order to protect the State’s legal workers from the “deleterious effects on its economy resulting from the employment of illegal aliens.” DeCanas at 357. The assessment of a state tax can hardly be considered a “civil or criminal sanction.” Only an expressed statement by Congress that abrogated the states ability to tax its citizens and employers with appropriate constitutional authority could suffice to preempt that statute. No such appropriate express statement exits in the language of 8 U.S.C. § 1324a(h)(2). Therefore, this Court should dismiss Plaintiffs’ Complaint because even the language of 8 U.S.C. § 1324a(h)(2) does not preempt Oklahoma’s challenged state statutes.
CONCLUSION This Court should dismiss Plaintiffs claims against Henry, Edmondson and the OHRC members challenging 68 O.S. § 2385.32 because none of those Defendants have any enforcement authority to tax any of Plaintiffs’ member businesses. There is no “case or controversy” and Plaintiffs’ use of Ex parte Young is inappropriate because there is no nexus between these Defendants and Plaintiff’s alleged injuries. No Order by this Court against these Defendants would have any effect; it would only be advisory. While this Court
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could issue a declaratory judgment holding that federal law preempts 68 O.S. § 2385.32, such order would be merely advisory against these Defendants since any Order issue against these Defendants would be futile. Finally (and probably most importantly) this Court should also hold that it lacks jurisdiction to decide the whether federal law preempts 68 O.S. § 2385.32 because any Order issued by this Court against these defendants would be counter to the Tax Injunction Act. 28 U.S.C. § 1341.
Plaintiffs claims against these Defendants pursuant to 25 O.S. § 1313(B) are also dubious. Plaintiffs claims are tenuously conditioned on whether or not a member business bids on a state contract, if they fail to verify the legal status of one of its employees, and if they are awarded that state contract by being the lowest bidder. Furthermore, while these Defendants may enter into contracts with contractors “for the physical performance of services within this state”, these Defendants also possess a sovereign police power to condition those contracts on the legal status of the contractors’ employees. Finally, the conditioning of a contract with the State on the verification of the legal status of the contractors’ employees, is not a “civil or criminal sanction” pursuant to 8 U.S.C. § 1324a(h)(2). Therefore, this Court should dismiss Plaintiffs’ claims challenging 25 O.S. § 1313(B) as preempted by federal law against these Defendants because Plaintiffs injuries are “conjectural and hypothetical”; these Defendants possess a sovereign police power to condition their state contracts on a contractor’s verification of the legal status of its employees; and the conditioning of a state contract on the verification of the legal status of
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a contractors’ employees is not a “civil or criminal sanction” within the meaning of 8 U.S.C. § 1324a(h)(2).
This Court should also dismiss Plaintiffs claims pursuant to 25 O.S. § 1313( C) against these Defendants because neither the Governor nor the Attorney General have any enforcement power to investigate or hold liable an employer who terminates a legal worker while “knowingly” retaining an illegal alien. And, while the Oklahoma Human Rights Commission may have the power to investigate an employer who terminates a legal worker while “knowingly” retaining an illegal alien, they do not have the power to hold the employer liable under the statute; only a court could do that. Therefore, any Order by this Court pursuant to 25 O.S. § 1313( C) would merely be advisory and meaningless against these Defendants. (i.e., no case or controversy). See Ex parte Young’s nexus requirements and Hein v. Freedom From Religion Foundation, Inc., 127 S.Ct. 2553 (2007) (requiring both personal injury traceable to these defendants and the availability of meaningful relief)). Any challenge to 25 O.S. § 1313( C) would infringe on the lawmaking autonomy of the State of Oklahoma [10th Amendment] by striking “at the heart of political accountability that is so essential to our liberty and republican form of government”[ Alden, 527 U. S. 706, 713 (1999); see also, the Guarantee Clause], with appropriate constitutional authority? [Boerne, 521 U.S. 507 (1997); Kimel,528 U.S. 62 (2000); Garrett, 531 U.S. 356 (2001)]. Therefore, this Court should dismiss Plaintiffs’ claims challenging 25 O.S. § 1313( C) against these Defendants.
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Respectfully submitted, s/ Kevin L. McClure M. DANIEL WEITMAN, OBA #17412 KEVIN L. MCCLURE, OBA #12767 SANDRA D. RINEHART, OBA #11873 Assistant Attorneys General Oklahoma Attorney General’s Office Litigation Section 313 N. E. 21st Street Oklahoma City, Oklahoma 73105 Tele: (405) 521-4274 Fax: (405) 521-4518 Dan.Weitman@oag.ok.gov Kevin.McClure@oag.ok.gov Sandra.Rinehart@oag.ok.gov Attorneys for Defendants Governor Brad Henry and Attorney General Drew Edmondson
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CERTIFICATE OF SERVICE

I hereby certify that on February 20, 2008, I electronically transmitted the attached document to the Clerk of Court using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants:

Patrick M. Ryan Phillip G. Whaley Daniel G. Webber, Jr. RYAN WHALEY COLDIRON SHANDY P.C. 900 Robinson Renaissance 119 North robinson Ave. Okalhoma City, OK 73102 Attorneys for Plaintiffs

I further certify that on the above date, I served the attached document by mail on the following who are not registered participants of the ECF system:

Carter G. Phillips Bradford A Berenson Eric A. Shumsky Robert A parker SIDLEY AUSTIN L.L.P. 1501 K Street, N.W. Washington, D.C. 20005 Attorneys for Plaintiffs

s/ Kevin L. McClure M. Daniel Weitman

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 FILED Appellate Case: 08-6127 Document: 01018360129 Date FileUdn:i0te2d/0S2tT/a2et0ne1st0hCCoiuPrrcatugoietf: A1ppeals

February 2, 2010

PUBLISH

Elisabeth A. Shumaker Clerk of Court

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA; OKLAHOMA STATE CHAMBER OF COMMERCE AND ASSOCIATED INDUSTRIES; METROPOLITAN TULSA CHAMBER OF COMMERCE, INC.; GREATER OKLAHOMA CITY CHAMBER OF COMMERCE, INC.; OKLAHOMA RESTAURANT ASSOCIATION; OKLAHOMA HOTEL AND LODGING ASSOCIATION,
Plaintiffs-Appellees,
v.
W.A. DREW EDMONDSON, in his official capacity as Attorney General for the state of Oklahoma; KEITH McARTOR, STAN EVANS, MARK ASHTON, ANN CONG-TANG, ELVIA HERNANDEZ, RITA MAXWELL, TERESA RENDON, SAMMIE VASQUEZ, Sr., and JUANITA WILLIAMS, in their official capacities as members of the Oklahoma Human Rights Commission,
Defendants-Appellants,
and
THOMAS E. KEMP, Jr., JERRY JOHNSON, and CONSTANCE IRBY, in their official capacities as members of the

Nos. 08-6127 & 08-6128

Appellate Case: 08-6127 Document: 01018360129 Date Filed: 02/02/2010 Page: 2
Oklahoma Tax Commission,
Defendants-Appellants.
------------------------AMERICAN CIVIL LIBERTIES UNION; NATIONAL IMMIGRATION LAW CENTER; CHANGE TO WIN; ARIZONA CHAMBER OF COMMERCE AND INDUSTRY; COLORADO ASSOCIATION OF COMMERCE AND INDUSTRY; ILLINOIS CHAMBER OF COMMERCE; INDIANA CHAMBER OF COMMERCE; KANSAS CHAMBER OF COMMERCE; KENTUCKY CHAMBER OF COMMERCE; MISSOURI CHAMBER OF COMMERCE AND INDUSTRY; NEW JERSEY CHAMBER OF COMMERCE; PENNSYLVANIA CHAMBER OF BUSINESS AND INDUSTRY; TENNESSEE CHAMBER OF COMMERCE AND INDUSTRY; TEXAS ASSOCIATION OF BUSINESS; ASSOCIATION OF WASHINGTON BUSINESS; WEST VIRGINIA CHAMBER OF COMMERCE; LAWYERS’ COMMITTEE FOR CIVIL RIGHTS OF THE SAN FRANCISCO BAY AREA; ASIAN AMERICAN LEGAL DEFENSE EDUCATION FUND; ASIAN PACIFIC AMERICAN LEGAL CENTER; CENTRO LEGAL, INC.; IMMIGRATION EQUALITY; LA RAZA CENTRO LEGAL; LEGAL AID SOCIETY-EMPLOYMENT LAW CENTER; NATIONAL CENTER FOR LESBIAN RIGHTS; SOUTHERN POVERTY LAW CENTER; WOMEN’S EMPLOYMENT RIGHTS CLINIC; HUMAN RESOURCE INITIATIVE FOR A LEGAL WORKFORCE; ASSOCIATED BUILDERS AND CONTRACTORS, INC.,
Amici Curiae.

Appellate Case: 08-6127 Document: 01018360129 Date Filed: 02/02/2010 Page: 3
Appeal from the United States District Court for the Western District of Oklahoma (D.C. No. 08-CV-00109-C)
M. Daniel Weitman, Assistant Attorney General (Kevin L. McClure, Assistant Attorney General, and Sandra D. Rinehart, Senior Attorney General, with him on the briefs), Oklahoma Attorney General’s Office, Oklahoma City, Oklahoma, for Defendants-Appellants Edmondson and Human Rights Commissioners.
Guy L. Hurst, Assistant General Counsel, Oklahoma Tax Commission, Oklahoma City, Oklahoma, for Defendants-Appellants Tax Commissioners.
Carter G. Phillips (Eric A. Shumsky, Robert A. Parker, and Brian E. Nelson; and Robin S. Conrad and Shane Brennan, National Chamber Litigation Center, Inc., with him on the briefs), Sidley Austin LLP, Washington, D.C., for PlaintiffsAppellees.
David A. Selden and Julie A. Pace, Ballard Spahr Andrews & Ingersoll, LLP, Phoenix, Arizona, and Burt M. Rublin, Ballard Spahr Andrews & Ingersoll, LLP, Philadelphia, Pennsylvania, filed an Amici Curiae brief for The Human Resource Initiative For a Legal Workforce and Associated Builders and Contractors, Inc.
Patrick J. Szymanski, General Counsel, Change to Win, Washington, D.C., and John M. West, Bredhoff & Kaiser, P.L.L.C., Washington, D.C., filed an Amicus Curiae brief for Change to Win, in support of Appellees.
Lucas Guttentag and Jennifer Chang Newell, America Civil Liberties Union Foundation, Immigrants’ Rights Project, San Francisco, California, Omar Jadwat, American Civil Liberties Union Foundation, Immigrants’ Rights Project, New York, New York, Andrew Tauber, Mayer Brown LLP, Washington, D.C., and Linton Joaquin, Karen C. Tumlin, and Nora A. Preciado, National Immigration Law Center, Los Angeles, California, filed an Amici Curiae brief for American Civil Liberties Union and National Immigration Law Center, in support of Appellees.
Walter Dellinger, Sri Srinivasan, and Justin Florence, O’Melveny & Myers LLP, Washington, D.C., filed an Amici Curiae brief for The Arizona Chamber of Commerce and Industry, The Colorado Association of Commerce and Industry, The Illinois Chamber of Commerce, The Indiana Chamber of Commerce, The
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Kansas Chamber of Commerce, The Kentucky Chamber of Commerce, The Missouri Chamber of Commerce and Industry, The New Jersey Chamber of Commerce, The Pennsylvania Chamber of Business and Industry, The Tennessee Chamber of Commerce and Industry, The Texas Association of Business, The Association of Washington Business, and the West Virginia Chamber of Commerce, in support of Appellees. Kevin M. Fong and Brian J. Wong, Pillsbury Winthrop Shaw Pittman LLP, and Robert Rubin and Nira Geevargis, Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, San Francisco, California, filed an Amici Curiae brief for Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, et al., in support of Appellees.
Before KELLY, LUCERO, and HARTZ, Circuit Judges.
LUCERO, Circuit Judge.
The Oklahoma Taxpayer and Citizen Protection Act of 2007 (the “Act” or the “Oklahoma Act”) is one of a multitude of recent state enactments that regulate illegal immigration and verification of employment eligibility. This case implicates three provisions of the Act. Section 7(B) forces businesses to utilize the Basic Pilot Program to verify the work authorization status of their employees on pain of debarment from contracting with Oklahoma public employers. Section 7(C) makes it a discriminatory practice for an employer to terminate an authorized worker while retaining an employee that the employer knows or reasonably should know is unauthorized to work. Section 9 requires contracting entities either to verify the work eligibility of their individual independent contractors or withhold certain taxes from those contractors. Otherwise, the
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contracting entity is liable to the State for the money not withheld. Plaintiffs, various chambers of commerce and trade associations
(“plaintiffs” or the “Chambers”), challenged Sections 7(B), 7(C), and 9 of the Act. They claimed that all three sections were expressly and impliedly preempted by federal law and moved for a preliminary injunction to bar Oklahoma’s Governor, Attorney General, Human Rights Commission, and Tax Commission (collectively “defendants” or “Oklahoma”) from enforcing the challenged provisions. Defendants opposed a preliminary injunction and moved to dismiss. Oklahoma argued that the Chambers lacked standing, that certain defendants were immune from suit under the Eleventh Amendment, and that the Tax Injunction Act, 28 U.S.C. § 1341, deprived the district court of jurisdiction to enjoin Section 9. The district court denied the motions to dismiss and granted the preliminary injunction. All defendants, save the Governor, appeal.
Faced with the same issues that were before the district court, we conclude: (1) the Chambers have standing; (2) that the Eleventh Amendment precludes the case only insofar as the Attorney General is named as a defendant in the challenge to Sections 7(C) and 9; and (3) the district court properly exercised jurisdiction over the Chambers’ challenge to Section 9. We further hold that the Chambers are likely to succeed on the merits of their claims that Section 7(C) is expressly preempted and that Section 9 is impliedly preempted. Moreover, the remaining considerations favor issuance of a preliminary injunction.
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Although their reasoning differs, my colleagues conclude the district court erred in its determination that Section 7(B) is preempted, and thus the panel reverses the district court’s grant of a preliminary injunction against the enforcement of Section 7(B). I dissent from the judgment of the court on this issue and would hold that Section 7(B) is impliedly preempted and that the issuance of a preliminary injunction was appropriate. Accordingly, this opinion is that of the court except with respect to sections V.B.2 and V.B.4.
We have jurisdiction under the collateral order doctrine to consider the district court’s denial of Eleventh Amendment immunity, P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147 (1993), and under 28 U.S.C. § 1292(a)(1) to review the grant of a preliminary injunction. The panel dismisses in part, reverses in part, and affirms in part.
I This case requires us to consider the interplay between the federal employment verification regime and that of the Oklahoma Act. We begin by outlining these potentially-conflicting systems.
A Enacted in 1986, the Immigration Reform and Control Act (“IRCA”) created “a comprehensive scheme prohibiting the employment of illegal aliens in the United States.” Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 147 (2002). Section 101(a)(1) of IRCA makes it “unlawful for a person or other
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entity . . . to hire . . . for employment in the United States an alien knowing the alien is an unauthorized alien.” 8 U.S.C. § 1324a(a)(1), (a)(1)(A). An “unauthorized alien” is defined as an “alien [who] is not at that time either (A) . . . lawfully admitted for permanent residence, or (B) authorized to be so employed by [IRCA] or by the Attorney General.” § 1324a(h)(3).
Federal law exhaustively details a specialized administrative scheme for determining whether an employer has knowingly employed an unauthorized alien.1 § 1324a(e). An employer that does so is subject to a range of civil and criminal penalties, including fines, § 1324a(e)(4), cease and desist orders, id., and imprisonment, § 1324a(f)(1). Consistent with its comprehensive nature, IRCA includes an express preemption provision: “The 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.” § 1324a(h)(2).
IRCA also establishes an “extensive ‘employment verification system,’ designed to deny employment to aliens who (a) are not lawfully present in the United States, or (b) are not lawfully authorized to work in the United States.” Hoffman Plastic, 535 U.S. at 147 (citations omitted). Known as the I-9 system,
1 Although the parties use varying terminology, because both federal law and the Oklahoma Act use the term “unauthorized alien,” 8 U.S.C. § 1324a(a)(1); Okla. Stat. tit. 25, § 1312(4), we employ that phrase.
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employers are required to verify the identity of their employees and ensure they are eligible to work in the United States by examining certain specified documents. 8 C.F.R. § 274a.2(b). IRCA establishes a list of permissible verification documents, enabling employees to prove eligibility by supplying any document on the list. 8 U.S.C. § 1324a(b)(1)(A)-(b)(1)(D). An employee who submits verification documents that “reasonably appear[] on [their] face to be genuine” may not be required to produce different or additional documents if such requests by employers are made for the purpose or with the intent of discriminating. §§ 1324a(b)(1)(A)(ii), 1324b(a)(6). Federal law further defines the class of individuals who must verify employment eligibility, requiring verification for employees but not for independent contractors. See § 1324a(a)(1)(A); 8 C.F.R. § 274a.1(f) (excluding “independent contractor” from the definition of “employee”); § 274a.1(g) (employers not responsible for verifying work authorization of independent contractors).
Congress opted to create a substantial safe harbor for employers that comply with the I-9 system. 8 U.S.C. § 1324a(b)(6)(A). Unless an employer persists in violating IRCA after being put on notice of its noncompliance or engages in a pattern or practice of violations, § 1324a(b)(6)(B), (C), employers who attempt to comply in good faith are protected from civil and criminal penalties under federal law, § 1324a(b)(6)(A).
The I-9 system was the exclusive employment verification procedure under -8-

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federal law until passage of the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 (“IIRIRA”). Chicanos Por La Causa, Inc. v.
Napolitano, 558 F.3d 856, 861 (9th Cir. 2009). In enacting IIRIRA, Congress
“directed the Attorney General to establish three pilot programs to ensure
efficient and accurate verification of any new employee’s eligibility for
employment.” Id.; see IIRIRA, Pub. L. No. 104-208, div. C, § 401(a), 110 Stat. 3009-546, 3009-655 (1996).2 Of those three, only the Basic Pilot Program remains.3
Unlike the I-9 paper verification process, Basic Pilot is an internet-based
system of employment authorization verification. Chicanos Por La Causa, 558
F.3d at 862. An employer seeking to participate in Basic Pilot must enter a
Memorandum of Understanding with the federal government. E-Verify
Memorandum of Understanding, available at http://www.uscis.gov/files/
nativedocuments/MOU.pdf. Under the program, an employer submits employee
information electronically to the federal government, which then checks the
2 Sections 401 to 405 of IIRIRA, which govern the pilot programs, are not codified in the body of the U.S. Code but appear in a note appended to 8 U.S.C. § 1324a.
3 Basic Pilot is also commonly referred to as E-Verify. Congress recently extended Basic Pilot through September 30, 2012. Department of Homeland Security Appropriations Act, 2010, Pub. L. No. 111-83, title v, § 547, 123 Stat. 2142, 2177. Although the statute initially gave the Attorney General responsibility for Basic Pilot, the Department of Homeland Security now administers it. See Basic Pilot Program Extension and Expansion Act of 2003, Pub. L. No. 108-156, §§ 3-4, 117 Stat. 1944, 1944-45.
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information against a database containing citizenship and work authorization information. If the information submitted by the employer matches the Social Security database and the employee is a U.S. citizen, the employer is immediately notified that the employee is eligible to work in the United States. For noncitizens, the submitted information is checked against U.S. Citizenship and Immigration Services (“USCIS”) records.
By contrast, when employee information is inconsistent with either the Social Security or USCIS databases, the employer receives a tentative nonconfirmation. “A tentative nonconfirmation . . . does not mean that the employee is not authorized to work, and employers may not interpret it as such.” Pilot Programs for Employment Eligibility Confirmation, 62 Fed. Reg 48,309, 48,312 (Sep. 15, 1997) [hereinafter Pilot Programs]. Rather, because federal records may be inaccurate, the employee is notified of the tentative nonconfirmation and has eight federal workdays to contest the result.4 Id. While the challenge is being resolved, the employer may not take adverse action against the employee. Id. at 48,310. An employee who does not contest the tentative nonconfirmation or is otherwise found ineligible to work must be terminated from employment lest the employer be presumed to have employed an unauthorized alien. Id. at 48,313.
4 An executive branch report to Congress in the record indicates that employees have ten federal workdays to contest a tentative nonconfirmation.
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Basic Pilot is a voluntary alternative to the I-9 systemfor most employers. Expansion of the Basic Pilot Program to All 50 States and the District of Columbia; Providing Web-Based Access, 69 Fed. Reg. 75,997, 75,998 (Dec. 20, 2004). IIRIRA explains that “any person or other entity that conducts any hiring . . . may elect to participate in that pilot program. Except as specifically provided in subsection (e), the Attorney General may not require any person or other entity to participate in a pilot program.” IIRIRA § 402(a)5; see also § 402(d)(2) (“The Attorney General shall widely publicize the election process and pilot programs, including the voluntary nature of the pilot programs . . . .”).
The record indicates that Basic Pilot is far from perfect. A 2007 report to the Department of Homeland Security (“DHS”) found that “the database used for verification is still not sufficiently up to date to meet the IIRIRA requirement for accurate verification.” Westat, Findings of the Web Basic Pilot Evaluation xxi (2007). That report documented an error rate of approximately 10% for naturalized citizens, and calculated that foreign-born individuals who are eligible to work in the United States were 30 times as likely to receive an erroneous tentative nonconfirmation as U.S.-born employees. Id. at xxv. It concluded further that “improvements are needed, especially if the Web Basic Pilot becomes
5 Subsection 402(e) lists particular federal government entities required to utilize Basic Pilot, and authorizes the Secretary of Homeland Security to order certain violators of the Immigration and Nationality Act to use the program. § 402(e).
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a mandated national program,” id. at xxi, but that correcting the problems “will take considerable time and will require better data collection and data sharing between [Social Security], USCIS, and the U.S. Department of State than is currently the case,” id. at xxvi.
Through several extensions of Basic Pilot, Congress has opted to retain the program’s voluntary character. E.g., Omnibus Appropriations Act of 2009, div. J, § 101; Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009, Pub. L. No. 110-329, § 143, 122 Stat. 3574, 3580 (2008); Basic Pilot Extension Act of 2001, Pub. L. No. 107-128, § 2, 115 Stat. 2407, 2407 (2002).
B With this federal law in mind, we turn to the Oklahoma Taxpayer and Citizen Protection Act of 2007. The Act reflects Oklahoma’s judgment that “illegal immigration is causing economic hardship and lawlessness in this state.” Oklahoma Taxpayer and Citizen Protection Act of 2007, 2007 Okla. Sess. Law. Serv., Ch. 112, § 2 (West). The Act states that unauthorized aliens have been “harbored and sheltered” in Oklahoma and issued “identification cards . . . without verifying immigration status.” Id. These actions “impede and obstruct the enforcement of federal immigration law, undermine the security of our borders, and impermissibly restrict the privileges and immunities of the citizens of Oklahoma.” Id. “Discourag[ing] illegal immigration” and preventing employment of illegal aliens are avowed purposes of the three provisions at issue
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in this case. Id.
Section 7(B) of the Act, Okla. Stat. tit. 25, § 1313(B)(2), provides that no
contractor or subcontractor may contract or subcontract with a public employer unless it utilizes the Status Verification System (“SVS”)6 to verify work
eligibility for all new employees. Because it is undisputed that three of the four
methods of participating in the SVS either do not exist, § 1312(1)(b), (c), or
would require misuse of a federal program, § 1312(1)(d), the Act effectively
mandates Basic Pilot, § 1312(1)(a). Thus, under Section 7(B), a contractor or
6 Section 6 of the Act defines Status Verification System as:
a. the electronic verification of work authorization program of the Illegal Immigration Reform and Immigration Responsibility Act of 1996, P.L. 104-208, Division C, Section 403(a); 8 U.S.C., Section 1324a, and operated by the United States Department of Homeland Security, known as the Basic Pilot Program,
b. any equivalent federal program designated by the United States Department of Homeland Security or any other federal agency authorized to verify the work eligibility status of newly hired employees, pursuant to the Immigration Reform and Control Act of 1986 (IRCA), D.L. 99-603,
c. any other independent, third-party system with an equal or higher degree of reliability as the programs, systems, or processes described in this paragraph, or
d. the Social Security Number Verification Service, or such similar online verification process implemented by the United States Social Security Administration[.]
§ 1312(1)(a)-(d). -13-

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subcontractor who verifies through the I-9 system cannot obtain certain state
contracts.7
Section 7(C) of the Act makes it a “discriminatory practice” for any
employer to “discharge an employee working in Oklahoma who is a United States
citizen or permanent resident alien while retaining an employee who the
employing entity knows, or reasonably should have known, is an unauthorized
alien.” § 1313(C)(1).8 An employer who engages in such a discriminatory
7 In full, Section 7(B) provides:
1. After July 1, 2008, no public employer shall enter into a contract for the physical performance of services within this state unless the contractor registers and participates in the Status Verification System to verify the work eligibility status of all new employees.
2. After July 1, 2008, no contractor or subcontractor who enters into a contract with a public employer shall enter into such a contract or subcontract in connection with the physical performance of services within this state unless the contractor or subcontractor registers and participates in the Status Verification System to verify information of all new employees.
3. The provisions of this subsection shall not apply to any contracts entered into prior to the effective date of this section even though such contracts may involve the physical performance of services within this state after July 1, 2008.
§ 1313(B) (footnote omitted). 8 In full, Section 7(C) states:
1. It shall be a discriminatory practice for an employing entity to discharge an employee working in Oklahoma who is a United States citizen or permanent resident alien while retaining an employee who the employing (continued...)
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practice is subject to investigation by the Oklahoma Human Rights Commission
(“HRC”), § 1502; temporary injunctive relief issued by an Oklahoma court at the
request of the HRC, § 1502.1; cease-and-desist orders, § 1505(B); and affirmative
relief, including reinstatement, back pay, costs and attorneys’ fees, § 1505(C).
An employer that uses Basic Pilot, however, is “exempt from liability,
investigation, or suit” under Section 7(C)’s safe harbor. § 1313(C)(2).
Section 9 of the Act, unlike federal verification law, requires all businesses
to obtain “documentation to verify . . . independent contractor[s’] employment
authorization.” Okla. Stat. tit. 68, § 2385.32.9 If an independent contractor does
8(...continued) entity knows, or reasonably should have known, is an unauthorized alien hired after July 1, 2008, and who is working in Oklahoma in a job category that requires equal skill, effort, and responsibility, and which is performed under similar working conditions, as defined by 29 U.S.C., Section 206(d)(1), as the job category held by the discharged employee.
2. An employing entity which, on the date of the discharge in question, was currently enrolled in and used a Status Verification Systemto verify the employment eligibility of its employees in Oklahoma hired after July 1, 2008, shall be exempt from liability, investigation, or suit arising from any action under this section.
3. No cause of action for a violation of this subsection shall arise anywhere in Oklahoma law but from the provisions of this subsection.
§ 1313(C). 9 In its entirety, Section 9 provides:
A. If an individual independent contractor, contracting for the physical performance of services in this state, fails to provide to the (continued...) -15-

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not provide proof that she is eligible to work, the contracting entity must withhold
compensation in an amount equal to “the top marginal income tax rate” allowed
under Oklahoma law. § 2385.32(A). This is an exception to the general rule in
Oklahoma, under which contracting entities are not required to withhold taxes
from independent contractors. § 1701.1(A), (C). Contracting entities that fail to
comply with this withholding requirement are liable to the state for any
withholding shortfall. § 2385.32(B).
9(...continued) contracting entity documentation to verify the independent contractor’s employment authorization, pursuant to the prohibition against the use of unauthorized alien labor through contract set forth in 8 U.S.C., Section 1324a(a)(4), the contracting entity shall be required to withhold state income tax at the top marginal income tax rate as provided in Section 2355 of Title 68 of the Oklahoma Statutes as applied to compensation paid to such individual for the performance of such services within this state which exceeds the minimum amount of compensation the contracting entity is required to report as income on United States Internal Revenue Service Form 1099.
B. Any contracting entity who fails to comply with the withholding requirements of this subsection shall be liable for the taxes required to have been withheld unless such contracting entity is exempt from federal withholding with respect to such individual pursuant to a properly filed Internal Revenue Service Form 8233 or its equivalent.
C. Nothing in this section is intended to create, or should be construed as creating, an employer-employee relationship between a contracting entity and an individual independent contractor.
§ 2385.32.
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C Plaintiffs are various national, state, and local chambers of commerce and trade associations that represent businesses in Oklahoma. The Chambers filed a complaint in U.S. District Court for the Western District of Oklahoma alleging that Sections 7(B), 7(C), and 9 of the Oklahoma Act were expressly and impliedly preempted by federal law and thus unconstitutional under the Supremacy Clause. See U.S. Const. art. VI, cl. 2; 8 U.S.C. § 1324a(h)(2). They sought both declaratory and injunctive relief from defendants, Oklahoma Governor Brad Henry, Oklahoma Attorney General W.A. Drew Edmondson, the members of the Oklahoma HRC, and the members of the Oklahoma Tax Commission, all sued in their official capacities.10 The Chambers immediately moved for a preliminary injunction, and defendants moved to dismiss.11 Denying all motions to dismiss, the district court issued a preliminary injunction prohibiting enforcement of the Act. It rejected defendants’ standing, sovereign immunity, and Tax Injunction Act arguments. With respect to the merits, the court concluded that the Chambers were substantially likely to succeed on their express preemption claim as to all three
10 We use “HRC” and “Tax Commission” as shorthand, recognizing that the lawsuit is against the members of those commissions in their official capacities.
11 As outlined in the complaint, the Chambers requested that the Governor and Attorney General be enjoined from enforcing Sections 7(B), 7(C), and 9; that the HRC be enjoined from enforcing Section 7(C); and that the Tax Commission be enjoined from enforcing Section 9.
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challenged sections of the Act because those sections imposed civil sanctions in contravention of 8 U.S.C. § 1324a(h)(2).12 The court further determined that the
remaining preliminary injunction factors were satisfied. All defendants, except
Governor Henry, filed this timely interlocutory appeal.
II
We begin, as we must, by considering jurisdictional issues, turning first to
the Chambers’ standing to challenge Sections 7(B), 7(C), and 9 of the Oklahoma Act.13 Article III of the Constitution limits the jurisdiction of federal courts to
actual cases or controversies. Summers v. Earth Island Inst., 129 S. Ct. 1142,
1148 (2009); Dias v. City and County of Denver, 567 F.3d 1169, 1176 (10th Cir.
2009). To establish standing, plaintiffs bear the burden of demonstrating that
they have suffered an injury-in-fact which is concrete and particularized as well
as actual or imminent; that the injury was caused by the challenged sections; and
12 Because it concluded that Sections 7(B), 7(C), and 9 were likely expressly preempted, the district court did not consider the Chambers’ alternative arguments that these sections were either field or conflict preempted.
13 In addition to questioning this court’s jurisdiction, the Tax Commission argues that the Chambers “bring their suit as a civil rights suit under 42 U.S.C. § 1983,” which we are told does not permit a preemption claim. Although the Chambers did invoke § 1983 in their complaint, they also expressly and repeatedly indicated that their claims arose under the Supremacy Clause. We have held that “[a] party may bring a claim under the Supremacy Clause that a local enactment is preempted even if the federal law at issue does not create a private right of action.” Qwest Corp. v. City of Santa Fe, 380 F.3d 1258, 1266 (10th Cir. 2004). Because the Chambers have a valid right of action under the Supremacy Clause, we need not address the Tax Commission’s § 1983 argument.
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that the requested relief would likely redress their alleged injuries. Summers, 129 S. Ct. at 1149; Dias, 567 F.3d at 1176. Because the Chambers claim a future injury and seek relief in the form of a prospective injunction, they must show that the “threatened injury is real, immediate, and direct.” Davis v. FEC, 128 S. Ct. 2759, 2769 (2008) (citation omitted); see also Dias, 567 F.3d at 1176-77. We review questions of standing de novo. Stewart v. Kempthorne, 554 F.3d 1245, 1254 (10th Cir. 2009).
In the case at bar, plaintiffs allege associational standing to raise claims of their members. See Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 342 (1977). An association has such standing only if: “(a) its m embers would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Id. at 343. Defendants challenge only the first prong of the Chambers’ associational standing, and the record reveals the latter two prongs have been met.
A As to the Section 7(B) claim, Oklahoma contends that the Chambers’ members lack an injury-in-fact and that they have not demonstrated redressability. We disagree on both counts. Both compliance and non-compliance with Section 7(B) injure the
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Chambers’ members. As noted above, Section 7(B) effectively forces employers to use Basic Pilot. See Part I.B., supra. Adopting Basic Pilot imposes significant economic injuries in the form of implementation and training expenses, which the Chambers allege may total well more than a thousand dollars per business per year. By the same token, the Chambers’ membership would also be harmed by non-compliance. Their membership includes companies that currently have contracts with public employers in Oklahoma and hope to enter into such contracts in the future but will be ineligible under the terms of Section 7(B) unless they adopt Basic Pilot. Debarment from public contracts and the attendant economic losses are themselves harmful to the Chambers’ members.14 These are “real, immediate, and direct” threats of injury. See Davis, 128 S. Ct. at 2769.
Redressability presents a more difficult question. Although plaintiffs seek an injunction against the Attorney General,15 Oklahoma responds that the “Attorney General has no power to enforce Section 7(B).” (Attorney General’s Supp. Br. 2); see also Bronson v. Swensen, 500 F.3d 1099, 1111 (10th Cir. 2007)
14 We find no merit to Oklahoma’s argument that the Chambers lack standing because they are not required to do business with the State. Even if businesses are not required to contract with the State, Oklahoma may not impose unconstitutional limitations on businesses that choose to do so.
15 Oklahoma’s governor was also preliminarily enjoined from enforcing Section 7(B), but he has not appealed. Thus, we need not consider whether the injunction would redress the Chambers’ injury as to the Governor. No matter the result of this interlocutory appeal, the injunction will operate against the Governor pending further proceedings in the district court.
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(“The redressability prong is not met when a plaintiff seeks relief against a defendant with no power to enforce a challenged statute.”).
In deciding this issue, we are mindful that the Chambers need not show “that a favorable decision will relieve [their] every injury.” Larson v. Valente, 456 U.S. 228, 243 n.15 (1982). Rather, they need only show “an injury . . . that is likely to be redressed by a favorable decision.” Id. (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 38 (1976)). In Larson, for example, the Court concluded that the plaintiff could challenge the constitutionality of a state statute applicable to religious organizations even though it was unclear whether the plaintiff qualified as a religious organization. Id. at 241-44. Whether an injunction would benefit the plaintiff was unclear, yet the Court concluded that the plaintiff’s injury was likely redressable. Id. at 242-43. Similarly, in Massachusetts v. EPA, 549 U.S. 497 (2007), the Court held that Massachusetts had standing to contest EPA’s refusal to regulate greenhouse gas emissions from new motor vehicles. Id. at 526. Although a continued rise in sea levels on the shores of Massachusetts was contingent upon a number of variables beyond the control of EPA, the state’s injury was nonetheless deemed redressable because the risk of harm “would be reduced to some extent if petitioners received the relief they seek.” Id. at 526 (emphasis added); see also id. at 525 (“While it may be true that regulating motor-vehicle emissions will not by itself reverse global warming, it by no means follows that we lack jurisdiction to decide whether EPA
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has a duty to take steps to slow or reduce it.” (citing Larson, 456 U.S. at 244 n.15)).
We conclude that the harms alleged by the Chambers will likely be “reduced to some extent” by an injunction running against the Attorney General.16 See id. at 526; Larson, 456 U.S. at 244 n.15. As the Attorney General concedes, he drafts contracts for state officials upon request. See Okla. Stat. tit. 74, § 18b(A)(7). An injunction would prevent him from inserting into such contracts a provision requiring use of Basic Pilot, or from refusing to prepare a contract because it violates the terms of Section 7(B). Further, pursuant to his authority to “initiate or appear in any action in which the interests of the state or the people of the state are at issue,” § 18b(A)(3), the Attorney General brings civil actions against businesses that violate state law and defends state agencies sued by their contractors, see, e.g., Colclazier v. State ex rel. Okla. Indigent Defense Sys. Bd., 951 P.2d 622, 624 (Okla. 1997) (Attorney General representing state agency in a suit seeking to compel agency to award a contract); State ex rel. Edmondson v. Cemetery Co., 122 P.3d 480, 481-82 (Okla. Civ. App. 2005) (Attorney General
16 That some public employers outside the scope of the injunction might refuse to enter into contracts with businesses employing only I-9 verification does not divest plaintiffs of standing. An opposite holding would contravene Supreme Court precedent so as to require complete redressability. In any event, “we may assume it is substantially likely that [other] officials would abide by an authoritative interpretation of the . . . provision . . . even though they would not be directly bound by such a determination.” Utah v. Evans, 536 U.S. 452, 460 (2002) (quotation omitted).
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seeking declaration that state statutes applied to particular company). An injunction would prevent him from filing lawsuits or defending against suits on the basis of Section 7(B). These statutory duties are more than sufficient to establish redressability at this stage of the case. SeeLujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (explaining that the burden to demonstrate standing varies at different stages of litigation). “[A]favorable decision will relieve a discrete injury to” the Chambers. Larson, 456 U.S. at 243 n.15; see also Massachusetts, 549 U.S. at 526. Accordingly, the Chambers have sufficiently demonstrated standing to seek a preliminary injunction as to Section 7(B).
B We reach the same conclusion regarding the Chambers’ Section 7(C) claim. That section prohibits employers from firing an authorized worker while retaining an employee the employer knows or reasonably should know is unauthorized, Okla. Stat. tit. 25, § 1313(C)(1), but exempts employers from liability if they use Basic Pilot, § 1313(C)(2). Oklahoma argues that the Chambers lack standing to contest Section 7(C) because they have not sufficiently alleged injury-in-fact. Again, we do not agree. To obtain the benefit of the Section 7(C) safe harbor, an employer must use Basic Pilot. As we explained, see Part II.A, supra, Basic Pilot imposes substantial costs that constitute injury-in-fact. Alternatively, an employer who opts not to take advantage of the state safe harbor and instead embraces the
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federal safe harbor for I-9 users also suffers a cognizable injury. Such an employer is potentially exposed to Section 7(C) penalties including financial levies and injunctive action whenever it terminates an authorized employee. For instance, Section 7(C) exposure would be substantial for highway construction companies whose workforce fluctuates greatly throughout the year with every termination potentially leading to a lawsuit. (Webb Decl. 4, ¶ 18). It is hardly controversial that exposure to liability constitutes injury-in-fact. See MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 128-29 (2007); Protocols, LLC v. Leavitt, 549 F.3d 1294, 1299-1301 (10th Cir. 2008).
Oklahoma responds that in order to have standing to contest Section 7(C), an employer “would have to ‘knowingly’ hire illegal workers and then terminate the employment of a legal Oklahoma worker.”17 (Attorney General’s Br. 32). Both the Supreme Court and this court have steadfastly rejected such an onerous requirement. “[W]here threatened action by government is concerned, we do not require a plaintiff to expose himself to liability before bringing suit to challenge the basis for the threat—for example, the constitutionality of a law threatened to be enforced.” MedImmune, Inc., 549 U.S. at 128-29 (emphasis omitted). The Chambers’ complaint and declarations demonstrate injury-in-fact to their
17 Oklahoma misstates the scienter requirement of Section 7(C). Employers are liable if they “know[], or reasonably should have known,” that they retained an unauthorized alien while terminating an authorized worker. Okla. Stat. tit. 25, § 1313(C)(1) (emphasis added).
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members, leading us to conclude they have standing to obtain a preliminary injunction as to Section 7(C).
C Lastly, we dispose of Oklahoma’s argument that the Chambers lack standing to challenge Section 9 because they have failed to allege injury-in-fact. To comply with that section, a contracting entity must either verify the work eligibility of its individual independent contractors18 or withhold from the independent contractors an amount equal to the top marginal income tax rate. Okla. Stat. tit. 68, § 2385.32(A). Because federal verification requirements are limited to employees (and do not extend to independent contractors), see 8 U.S.C. § 1324a(a)(1)(A); 8 C.F.R. § 274a.1(f), (g), businesses that opt for the verification approach are potentially exposed to liability under federal law for having engaged in “an unfair immigration-related employment practice,” see 8 U.S.C. § 1324b(a)(6), (b). To avoid that possibility, the Chambers have alleged that their members will either withhold money from individual independent contractors pursuant to Section 9(A) of the Oklahoma Act or incur penalties under Section 9(B). Okla. Stat. tit. 68, § 2385.32(A), (B). If a contracting entity chooses the former course, it must offset the withholding requirement by paying
18 Specifically, the statutory language requires the employer to receive “documentation to verify the independent contractor’s employment authorization.” Okla. Stat. tit. 68, § 2385.32(A). For the sake of brevity, we refer to this obligation as verification.
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more money to its independent contractors. If it chooses the latter, it must pay a substantial fine. Either alternative results in an economic injury-in-fact.19
III Having concluded that the Chambers possess standing to mount their challenge, we turn to the second alleged jurisdictional defect. According to the defendants, the Attorney General is immune from suit under the Eleventh Amendment as to all three challenged sections of the Oklahoma Act.20 The Chambers advance counter-arguments to the Attorney General’s claim of immunity only as to Sections 7(B) and 7(C), but not as to Section 9. Plaintiffs have therefore waived any response to the contention that the Attorney General is immune from suit with respect to Section 9. We review de novo the denial of a motion to dismiss based on Eleventh Amendment immunity. Chaffin v. Kansas State Fair Bd., 348 F.3d 850, 865 (10th Cir. 2003). Under the Eleventh Amendment, states are generally immune from suits brought in federal court by their own citizens, by citizens of other states, by foreign sovereigns, and by Indian tribes. See U.S. Const. amend. XI; Prairie
19 Oklahoma also asserts that the Chambers lack standing to challenge Section 9 as against either the Attorney General or the HRC, but we read the complaint as naming only the Governor and Tax Commission as defendants in the challenge to Section 9. See supra note 11.
20 HRC has conceded that its members are not immune with respect to Section 7(C), (Attorney General’s Br. 14, 20), as has the Tax Commission with respect to Section 9, (Tax Commission’s Br. 4). See supra note 11.
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Band Potawatomi Nation v. Wagnon, 476 F.3d 818, 827 (10th Cir. 2007). However, the Eleventh Amendment does not apply to suits against a state officer in his official capacity seeking only prospective relief. Edelman v. Jordan, 415 U.S. 651, 667-68 (1974); Ex parte Young, 209 U.S. 123, 159-60 (1908). This exception applies so long as the defendant officer has “some connection with the enforcement of the act, or else it is merely making him a party as a representative of the state, and thereby attempting to make the state a party.” Ex parte Young, 209 U.S. at 157. An officer need not have a “special connection” to the allegedly unconstitutional statute; rather, he need only “have a particular duty to ‘enforce’ the statute in question and a demonstrated willingness to exercise that duty.” Wagnon, 476 F.3d at 828 (citing Ex parte Young, 209 U.S. at 157); see also Finstuen v. Crutcher, 496 F.3d 1139, 1151 (10th Cir. 2007) (“So long as there is [some] connection [with enforcement of the act], it is not necessary that the officer’s enforcement duties be noted in the act.” (quotation omitted)). Because the defendants are sued in their official capacities and the Chambers seek only prospective relief, Oklahoma disputes solely the connection between the Attorney General and enforcement of the challenged sections.
For the same reasons we concluded that the claimed Section 7(B) injury is redressable, Part II.A, supra, we conclude that the Attorney General has a particular duty to enforce that section, see Okla. Stat. tit. 74, § 18b(A)(3), (7), and a demonstrated willingness to exercise that duty, see, e.g., Colclazier, 951 P.2d at
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624; Cemetery Co., 122 P.3d at 481-82. He is therefore a proper defendant for the Chambers’ Section 7(B) claim. See Wagnon, 476 F.3d at 828.
We reach the opposite conclusion with regard to Section 7(C) because the Chambers do not cite to any Oklahoma law authorizing the Attorney General to enforce that provision. A violation of Section 7(C) constitutes a “discriminatory practice” under Oklahoma’s Anti-Discrimination Act. Okla. Stat. tit. 25, § 1313(C)(1). But the sole provision of the Oklahoma Anti-Discrimination Act the Chambers cite requires only that the attorney general sue on behalf of a victim of discrimination in a housing context. § 1502.15(A); see also Collier v. Insignia Fin. Group, 981 P.2d 321, 325 (Okla. 1999). Because the Chambers have not shown us that the Attorney General has a particular duty to enforce Section 7(C), see Wagnon, 476 F.3d at 828, the Chambers’ claim under that provision falls outside the scope of the Ex parte Young exception. The Attorney General is thus entitled to immunity as to that challenge. See Shell Oil Co. v. Noel, 608 F.2d 208, 211 (1st Cir. 1979) (merely because “an attorney general has a duty to prosecute all actions in which the state is interested [is not]enough to make him a proper defendant in every such action” (citation omitted)).
IV Oklahoma raises yet another jurisdictional challenge: It claims that the Tax Injunction Act (the “TIA”), 28 U.S.C. § 1341, deprived the district court of jurisdiction to enjoin Section 9. Because the TIA implicates the subject matter
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jurisdiction of federal courts, we consider its applicability de novo. SeeMarcus v. Kan. Dept. of Revenue, 170 F.3d 1305, 1308-09 (10th Cir. 1999). Oklahoma argues that Section 9 imposes a revenue-producing tax, which federal courts are without jurisdiction to enjoin. We conclude that Section 9 imposes a penalty, not a tax, because its purpose is to regulate conduct rather than to raise revenue. Accordingly, we reject Oklahoma’s TIA contention.
A In its entirety, the TIA provides: “The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” § 1341. There is no dispute that a sufficient remedy exists in Oklahoma state court. Accordingly, we need only decide if the assessment imposed by Section 9 is a tax within the meaning of § 1341. Marcus, 170 F.3d at 1312 n.4. The answer to that question is a matter of federal law; whether the state labels the assessment a tax is not dispositive. Id. at 1311. The purpose of the TIA is straightforward: It serves to protect the “federal balance” by permitting states to “define and elaborate their own laws through their own courts and administrative processes . . . without undue interference from the Federal Judiciary.” Arkansas v. Farm Credit Servs. Of Cent. Ark., 520 U.S. 821, 826 (1997). To that end, the TIA erects a broad barrier to the jurisdiction of federal courts. Id. at 825. “[C]ourts must guard against
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interpretations of the Tax Injunction Act which might defeat its purpose and text.” Id. at 827. Nevertheless, the Supreme Court has recently cautioned that the TIA is not a “sweeping congressional direction to prevent federal-court interference with all aspects of state tax administration.” Hibbs v. Winn, 542 U.S. 88, 105 (2004) (quotation omitted).
It can generally be said that an assessment is a tax when its purpose is to raise revenue, “while levies assessed for regulatory or punitive purposes, even though they may also raise revenues, are generally not ‘taxes.’” Travelers Ins. Co. v. Cuomo, 14 F.3d 708, 713 (2d Cir. 1994) (quotation omitted), rev’d on other grounds, N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995). In deciding whether Section 9 imposes a tax, the touchstone of our inquiry is the purpose of the assessment. See Hill v. Kemp, 478 F.3d 1236, 1244-45 (10th Cir. 2007). In judging purpose, we consider, among other things, the ultimate use of the funds. Id. at 1245; Marcus, 170 F.3d at 1311 (citing Collins Holding Corp. v. Jasper County, 123 F.3d 797, 800 (4th Cir. 1997); Hager v. City of W. Peoria, 84 F.3d 865, 870-71 (7th Cir. 1996); San Juan Cellular Tel. Co. v. Pub. Serv. Comm’n of P.R., 967 F.2d 683, 685 (1st Cir. 1992)). Yet, other evidence of purpose, such as the statute’s avowed purpose as stated in its text as well as the incentive structure created by a levy, are also relevant. RTC Commercial Assets Trust 1995-NP3-1 v. Phoenix Bond & Indem. Co., 169 F.3d 448, 457 (7th Cir. 1999); Hager, 84 F.3d at 870-71.
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Two of our principal cases in this area have looked to the ultimate use of funds generated by a levy as evidence of its purpose. Hill, 478 F.3d at 1244-46; Marcus, 170 F.3d at 1311-12. In Marcus, Kansas charged drivers $5.25 to obtain a disabled parking placard. Id. at 1307. A portion of that fee was deposited in a dedicated fund to be used for the administration of the program at issue. Id. If that fund contained a positive balance at the end of the year, the balance would be transferred to the general fund. Id. Although it was unclear exactly how the other portion of the assessment was used, the statute mandated that the charge imposed for parking placards “shall not exceed the actual cost of issuance.” Kan. Stat. Ann. § 8-1,125(c). Thus, the entire charge was “expressly linked to defraying administrative costs.” Marcus, 170 F.3d at 1312. Because it was expressly tied to the administrative costs of a specific regulatory scheme, we determined that “the dominant purpose of these funds [was not] revenue raising.” Id. Rather, the assessment’s purpose was regulatory. Id. It therefore constituted a regulatory fee rather than a tax and fell outside the scope of the TIA. Id.
In Hill, we employed a similar analysis in reaching the opposite conclusion. 478 F.3d at 1244-46. At issue in that case were charges imposed by Oklahoma for specialty license plates bearing messages such as “Adoption Creates Families” and “Choose Life.” Id. at 1239. We emphasized the ultimate use of the funds in determining that the “primary purpose of the special license plate scheme is revenue[-raising] rather than regulation and thus . . . it qualifies as a tax.” Id.at
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1244-45. In particular, only $8.00 of a $35.00 charge was earmarked for administrative costs while the balance of the revenue was spread among a variety of programs, including those supporting the causes espoused by the license plates. Id. at 1245. Because the entire public benefitted fromthe variety of state initiatives funded by the license plate scheme, we held that the assessments were taxes under the TIA. Id.
But use is not always conclusive evidence of purpose. Just as “[t]he label given by a state for an assessment or charge is not dispositive” of its character, Marcus, 170 F.3d at 1311, neither is the ultimate use of funds dispositive of an assessment’s purpose, Hager, 84 F.3d at 870-71. As our sibling circuit has explained, regardless of the ultimate use of funds, a non-tax assessment “may [also] serve regulatory purposes directly by . . . deliberately discouraging particular conduct by making it more expensive.” San Juan, 967 F.2d at 685 (citing South Carolina ex rel. Tindal v. Block, 717 F.2d 874, 887 (4th Cir. 1983)). Our decisions recognize as much. The license plate charges at issue in Hill, for example, did not “purport to ‘regulate’ anyone by incentivizing or disincentivizing certain forms of conduct.” 478 F.3d at 1246; see alsoMarcus, 170 F.3d at 1311 (citing Hager, 84 F.3d at 870-71). Thus, “[r]ather than a question solely of where the money goes, the issue is why the money is taken.” Hager, 84 F.3d at 870-71. In Marcus and Hill, where the money went was strong evidence of why the money was taken. Hill, 478 F.3d at 1244-46; Marcus, 170
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F.3d at 1311-12. In other cases, however, a statute’s incentive structure and avowed purpose more clearly elucidate its goal.
In RTC Commercial, for example, the court examined whether interest and penalties associated with nonpayment of taxes constituted taxes for purposes of the TIA. 169 F.3d at 457. Our sibling circuit concluded that the penalties were not taxes because they were assessed “so that delinquent tax debtors will be deterred the next time around from ignoring their legal obligations.” Id. The incentive structure created by the penalties revealed their regulatory character: Penalties are designed to incentivize compliance with law, not to raise revenue. Id. Conversely, interest was logically a part of the tax itself because it was meant solely to account for the government’s opportunity cost resulting from the delay in receiving the funds. Id.
Similarly, in Hager, the Seventh Circuit addressed an assessment that was earmarked for a general city fund, a fact superficially suggesting that the levy’s ultimate purpose was to raise revenue. 84 F.3d at 870. But the court looked beyond the use of the funds, concluding instead that the fee was, as the ordinances at issue avowedly proclaimed, designed to regulate the weight of trucks using city streets. Id. at 871. The court’s analysis turned on the stated purpose of the assessment as articulated in the text of the ordinance, admissions by the city’s mayor about implementation, and the operation of the levy in the context of the state’s motor vehicle laws. Id. Although the revenue raised ended
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up in a general fund, the Seventh Circuit concluded that the assessment was a fee rather than a tax. Id. at 870-72. “That the ordinances generate a permit fee which goes to the general city fund is only incidental to its regulatory nature.” Id.at 871.
B Applying these principles, we conclude that Section 9 of the Oklahoma Act constitutes a regulatory penalty, not a tax, because its purpose is to regulate behavior rather than to raise revenue. See Hill, 478 F.3d at 1244-46; Marcus, 170 F.3d at 1311-12; RTC Commercial, 169 F.3d 457-58; Hager, 84 F.3d at 870-72; San Juan, 967 F.2d at 685-86. By its plain terms, Section 9 was enacted “pursuant to the prohibition against the use of unauthorized alien labor.” Okla. Stat. tit. 68, § 2385.32(A). Section 9 creates an incentive structure that, on pain of financial assessment, encourages employers to verify the employment authorization of their independent contractors. It imposes a penalty on contracting entities that do not verify eligibility or withhold taxes from their independent contractors, § 2385.32(B), thereby “deliberately discouraging particular conduct by making it more expensive,” San Juan, 967 F.2d at 685; see RTC Commercial, 169 F.3d at 457 (“States do not assess penalties for the purpose of raising revenue . . . .”). As in RTC Commercial, Oklahoma imposes a penalty “so that delinquent [contracting entities] will be deterred the next time around from ignoring their legal obligations.” 169 F.3d at 457.
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Moreover, the expressed primary goal of the Oklahoma Act is to regulate behavior.21 Oklahoma means to “discourage illegal immigration” through verification of work eligibility. Oklahoma Taxpayer and Citizen Protection Act of 2002 § 2. As the Oklahoma Attorney General acknowledged in its motion to dismiss below, the Act aims to “discourag[e] illegal aliens from seeking refuge in this state . . . [by] discouraging employers from hiring illegal aliens.” (Attorney General’s Mot. to Dismiss 24). As with the ordinances at issue in Hager, 84 F.3d at 871, the stated purpose of Section 9 is regulation, not revenue generation. The mere fact that revenue received from a violation of Section 9 ends up in Oklahoma’s general fund is of little significance when measured against the incentive structure created and the avowed statutory purpose. See id. (“That the ordinances generate a permit fee which goes to the general city fund is only incidental to its regulatory nature.”).
In response, the Attorney General retreats to the generalized assertion that “the statute’s ultimate goal is to ensure that taxes are collected, not to regulate the employment of illegal aliens.” (Attorney General’s Br. 23). Notwithstanding that the Attorney General was of a different mind in the court below, (Attorney
21 The partial dissent asserts that we “improperly focus[] on the motive for enactment of” Section 9 because “[t]he TIA is not concerned with why a state chooses to collect its taxes in a particular manner.” (Dissenting Op. 10.) As discussed supra, however, the purpose of an assessment is key to our determination of whether it is a tax or a penalty. See Hill, 478 F.3d at 1244-45.
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General’s Mot. to Dismiss 24), the primary purpose of Section 9 is not to ensure
that taxes are collected. To the contrary, if a contracting entity complies with
Section 9 by verifying the employment authorization of its independent
contractors, Oklahoma does not receive any revenue. Okla. Stat. tit. 68,
§ 2385.32(A).22 Only if a contracting entity violates Section 9 does the state
receive revenue. It strains credulity to argue that the primary purpose of a law is
to raise revenue when compliance with the law produces no revenue at all. See
RTC Commercial, 169 F.3d at 457 (“In a Utopian world where all citizens
complied fully with their obligations, no penalties at all would be collected.”). 23
Accordingly, the TIA does not strip the district court of jurisdiction over the
22 The partial dissent argues that Section 9 is “not some special assessment but income tax, pure and simple.” (Dissenting Op. 9-10.) However, the fact that the amount of the penalty is set at the maximum assessable level of income tax and that Oklahoma uses the tax system to collect the revenue does not transform this penalty into a tax. To decide that issue, we must inquire into the statute’s purpose; here, that purpose is to ensure that employers verify the employment authorization status of their employees.
23 Admittedly, a contracting entity may also comply with Section 9 by withholding an amount equal to “the top marginal income tax rate” allowed under Oklahoma law. Okla. Stat. tit. 68, § 2385.32(A). But Section 9 and the Oklahoma Act as a whole incentivize employment authorization verification above all else. See, e.g., Okla. Stat. tit. 25, § 1312(1)(a)-(d) (defining Status Verification System); § 1313(B)(2) (prohibiting businesses from contracting with public employers unless the business utilizes SVS); § 1313(C)(2) (providing a safe harbor from discriminatory practice liability for employers who utilize Basic Pilot); Oklahoma Taxpayer and Citizen Protection Act of 2002 § 2 (stating that the purpose of the Act is to “discourage illegal immigration” through verification of immigration status). The primary purpose, therefore, is not to raise revenue because the preferred form of compliance does not generate revenue.
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Section 9 challenge.24 V
Satisfied of our jurisdiction, we turn at last to the main course. In order to obtain a preliminary injunction, the Chambers must show “(1) a likelihood of success on the merits; (2) a likelihood that the movant will suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in the movant’s favor; and (4) that the injunction is in the public interest.” Attorney Gen. of Okla. v. Tyson Foods, Inc., 565 F.3d 769, 776 (10th Cir. 2009) (quotation omitted). We review the district court’s grant of a preliminary injunction for abuse of discretion. Pac. Frontier v. Pleasant Grove City, 414 F.3d 1221, 1230-31 (10th Cir. 2005). “A district court abuses its discretion when it com mits an error of law or makes clearly erroneous factual findings.” Beltronics USA, Inc. v. Midwest Inventory Distrib., LLC, 562 F.3d 1067, 1070 (10th Cir. 2009).
A The Supremacy Clause provides that the laws of the United States “shall be the supreme Law of the Land[,] . . . any Thing in the Constitution or Laws of any
24 The Tax Commission has a slightly different take than the Attorney General. The Commission contends that Section 9 creates a method of tax collection that may not be enjoined under the terms of the TIA. We need not address whether § 1341 deprives federal district courts of jurisdiction to enjoin the method a state chooses to collect a tax, however, because we disagree with the premise of the Commission’s argument. Oklahoma is not collecting a “tax”; it is collecting a penalty designed to regulate conduct.
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State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. Pursuant to this provision, it has long been recognized that federal law preempts contrary state enactments. See M’Culloch v. Maryland, 17 U.S. (4 Wheat.) 316, 405-06 (1819). Preemption can be either express or implied. Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707, 713 (1985). State laws are expressly preempted when they fall within the scope of a federal provision explicitly precluding state action. See id. Alternatively, state laws may be impliedly preempted either as a result of conflict or field preemption. See id. We conclude that plaintiffs have demonstrated a strong likelihood that Section 7(C) is expressly preempted and that Section 9 is conflict preempted. Although my colleagues disagree, I would also hold that Section 7(B) is conflict preempted.
1 In considering express preemption, our inquiry is whether the state law at issue falls within the scope of a federal preemption provision. See Emerson v. Kan. City S. Ry. Co., 503 F.3d 1126, 1129 (10th Cir. 2007). We apply ordinary principles of statutory interpretation, looking initially to the plain language of the federal statute. Sprietsma v. Mercury Marine, 537 U.S. 51, 62-63 (2002). IRCA preempts “any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit
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or refer for a fee for employment, unauthorized aliens.”25 8 U.S.C. § 1324a(h)(2) (emphasis added). Oklahoma contends that Section 7(C) does not impose “sanctions” because it provides compensatory rather than solely punitive relief. We disagree.
IRCA does not define “sanction,” but by its ordinary meaning, a sanction is “a restrictive measure used to punish a specific action or to prevent some future activity.” Webster’s Third New Int’l Dictionary 2009 (1993). Moreover, the statutory context does not evince an intent to narrowly define “sanction” as requiring a punitive component. Title 8, Section 1324a(e)(4)(A) outlines a series of “penalties” for employers hiring unauthorized aliens, ranging from $250 to $10,000. Penalties are ordinarily understood as serving punitive purposes. Yet, in § 1324a(h)(2) Congress used the term “sanctions” rather than “penalty” as it did in § 1324a(e)(4)(A). Had Congress intended to preempt only those state laws that are punitive, we would have expected it to use “penalties” in § 1324a(h)(2). Had it used “sanctions” in § 1324a(e)(4), we might reach a similar conclusion. It did neither.
Section 7(C) subjects employers to cease and desist orders, reinstatement,
25 Until its reply brief, Oklahoma did not argue that the parenthetical savings clause in § 1324a(h)(2) spared the Oklahoma Act from express preemption. Plaintiffs filed a motion to strike that portion of Oklahoma’s reply brief which, for the first time, argues that the portions of the Act were akin to licensing laws. Oklahoma has failed to preserve this argument, Bronson, 500 F.3d at 1104, and plaintiffs’ motion to strike is thus granted.
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back pay, costs, and attorneys’ fees. Okla. Stat. tit. 25, § 1505(B), (C). Such impositions are “restrictive measures” that fall within the meaning of “sanctions” as used in § 1324a(h)(2). This conclusion is consistent with use of the term “sanction” in other provisions of federal law. An attorney, law firm, or party that violates Federal Rule of Civil Procedure 11(b), for example, is subject to “sanctions” including reasonable attorneys’ fees and other expenses, Fed. R. Civ. P. 11(c)(4)—the very type of sanctions imposed by Section 7(C). Similarly, costs and attorneys’ fees are mandatory sanctions for violations of Federal Rule of Civil Procedure 37(d). Fed. R. Civ. P. 37(d)(3).
Additionally, we conclude that Section 7(C) sanctions are imposed “upon those who employ . . . unauthorized aliens,” 8 U.S.C. § 1324a(h)(2). An employer is subject to sanction under Section 7(C) if it terminates a legal worker while retaining a worker the employer knows, or should reasonably know, is an unauthorized alien. Okla. Stat. tit. 25, § 1313(C)(1). Sanctions are therefore contingent on the employment of an unauthorized alien. See id. We are not persuaded by Oklahoma’s contention that Section 7(C) merely creates a cause of action for the termination of legal residents. While that is a necessary prerequisite, an employer is subject to sanction only if the employer retains an unauthorized alien. Id. The Chambers are thus likely to succeed on the merits of this portion of their express preemption claim.
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2 In contrast, neither Section 7(B) nor Section 9 “impos[e] civil or criminal sanctions . . . upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.” Id. (emphasis added). Even assuming that Sections 7(B) and 9 impose “sanctions” as that term is used in § 1324a(h)(2), imposition of such sanctions is divorced from the employment of unauthorized aliens. Section 7(B) forces contractors to use Basic Pilot if they seek to contract with public employers. Okla. Stat. tit. 25, § 1313(B)(2). Thus Section 7(B) is violated not when an unauthorized alien is employed, but when an employer fails to utilize the Basic Pilot Program. Id.; § 1312(1)(a). The actual employment of an unauthorized alien is irrelevant in determining whether an employer has violated Section 7(B). § 1313(B)(2). Similarly, Section 9 applies to contracting entities that do not verify the work authorization status of their individual independent contractors and that fail to withhold from the independent contractor an amount equal to “the top marginal income tax rate” allowed under Oklahoma law. Okla. Stat. tit. 68, § 2385.32(A). Whether an independent contractor is an unauthorized alien is of no significance under this regime. As with Section 7(B), a contracting entity can violate Section 9 even if its independent contractors are fully authorized to work in the United States. Accordingly, neither Section 7(B) nor Section 9 “impos[es] civil or criminal sanctions . . . upon those who employ, or recruit or refer for a fee for
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employment, unauthorized aliens.” 8 U.S.C. § 1324a(h)(2). The Chambers,
therefore, are unlikely to succeed on the merits of their claims that Sections 7(B)
and 9 are expressly preempted by IRCA.
B
In addition to express preemption, the Supremacy Clause prohibits states
from enacting laws that make compliance with both federal and state law a
physical impossibility or that “stand[] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”26 Fid. Fed. Sav. &
Loan Ass’n v. De la Cuesta, 458 U.S. 141, 152-53 (1982) (quotation omitted).
Even when federal and state statutes serve the same ultimate goal, “[t]he fact of a
common end hardly neutralizes conflicting means.” Crosby v. Nat’l Foreign
Trade Council, 530 U.S. 363, 379 (2000); accord Int’l Paper Co. v. Ouellette, 479
U.S. 481, 494 (1987). Although Section 9 does not render compliance with state and federal law a physical impossibility,27 plaintiffs will likely succeed in their
26 Neither the presence of an express preemption provision nor the presence of a savings clause by itself alters the operation of traditional implied preemption principles. Geier v. Am. Honda Motor Co., 529 U.S. 861, 869 (2000).
27 Because federal law authorizes use of the Basic Pilot Program (albeit under certain constraints imposed by DHS), a business employing Basic Pilot under the terms of Section 7(B) would also be in compliance with federal law. Section 9 forces contracting entities to verify the work authorization of their independent contractors. This potentially exposes the business to liability for having engaged in an unfair immigration-related employment practice. See 8 U.S.C. § 1324b(a)(6). The federal prohibition, however, requires a specific intent to discriminate, id., which presumably would be lacking if the contracting entity
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argument that the provision interferes with Congress’ chosen methods and is thus conflict preempted.28 Although my colleagues disagree, I would hold that the plaintiffs have made a similar showing regarding Section 7(B).
1 Congress sought to balance a number of competing goals when it enacted IRCA—a balance it determined was best served by requiring employers to verify the work authorization status of their employees by using the I-9 system. “IRCA is a carefully crafted political compromise which at every level balances specifically chosen measures discouraging illegal employment with measures to protect those who might be adversely affected.” Nat’l Ctr. For Immigrants’ Rights, Inc. v. INS, 913 F.2d 1350, 1366 (9th Cir. 1990), rev’d on other grounds, 502 U.S. 183 (1991). Among these goals were preventing the hiring of unauthorized aliens, lessening the disruption of American business, and minimizing the possibility of employment discrimination. H.R. Rep. No. 99-682(I), at 56 (1986), as reprinted in 1986 U.S.C.C.A.N. 5649, 5660. IRCA forbids the hiring of unauthorized aliens, but to lessen the burden on employers, it limits penalties to those who
27(...continued) verified with the sole purpose of complying with Section 9.
28 Because we conclude that the Chambers are likely to succeed on the merits of their conflict preemption challenge to Section 9, we need not address whether Congress has occupied the field of work authorization verification.
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“knowingly” violate the prohibition. 8 U.S.C. § 1324a(a)(1)(A). The federal statute provides a defense to employers who comply with the I-9 requirements in good faith. § 1324a(a)(3). Employers are not required to verify the work eligibility of independent contractors, which would increase the burdens on business and could lead to increased employment discrimination. 8 C.F.R. § 274a.1(f), (g); see also H.R. Rep. No. 99-682(I), at 57, 68. By making the I-9 system a uniform national requirement, Congress limited the compliance burden on interstate corporations while facilitating uniform enforcement. Finally, by forbidding employers from requesting “more or different documents” than § 1324a requires or “refusing to honor documents tendered that on their face reasonably appear to be genuine,” § 1324b(a)(6), Congress sought to limit employment discrimination, a goal which is also served by a uniformsystem of employment authorization verification, H.R. Rep. No. 99-682(I), at 68. IRCA thus embodies a carefully considered balance of various competing objectives.
Against this backdrop, Congress enacted IIRIRA, directing the Attorney General (later the Secretary of Homeland Security) to establish the Basic Pilot Program as a voluntary supplement to, not a replacement for, the I-9 system. Basic Pilot Program Extension and Expansion Act of 2003 §§ 3-4; IIRIRA § 401(a). Section 402 of IIRIRA stresses the voluntary nature of the program. See IIRIRA § 402(a) (“Voluntary Election.”); id. (“[A]ny person . . . that conducts any hiring . . . in a State in which a pilot programis operating may elect
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to participate . . . .” (emphasis added)); § 402(d)(2) (“The [Secretary of Homeland Security] shall widely publicize the election process and pilot programs, including the voluntary nature of pilot programs . . . .” (emphasis added)); § 402(d)(3), (3)(A) (“The [Secretary of Homeland Security] shall designate one or more individuals . . . to inform persons and other entities that seek information about pilot programs of the voluntary nature of such programs . . . .” (emphasis added)). Further, Congress withheld from the Secretary of Homeland Security authority to require private employers to utilize Basic Pilot. § 402(a) (“Except as specifically provided in subsection (e), the [Secretary of Homeland Security] may not require any person or other entity to participate in a pilot program.”); § 402(e) (listing particular federal government entities required to utilize Basic Pilot and authorizing the Secretary of Homeland Security to order certain violators of the Immigration and Nationality Act to use the program). Although Basic Pilot is now available in all fifty states, Congress continues to decline to make it mandatory. E.g., Omnibus Appropriations Act of 2009 div. J, § 101; Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 § 143; Basic Pilot Extension Act of 2001 § 2.
2 I would hold that Section 7(B) disturbs the balance between these
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conflicting goals deliberately crafted by Congress.29 In enacting IRCA, IIRIRA,
and other immigration reforms along the way, Congress has made calibrated
judgments regarding several competing considerations. Congress has continually
concluded that employment verification should be required, but that the I-9
system strikes the best balance between preventing employment of unauthorized
workers, easing burdens on employers, and preventing employment
discrimination.
Yet, Section 7(B) would make Basic Pilot effectively mandatory for many
employers, on pain of debarment from public contracts. Because Oklahoma has
mandated Basic Pilot despite Congress’ determination that employer participation
should be voluntary, the Chambers can likely succeed in showing that Oklahoma
has undermined Congress’ judgment that voluntary participation best serves the
relevant competing considerations.30 Such interference with Congress’ selected
29 I reject Oklahoma’s request that we apply a presumption against preemption. As the Supreme Court has made clear, “an ‘assumption’ of nonpre-emption is not triggered when the State regulates in an area where there has been a history of significant federal presence.” United States v. Locke, 529 U.S. 89, 108 (2000) (citing Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947)). Federal regulation of immigration is longstanding, as is its regulation of work authorization verification.
30 As of September 8, 2009, Executive Order 12,989 requires federal government contractors to use Basic Pilot to confirm the immigration status of all employees working directly on federal government contracts and all employees hired during the contract terms regardless of whether or not they work on the contracts. The power of the President to mandate the use of Basic Pilot in the face of the congressional directive to the Attorney General preventing him from
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means would violate the Supremacy Clause. Crosby, 530 U.S. at 379. 3
We conclude that Section 9 similarly upsets Congress’ carefully constructed balance by interfering with its chosen methods. That provision would require contracting entities, on pain of burdensome withholding requirements or penalties, to verify the work authorization status of independent contractors. Congress, by contrast, intentionally excluded independent contractors from verification obligations. See 8 U.S.C. § 1324a(a)(1)(A); 8 C.F.R. § 274a.1(f), (g); H.R. Rep. No. 99-682(I), at 57. By requiring verification of independent contractors, Oklahoma risks exposing contracting entities to liability under federal law. See 8 U.S.C. § 1324b(a)(6), (b). Although a business must act with the specific intent to discriminate to be liable under federal law, § 1324b(a)(6), it is likely that a contracting entity will face increased claims of unfair employment practices as a result of the enhanced obligations Section 9 would impose.
30(...continued) doing so is not at issue before us. Regardless, nothing in this executive action allows the judicial branch to ignore congressional language that indicates the program should not be mandatory. It is particularly inappropriate to give determinative weight to this executive action given the statistical disparities in tentative non-confirmation rates between work-eligible foreign-born employees and U.S.-born employees discussed supra.
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4 Oklahoma’s principal argument in opposition to our conflict preemption holding is its assertion that “Oklahoma’s goals in implementing these statutes are consistent with federal goals in reducing illegal immigration.” (Attorney General’s Br. 50). But “[i]n determining whether [state] law ‘stands as an obstacle’ to the full implementation of [federal law], it is not enough to say that the ultimate goal of both federal and state law is [the same].” Int’l Paper Co., 479 U.S. at 494. “A state law also is pre-empted if it interferes with the methods by which the federal statute was designed to reach this goal.” Id. The Supreme Court’s decision in Geier v. American Honda Motor Co., 529 U.S. 861 (2000), is particularly instructive. In that case, plaintiffs sued Honda after Alexis Geier was seriously injured in a car crash. Id. at 865. They claimed that the car Alexis was driving was negligently and defectively designed because it lacked a driver’s side airbag. Id. At the time of the accident, federal safety standards provided car manufacturers with a range of options for passive restraint devices. Id. at 874-75. Geier’s lawsuit, by contrast, would have required auto manufacturers to install an airbag. Id. at 881. Because that outcome would undermine Congress’ decision to permit a variety of devices, the state tort suit was impliedly preempted; it “would have stood as an obstacle to the accomplishment and execution of the important means-related federal objectives.” Id. (quotation omitted); see also De la Cuesta, 458 U.S. at 156 (state law that
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limited the availability of an option considered essential to a federal scheme was conflict preempted).
The situation in Geier strongly parallels the interaction between Section 7(B) and IRCA. Federal law provides employers with a carefully calibrated set of alternatives for verification of work authorization status. Whether to utilize the I9 system or the Basic Pilot Program is a choice that Congress has to date, in its considered judgment, given to employers. State tort law could not require automobile manufacturers to install particular safety precautions when Congress and the relevant federal agency expressly provided manufacturers with choices. Geier, 529 U.S. at 878, 881. Similarly, state legislation may not mandate a particular verification method that Congress has expressly left voluntary. Section 7(B) effectively does just that, requiring employers to utilize Basic Pilot.
Geier’s reasoning implicates Section 9 as well. Whereas Section 7(B) would restrict the range of choices Congress offered employers, Section 9 would create obligations on contracting entities that Congress expressly chose not to impose. See 8 U.S.C. § 1324a(a)(1)(A); 8 C.F.R. § 274a.1(f), (g); H.R. Rep. No. 99-682(I), at 57; cf. Geier, 529 U.S. at 881. Just as state tort law could not require airbag installation when the federal government had balanced competing interests and decided against such a requirement, Geier, 529 U.S. at 877-78, neither can Oklahoma’s statutory law require verification of independent contractors when Congress plainly chose not to do so.
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5 Finally, Oklahoma’s reliance on Chicanos Por La Causa is misplaced. In that case, the Ninth Circuit concluded that an Arizona law requiring employers to use Basic Pilot was not expressly preempted because it fell within 8 U.S.C. § 1324a(h)(2)’s savings clause, 558 F.3d at 866, and that the state law was not impliedly preempted, id. at 866-67. Its implied preemption holding was based in large part on the initial conclusion that the Arizona law fell within the savings clause. Id. at 867. The court stated: Congress could have, but did not, expressly forbid state laws from requiring [Basic Pilot Program] participation. It certainly knew how to do so because, at the same time, it did expressly forbid 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. Id. (quotation omitted). This is problematic because it implies that the presence of an express preemption provision precludes the possibility of implied preemption. But that is emphatically not the case. Geier, 529 U.S. at 869 (“We now conclude that the saving clause (like the express pre-emption provision) does not bar the ordinary working of conflict pre-emption principles.”). On the one hand, because Oklahoma has waived any argument that its Act is a licensing or other similar law, 8 U.S.C. § 1324a(h)(1); supra note 23, the Ninth Circuit’s opinion is distinguishable. On the other, we are unpersuaded by its reasoning.
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C Having concluded that the Chambers have shown a strong likelihood of succeeding on the merits of their preemption challenges to Sections 7(C) and 9, we turn to the remaining preliminary injunction factors. To obtain a preliminary injunction, the Chambers must also demonstrate a likelihood that they will suffer irreparable harm absent preliminary relief, that the balance of equities tips in their favor, and that the injunction is in the public interest. Tyson Foods, Inc. , 565 F.3d at 776. We conclude that the Chambers will likely suffer irreparable harm absent a preliminary injunction. Imposition of monetary damages that cannot later be recovered for reasons such as sovereign immunity constitutes irreparable injury. Kan. Health Care Ass’n, Inc. v. Kan. Dep’t of Social & Rehab. Servs. , 31 F.3d 1536, 1543 (10th Cir. 1994); see also Ohio Oil Co. v. Conway, 279 U.S. 813, 814 (1929) (holding that paying an allegedly unconstitutional tax when state law did not provide a remedy for its return constituted irreparable injury in the event that the statute were ultimately adjudged invalid); Greater Yellowstone Coal. v. Flowers, 321 F.3d 1250, 1258 (10th Cir. 2003) (“An irreparable harm requirement is met if a plaintiff demonstrates a significant risk that he or she will experience harm that cannot be compensated after the fact by monetary damages.” (quotation and emphasis omitted)). If forced to comply with the Oklahoma Act, the Chambers’ members will face a significant risk of suffering financial harm as
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described in Part II. Yet, because Oklahoma and its officers are immune from suit for retrospective relief, Edelman, 415 U.S. at 667-68, these financial injuries cannot be remedied. Should the Chambers’ members decline to comply with the Act, they face investigation and other consequences for having engaged in a discriminatory practice under Section 7(C) and liability under Section 9 for having failed to verify the work authorization of independent contractors. I would further note that they face debarment from public contracts under Section 7(B). These consequences, in and of themselves, demonstrate a likelihood of irreparable harm.
Moreover, the balance of equities tips in the Chambers’ favor, and the public interest is served by an injunction. Oklahoma does not have an interest in enforcing a law that is likely constitutionally infirm. Moreover, “the public interest will perforce be served by enjoining the enforcement of the invalid provisions of state law.” Bank One v. Guttau, 190 F.3d 844, 848 (8th Cir. 1999); see also Utah Licensed Beverage Ass’n v. Leavitt, 256 F.3d 1061, 1076 (10th Cir. 2001) (public interest favors preliminarily enjoining state statutes likely to be held unconstitutional). We are unpersuaded by the argument that the Oklahoma Act vindicates the public interest because it serves a purpose consistent with federal law: deterrence of illegal immigration and the hiring of unauthorized workers. Even assuming federal law singlemindedly pursues this goal, it does not follow that simply because the two serve the same goal, enforcing the state law is
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Appellate Case: 08-6127 Document: 01018360129 Date Filed: 02/02/2010 Page: 53 in the public interest. “The fact of a common end hardly neutralizes conflicting means.” Crosby, 530 U.S. at 379. Ultimately, we conclude that the district court did not abuse its discretion in granting a preliminary injunction. VI For the reasons stated, we DISMISS the Attorney General from the case insofar as he is named as a defendant in the challenges to Sections 7(C) and 9. The district court’s grant of summary judgment against the enforcement of Section 7(B) is REVERSED. In all other respects, the judgment of the district court is AFFIRMED. Plaintiffs’ motion to strike is GRANTED.
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08-6127 & 08-6128, Chamber of Commerce of the United States of America v. W.A. Drew Edmondson. KELLY, Circuit Judge, concurring in part.
I concur in Judge Lucero’s opinion with the exception of parts V(B)(2) and (4) concluding that Section 7(B) is conflict preempted. As noted by Judge Lucero, the panel majority, albeit for different reasons, reverses the district court’s grant of a preliminary injunction against the enforcement of Section 7(B). My reasoning is as follows. Even accepting that federal regulation of immigration and work-authorization verification is now the norm, the federal government’s encouragement of a web-based system to reduce the employment of unauthorized aliens cannot be overlooked—including requiring the system for federal contractors. See 73 Fed. Reg. 67,704 (2008). Though E-verify is voluntary (as of yet) at the national level, it is not reasonable to assum e that a mandatory program choice for state public contractors conflicts with Congressional purpose. In my view, Congress obviously foresaw the potential for increased use of technology. See Chicanos Por La Causa, Inc. v. Napolitano, 558 F.3d 856, 866-67 (9th Cir. 2009). To hold that the State is preem pted from requiring such use in these circumstances reads too much into the federal government’s provision of choice. After all, choice is not an end in itself and no evidence suggests that federal standards concerning immigration and employment-verification will be compromised by E-Verify.

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08-6127, 08-6128 - Chamber of Commerce of the United States of America v. W.A. Drew Edmondson
HARTZ, Circuit Judge, concurring and dissenting: My views with respect to Plaintiffs’ challenges to Sections 7(B), 7(C), and
9 of H. B.1804 are somewhat different from those of the others on this panel. In my view, Plaintiffs lack standing to seek an injunction against the Attorney General with respect to Section 7(B), and their claim with respect to Section 9 is barred by the Tax Injunction Act. I concur with the other m embers of the panel in affirming the injunction against enforcement of Section 7(C), but my grounds are narrower than theirs. I. SECTION 7 (B)
I respectfully dissent from the majority opinion’s holding that the district court had jurisdiction to enjoin the Attorney General from enforcing Okla. Stat. tit. 25, § 1313(B) (Section 7(B) of H.B. 1804). In my view, the Plaintiffs did not have standing to bring their claim against the Attorney General.
As recently stated by the Supreme Court, To seek injunctive relief, a plaintiff must show that he is under threat of suffering “injury in fact” that is concrete and particularized; this threat must be actual and imminent, not conjectural or hypothetical; it must be fairly traceable to the challenged action of the defendant; and it must be likely that a favorable judicial decision will prevent or redress the injury. Summers v. Earth Island Inst., 129 S. Ct. 1142, 1149 (2009). What is missing in this case is that the Plaintiffs have not shown that they face an actual and

Appellate Case: 08-6127 Document: 01018360129 Date Filed: 02/02/2010 Page: 56
imminent threat of injury traceable to actions of the Attorney General with regard
to § 1313(B).
Section 1313(B) states as follows:
1. After July 1, 2008, no public employer shall enter into a contract for the physical performance of services within this state unless the contractor registers and participates in the Status Verification System to verify the work eligibility status of all new employees.
2. After July 1, 2008, no contractor or subcontractor who enters into a contract with a public employer shall enter into such a contract or subcontract in connection with the physical performance of services within this state unless the contractor or subcontractor registers and participates in the Status Verification System to verify information of all new employees.
3. The provisions of this subsection shall not apply to any contracts entered into prior to the effective date of this section even though such contracts may involve the physical performance of services within this state after July 1, 2008.
This statute does not require or provide for any enforcement by the
Attorney General. (The Attorney General may have duties as a “public
employer,” but the Plaintiffs are not seeking relief fromhim in that role.) The
Plaintiffs’ sole claim is that the Attorney General may have a role under
§ 1313(B) because of his duties in reviewing and approving state contracts and
his duty to enforce state law (presumably by bringing suit to make sure that
public employers comply with the statute). As for the alleged duty to review and
approve state contracts, the Plaintiffs have presented no evidence that such review
and approval is part of the work of the Attorney General. The statutes cited by
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the Plaintiffs do no more than authorize state agencies to request assistance from the Attorney General in preparing contracts, see 74 Okla. Stat. tit. 74, § 18b(A)(7) (2001), and authorize the Attorney General to enforce state law,see id. §§ 18b(A)(3), (9), (10), (16). And the Attorney General represents to this court that review of state-agency contracts by the Attorney General does not “occur as a matter of practice in Oklahoma.” Att’y Gen. Suppl. Br. at 3 (May 22, 2009). Consequently, the substance of an injunction against the Attorney General would be solely to enjoin him from bringing suit to require other public officials to comply with § 1313(B).
The Plaintiffs’ standing thus depends on their showing an actual and imminent threat that the Attorney General will bring or threaten suit to require public employers to comply with § 1313(B). I am aware of no such showing. Even if one could assume that the Attorney General has a particular interest in that statute and would be willing if not eager to take action against public employers who fail to comply with it, there is nothing in the record to suggest that any public employer is recalcitrant. It is pure speculation to believe that action by the Attorney General with respect to § 1313(B) is imminent, or that any imminent injury to be suffered by the Plaintiffs’ members from enforcement of § 1313(B) is fairly traceable to the Attorney General.
This is not a case in which the Attorney General is sued to make sure that all the bases are covered. For example, someone fearful of being improperly
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prosecuted under a criminal statute may sue the Attorney General as well as the district attorney, because the Attorney General may step in if the district attorney is precluded from doing so. In the circumstances before us in this case, however, if a public employer were enjoined from enforcing § 1313(B) because it is invalid, I would not expect the Attorney General to bring suit against the public employer to enforce that section.
We have previously held that a plaintiff lacked standing to bring a claim because the wrong defendant was selected. In Nova Health Systems v. Gandy, 416 F.3d. 1149, 1154 (10th Cir. 2005), the plaintiffs challenged an Oklahoma statute providing that “[a]ny person who performs an abortion on a minor without parental consent or knowledge shall be liable for the cost of any subsequent medical treatment such minor might require because of the abortion.” Okla. Stat. tit. 63, § 1-740. Under that law, suit to recoup such medical costs could be brought by minors or by “medical facilities that incur certain treatment costs that their patients fail to reimburse.” Nova Health, 416 F.3d at 1156. The plaintiff was an abortion provider, and the defendants were officials of state-run medical institutions who, in theory, could bring suit under the law to recoup treatment costs. The plaintiff, we said, had shown an injury in fact because the law created potential liability that discouraged the plaintiff from performing abortions absent parental consent, and there was evidence that a parental-consent policy would result in the loss of “some business.” Id. at 1155. We concluded, however, that
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the plaintiff could not fairly trace this injury to the named defendants. See id. at 1156–58. Although the defendant medical institutions could bring suit under the law, they could do so only if “they happen to (1) incur medical costs (2) not reimbursed by the patient (3) that were required because of an abortion (4) performed by [plaintiff] (5) on a minor (6) without parental consent or knowledge.” Id. at 1157. This speculative prospect was insufficient to support standing. See id. at 1157–58.
A decision by the Third Circuit is also instructive. 1st Westco Corporation v. School District of Philadelphia, 6 F.3d 108 (3d Cir. 1993), concerned a Pennsylvania statute “mandat[ing] that only Pennsylvania residents may work on public school construction projects.” Id. at 111. An individual school district could “refuse payment of [a] contract price to [a] contractor’” who employed outof-state labor. Id. at 113 (internal quotation marks omitted). A Pennsylvania school district invoked the law against Westco, a construction company that had employed New Jersey workers to renovate three of the district’s buildings. See id. at 111–12. Westco challenged the constitutionality of the residency requirement in federal court and obtained a favorable judgment against the school district, the Secretary of Education, and the Attorney General. See id. On appeal the Third Circuit ruled that there was “no case or controversy” between the Attorney General and Westco. Id. at 116. The court reasoned that the residency law charged the Pennsylvania school districts, not the Attorney General, with
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enforcing it. See id. at 113. The court acknowledged that the Attorney General had a “general duty to enforce the laws of the Commonwealth of Pennsylvania,” and that it was “theoretically possible” that he could “initiate[]suit against Westco’s interests.” Id. at 114. But because the record did not establish a “realistic likelihood” of such action, id., the court concluded that Westco lacked standing to sue the Attorney General, see id. at 114–16.
Following this authority, I would hold that the Plaintiffs lacked standing to bring their claim against the Attorney General. The record fails to show that the prospect of the Attorney General taking action to enforce Section 1313(B) is more than speculative. Because the district court lacked jurisdiction over that claim, we should reverse and remand for dismissal. I therefore concur in the reversal of the district court’s preliminary injunction against the enforcement of Section 1313(B).
II. SECTION 9 I respectfully dissent from the majority opinion’s holding that the district
court had jurisdiction to enjoin the enforcement of Okla. Stat. tit. 25, § 2385.32 (§ 9 of H.B. 1804). In my view, such injunctive relief is barred by the Tax Injunction Act (the “TIA”), 28 U.S.C. §1341. Federal law is clear that the TIA forbids injunctions against tax-withholding statutes. And § 2385.32 is such a
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statute; it requires withholding of income taxes from payments made to certain
independent contractors and provides for enforcement of the requirement.
Okla. Stat. tit. 25, § 2385.32(A) states:
If an individual independent contractor, contracting for the physical performance of services in this state, fails to provide to the contracting entity documentation to verify the independent contractor’s employment authorization, pursuant to the prohibition against the use of unauthorized alien labor through contract set forth in 8 U.S.C. Section 1324a(a)(4), the contracting entity shall be required to withhold state income tax at the top marginal income tax rate as provided in Section 2355 of Title 68 of the Oklahoma Statutes as applied to compensation paid to such individual for the performance of such services within this state which exceeds the minimum amount of compensation the contracting entity is required to report as income on United States Internal Revenue Service Form 1099.
In other words, if one who hires an independent contractor cannot obtain
verification of the contractor’s authorization to work in this country, the hirer
must withhold income taxes from its payments to the contractor.
Section 2385.32(B) makes the hirer liable for taxes that should have been
withheld.
Although it may be rare for a government to require tax withholding from
payments to independent contractors, it is not uncommon to require that taxes be
withheld from payments other than wages to employees. For example, Oklahoma
requires income-tax withholding from royalty payments to nonresidents. See
Okla. Stat. tit. 25, § 2385.26. Royalty withholding serves the purpose of ensuring
that nonresidents pay required Oklahoma income taxes. If Oklahoma is
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concerned that independent contractors, or certain subsets of independent
contractors, are likely to evade payment of required state income tax, it can
similarly require withholding of payments to those independent contractors to
ensure that their income-tax obligations will be satisfied.
The TIA forbids injunctions against such withholding statutes. The TIA
states:
The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.
28 U.S.C. § 1341 (emphasis added). Withholding is a method for collection of
taxes, and it cannot be enjoined even if the tax might be collected by other means.
In United States vs. American Friends Service Committee (AFSC), 419 U.S. 7
(1974) (per curiam), a district court had enjoined the government from enforcing
the statute requiring the withholding of income taxes from the salaries of AFSC’s
employees. (The employees wished to express their opposition to war by refusing
to pay taxes.) The Supreme Court held that the district court’s injunction was
barred by the Anti-Injunction Act, 26 U.S.C. § 7421(a). The Anti-Injunction Act
is the equivalent of the TIA for federal taxes. It states:
Except as provided in sections 6015(e), 6212(a) and (c), 6213(a), 6225(b), 6246(b), 6330(e)(1), 6331(i), 6672(c), 6694(c), 7426(a) and (b)(1), 7429(b), and 7436, no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.
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26 U.S.C. § 7421(a). The Supreme Court explained: [The employees] contend . . . that since the District Court enjoined only one method of collection, and the Government is still free to assess and levy their taxes when due, the Act does not apply. But this contention ignores the plain wording of the Act which proscribes any “suit for the purpose of restraining the assessment or collection of any tax.” The District Court’s injunction against the collection of the tax by withholding enjoins the collection of the tax, and is therefore contrary to the express language of the Anti-Injunction Act.
Am. Friends, 419 U.S. at 10. The two published circuit-court opinions that have addressed state
withholding statutes have held that the TIA likewise forbids injunctions against such statutes. See Int’l Lotto Fund v. Virginia State Lottery Dep’t, 20 F.3d 589, 591 (4th Cir. 1994); Sipe v. Amerada Hess Corp., 689 F.2d 396, 402-03 (3d Cir. 1982) (unemployment and disability withholding). I would follow the above authority and hold that the district court was deprived by the TIA of jurisdiction to enjoin the enforcement of Okla. Stat. tit. 25, § 2385.32. This is not to say that the statute can escape judicial scrutiny. The TIA does not bar a federal court from granting relief to one who has already paid a challenged state tax; and, as far as the TIA is concerned, a state court could enjoin enforcement of a state-court statute. The point is only that the district court lacked jurisdiction to consider the relief sought at this time.
The majority opinion makes what I believe to be two errors in its analysis. First, it ignores that what is collected under § 2385.32 is not some special
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assessment but income tax, pure and simple. Thus, if the withheld amount is
greater than what the independent contractor actually owes in income taxes, the
independent contractor can file an Oklahoma tax return and obtain a refund of the
excess payment.
Second, the majority opinion improperly focuses on the motive for
enactment of § 2385.32. The TIA is not concerned with why a state chooses to
collect its taxes in a particular manner. After all, even if the tax itself is
unconstitutional (because, say, of an improper purpose), the TIA forbids federal
courts from enjoining collection of the tax. In any event, I question the majority
opinion’s analysis of that motive. The opinion quotes selectively from § 2 of
H.B. 104, which is in essence the preamble to the statute. Section 2 states in full:
[1] The State of Oklahoma finds that illegal immigration is causing economic hardship and lawlessness in this state and that illegal immigration is encouraged when public agencies within this state provide public benefits without verifying immigration status. [2] The State of Oklahoma further finds that when illegal immigrants have been harbored and sheltered in this state and encouraged to reside in this state through the issuance of identification cards that are issued without verifying immigration status, these practices impede and obstruct the enforcement of federal immigration law, undermine the security of our borders, and impermissibly restrict the privileges and immunities of the citizens of Oklahoma. [3] Therefore, the people of the State of Oklahoma declare this it is a compelling public interest of this state to discourage illegal immigration by requiring all agencies within this state to fully cooperate with federal immigration authorities in the enforcement of federal immigration laws. [4] The State of Oklahoma also finds that other measures are necessary to ensure the integrity of various governmental programs and services.
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(emphases added). As I read this section, the general comments regarding illegal immigration expressed in the first two sentences are to support the proposition in the third sentence that state agencies should cooperate with federal authorities to enforce federal immigration law. The sentence relevant to the withholding statute, however, is the final sentence, which states that “other measures are necessary to ensure the integrity of various governmental programs and services.” It is therefore quite reasonable to infer that the purpose of the withholding statute is to protect the integrity of Oklahoma’s income-tax system by ensuring that unlawful immigrants acting as independent contractors pay Oklahoma income taxes, much as withholding on royalty payments to nonresidents ensures payment of taxes by nonresidents. III. SECTION 7(C)
I agree with the majority opinion in affirming the injunction against the Human Rights Commission with respect to enforcement of §7(C). The Plaintiffs have standing to seek the injunction; and §7(C) is preempted by the IRCA because it provides for the imposition of civil sanctions for employing unauthorized aliens. I would not go as far as the majority opinion, however, in saying that reinstatement, back pay, costs, and attorney fees are civil sanctions within the meaning of that term in the IRCA . I would be inclined to agree with the Second Circuit opinion in Madeira v. Affordable Housing Foundation, Inc., 469 F.3d 219, 239–40 (2d Cir. 2006), which held that compensatory relief does
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Appellate Case: 08-6127 Document: 01018360129 Date Filed: 02/02/2010 Page: 66 not come within the IRCA’s meaning of civil sanctions. Nevertheless, among the types of relief provided by Oklahoma for discriminatory practices (which include violations of §7(C)) are civil penalties of up to $50,000 for a first violation and $100,000 for a second. See Okla. Stat. tit. 25, §1506.6(B)(3). Perhaps some of §7(C) could be saved by excluding those civil-penalty provisions fromits reach; but the Defendants have not argued for such a result.
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Appellate Case: 08-6127 Document: 01018360135 Date Filed: 02/02/2010 Page: 1

Elisabeth A. Shumaker Clerk of Court

UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT OFFICE OF THE CLERK
Byron White United States Courthouse 1823 Stout Street
Denver, Colorado 80257 (303) 844-3157
February 02, 2010

Douglas E. Cressler Chief Deputy Clerk

Mr. Guy Lee Hurst Commissioners of the Land Office General Counsel 5801 North Broadway 200 Oklahoma City, OK 73118
Mr. Kevin L. McClure Attorney General for the State of Oklahoma 313 NE 21st Street Oklahoma City, OK 73105
Mr. Sean Robert McFarland Oklahoma Tax Commission Office of General Counsel 120 North Robinson, Suite 2000W Oklahoma City, OK 73102-7801
Ms. Sandra Rinehart Mr. Martin Daniel Weitman Attorney General for the State of Oklahoma 313 NE 21st Street Oklahoma City, OK 73105
RE: 08-6127, 08-6128, Chamber of Commerce of USA, et al v. Edmondson, et al Dist/Ag docket: 5:08-CV-00109-C
Dear Counsel:
Enclosed is a copy of the opinion of the court in the captioned case. Judgment was entered today.
Please contact this office if you have questions.
Sincerely,

Appellate Case: 08-6127 Document: 01018360135 Date Filed: 02/02/2010 Page: 2
Elisabeth A. Shumaker Clerk of the Court
cc: Jessee Alexander-Hoeppner Kathryn L. Bass Brad Berenson Change to Win Robin S. Conrad Walter Dellinger Justin Florence Kevin M. Fong Matthew Murray Jennifer Chang Newell Julie Ann Pace Robert Alton Parker Carter Glasgow Phillips Robert Rubin Burt M. Rublin Patrick M. Ryan David A. Selden Eric Shumsky Quin M. Sorenson Sri Srinivasan Patrick J. Szymanski Saritha Tice Daniel G. Webber Jr. John M. West Phillip G. Whaley Brian Jackson Wong
EAS/lg
2

 
 Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 1 of 17

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

(1) CHAMBER OF COMMERCE OF )

THE UNITED STATES OF AMERICA; )

(2) OKLAHOMA STATE CHAMBER OF )

COMMERCE AND ASSOCIATED

)

INDUSTRIES; (3) GREATER

)

OKLAHOMA CITY CHAMBER OF

)

COMMERCE; (4) METROPOLITAN )

TULSA CHAMBER OF COMMERCE, )

INC.; (5) OKLAHOMA RESTAURANT )

ASSOCIATION; and (6) OKLAHOMA )

HOTEL AND LODGING ASSOCIATION, )

)

Plaintiffs,

)

)

vs.

)

)

(1) BRAD HENRY, in his official capacity )

as Governor of the State of Oklahoma; )

(2) W.A. DREW EDMONDSON, in his )

official capacity as Attorney General of the )

State of Oklahoma; (3) KEITH

)

McARTOR; (4) STAN EVANS;

)

(5) MARK ASHTON; (6) ANN

)

CONG-TANG; (7) ELVIA HERNANDEZ; )

(8) RITA MAXWELL; (9) TERESA

)

RENDON; (10) SAMMIE VASQUEZ, SR., )

and (11) JUANITA WILLIAMS, in their )

official capacities as Members of the

)

Oklahoma Human Rights Commission; and )

(12) THOMAS E. KEMP, JR.; (13) JERRY )

JOHNSON, and (14) CONSTANCE IRBY, )

in their official capacities as Members of )

the Oklahoma Tax Commission,

)

)

Defendants. )

No. CIV-08-109-C

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 2 of 17
MEMORANDUM OPINION AND ORDER Plaintiffs in this action challenge the execution and enforcement of Sections 7 and 9 of the Oklahoma Taxpayer and Citizen Protection Act of 2007, more commonly known as House Bill 1804 (herein either “H.B. 1804” or “the Act”). Se e H.B. 1804, 51st Leg., 1st Sess. (Okla. 2007). According to Plaintiffs, the challenged provisions of H.B. 1804 cannot survive, as they are preem pted by federal law and/or are unconstitutional under the Supremacy Clause of the U.S. Constitution. Plaintiffs have now filed a Motion for Preliminary Injunction seeking to preclude certain portions of the Ac t from becoming enforceable as scheduled on July 1, 2008. 1 Defendants in various groupings have filed responses arguing injunctive relief is inappropriate. To begin, the Court will set out the portions of the Act challenged by Plaintiff. Plaintiffs’ Complaint challenges two sections of Oklahom a law which are the codification of H.B. 1804. First, Section 7 of H.B. 1804, now codified at 25 Okla. Stat. § 1313, which states: A. Every public em ployer shall register with and utilize a Status
Verification System as described in subparagraphs a or b of paragraph 1 of Section 6 of this act to verify the federal epmloyment authorization status of all new employees. B. 1. After July 1, 2008, no public employer shall enter into a contract for
the physical perform ance of services within this state unless the contractor registers and participates in the Status Verification System to verify the work eligibility status of all new employees.
1 H.B. 1804 became effective on November 1, 2007. However, the provisions of Section 7 codified at 25 Okla. Stat. § 1313 are not enforceable until July 1, 2008.
2

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 3 of 17

2. After July 1, 2008, no contractor or subcontractor who enters into a contract with a public em ployer shall enter into suc h a contract or subcontract in connection with the physical performance of services within this state unless the contractor or subcontractor registers and participates in the Status Verification Systemto verify information of all new employees.

3. The provisions of this subsection shall not apply to any contracts entered into prior to the effective date of this section even though such contracts m ay involve the physica l performance of services within this state after July 1, 2008.

C. 1. It shall be a discrim inatory practice for an em ploying entity to discharge an employee working in Oklahoma who is a United States citizen or permanent resident alien while retaining an employee who the employing entity knows, or reasonably should have known, is an unauthorized alien hired after July 1, 2008, and who is working in Oklahoma in a job category that requires equal skill, effort, and responsibility, and which is pe rformed under sim ilar working conditions, as defined by 29 U.S.C. Section 206(d)(1), as the job category held by the discharged employee.

2. An employing entity which, on the date of the discharge in question, was currently enrolled in and used a Status Verification System to verify the employment eligibility of its employees in Oklahoma hired after July 1, 2008, shall be exempt from liability, investigation, or suit arising from any action under this section.

3. No cause of a ction for a violation of this subsection shall arise anywhere in Oklahoma law but fromthe provisions of this subsection.

(Footnotes omitted.) Second is Section 9 of H.B. 1804, now codif ied at 68 Okla. Stat.

§ 2385.32, which states:2

A. If an individual independent contractor, contracting for the physical

performance of services in this state, fails to provide to the contracting entity

documentation to verify the independent contractor’s em

ployment

2 Section 2385.32 was effective and enforceable as of November 1, 2007. 3

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 4 of 17
authorization, pursuant to the prohibition against the use of unauthorized alien labor through contract set forth in 8 U.S.C., Section 1324a(a)(4), the contracting entity shall be required to withhold state inc ome tax at the top marginal income tax rate as provide d in S ection 2355 of Title 68 of the Oklahoma Statutes as applied to compensation paid to such individual for the performance of such services within this state which exceeds the m inimum amount of compensation the contracting entity is required to report as income on United States Internal Revenue Service Form 1099.
B. Any contracting entity who fails to com ply with the withholding requirements of this subsection shall be liable for the taxes required to have been withheld unless such contracting entity is exem pt from federal withholding with respec t to such individual pursuant to a properly filed Internal Revenue Service Form 8233 or its equivalent.
C. Nothing in this section is intended to create, or should be construed as creating, an employer-employee relationship between a contracting entity and an individual independent contractor.
According to Plaintiffs, these statutes cannot be enforced as they im properly conflict with
federal law and are thus preempted; therefore, Plaintiffs argue they are entitled to injunctive
relief barring Defendants from enforcing the challenged portions of H.B. 1804. Defendants
disagree, arguing Oklahoma’s law addresses issues within the realm of those matters left to
the states by the Constitution and Congress. Additionally, Defendants have filed Motions
to Dismiss, challenging the Court’s jurisdiction to consider Plaintiffs’ claims and whether
or not Plaintiffs have stated a claimfor relief. Prior to considering the request for injunctive
relief, the Court must first resolve the Motions to Dismiss filed by Defendants.
1. Motions to Dismiss
Defendants Governor Brad Henry (“Henry”) and Attorney General Drew Edmondson
(“Edmondson”) seek dismissal, arguing the Court lacks jurisdiction by operation of the Tax
4

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 5 of 17
Injunction Act, 28 U.S.C. § 1341. In the alternative, Henry and Edmondson argue Plaintiffs lack standing to challenge H.B. 1804 as they cannot show they will suffer any injury from the Act or that notions of federalismand comity should prevent this Court fromconsidering Plaintiffs’ action. Finally, He nry and Edm ondson argue that even if the federal laws Plaintiffs argue preempt H.B. 1804 are valid, H.B. 1804 does not im permissibly interfere with those federal laws.
Defendants Keith McArtor, Stan Evans, Mark Ashton, Ann Cong-Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Sr., and Juanita Williams, all members of the Oklahom a Human Rights Commission (“HRC”), filed a separate m otion which precisely mirrors that of Defendants Henry and Edmondson.
Defendants Constance Irby, Thomas E. Kemp, Jr., and Jerry Johnson, all state tax officials who are m embers of the Oklahom a Tax Commission (“Tax”), seek dismissa l of Plaintiffs’ action pursuant to Fed. R. Civ. P. 12(b)(1), (2), and (6) and Rule 12(h)(3). The Tax Defendants argue the Court’s jurisdiction over Plaintiffs’ case is prohibited by the Tax Injunction Act, 28 U.S.C. § 1341, and/or the Supremacy Clause.3
A. Tax Injunction Act All Defendants argue that Plaintiffs’ challenge to 68 Okla. Stat. § 2385.32 must fail because this Court is barred from considering it by operation of the Tax Injunction Act, 28
3 Plaintiffs have filed a motion seeking to strike the Reply Brieffiled by the Tax Defendants, arguing it raises issues for the first time. The Court finds the issues raised in the Reply Briefare not so distinct from those raised by other Defendants or in their original brief that they create surprise or unfair advantage. Accordingly, Plaintiffs’ Motion to Strike will be denied.
5

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 6 of 17
U.S.C. § 1341 (“TIA”). Defendants argue that the statute focuses on issues of state taxation and is therefore beyond the jurisdiction of the Court.
The TIA states: “[ t]he district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” According to Defendants, under the plain language of this statute, Plaintiffs must first pursue remedies in state court and, if those fail, in the United States Supreme Court. On this basis, Defendants argue that this Court lacks jurisdiction to consider Plaintiffs’ challenge to § 2385.32.
Under Tenth Circuit precedent, the “critical inquiry” in assessing the applicability of the TIA is “the purpose of the assessment and the ultimate use of the funds.” Marcus v. Kan. Dep’t of Revenue, 170 F.3d 1305, 1311 (10th Cir. 1999). In evaluating the purpose of the assessment, the Fourth Circuit has stated: “[if]regulation is the primary purpose of a statute, revenue raised under the statute will be consider ed a fee rather than a ta x.” S.C. ex rel. Tindal v. Block, 717 F.2d 874, 887 (4th Cir. 1983). The Frist Circuit has established a threepart test for determ ining whether an assessm ent is regulatory or a tax. First, does the assessment fall on many or all citizens, i.e., does it raise money for the general fund to be spent to benefit the entire community? Second, is the assessment imposed by the legislature or an agency? Third, and most determinative, is the assessment intended to raise revenue or control behavior? San Juan Cellular Tel. Co. v. Public Serv. Comm’n of P.R., 967 F.2d 683, 685 (1st Cir. 1992).
6

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 7 of 17
Upon review, it is clear that § 2385.32 is not a tax statute. First, it does not create a new tax; rather, it alters the manner in which the existing withholding tax rates are applied. Second, and m ost importantly, it is undisput ed that the underlying purpose of the Act, including § 2385.32, is to prevent the employment of illegal aliens. Thus, the clear purpose of 68 Okla. Stat. § 2385.32 is to regulate behavior, not raise revenue. For either reason, the TIA does not bar this Court’s c onsideration of Plaintiffs’ challenge to H.B. 1804. Accordingly, Defendants’ motion seeking dismissal on that basis will be denied.
B. Standing Defendants Henry, Edmondson, and HRC challenge Plaintiffs’ attack on 25 Okla. Stat. § 1313, arguing that Plaintiffs lack standing tochallenge the statute. According to these Defendants, Plaintiffs cannot challenge subsection (A) of the statute as they are not “public employers.” As to subsections (B) and (C), the se Defendants argue Plaintiffs can only establish standing if they adm it that they plan to hire an illegal alien after July 1, 2008. Plaintiffs disagree, arguing that in their role as cham bers of com merce and business associations representing thousands of statewide businesses, they have numerous members who will be adversely impacted by implementation of the challenged sections of H.B. 1804. Subsection (A) of Section 1313 only applies to “public em ployers.” This term is defined in 25 Okla. Stat. § 1312 as follows: “‘Public employer’ means every department, agency, or instrumentality of the state or a political subdivision of the state[.”] Plaintiffs do not challenge this subsection and raise no argument that it applies to them; nor do they even
7

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 8 of 17
remotely suggest that the y are seeking relief related to that subpart. Thus, Defendants’ arguments related to that subsection are immaterial.
As for subsections (B) and (C), Defenda nts’ interpretation of these portions of the statute is overly narrow. Under the clear terms of the Act, any employer who seeks to do business with the State after July 1, 2008, must comply with the terms of the Act by using one of two m ethods for verifying the status of their em ployees. To have standing, “[a] plaintiff must allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief.” Allen v. Wright, 468 U.S. 737, 751 (1984). Plaintiffs have provided evidence that their members intend to do business with the State and that using one of the status verification systems will cause the member harm. Although none of the Plaintiffs has alleged that any of the m will suffer individual harm , Plaintiffs have alleged potential injury to their membership. This allegation is sufficient to establish organizational standing. As stated in Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977):
we have recognized that an association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germ ane to the organization’s purpose; and (c) ne ither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. Here, any of Plaintiffs’ members will suffer a credible threat of injury from, enforcement of § 2385.32 or after July 1, 2008, from§ 1313; there is no need for the individual members to participate in this action; and seeking to prevent e nforcement of the Act is directly in line with Plaintiffs’ purpose of advocating for the benefit of their members before federal, state,
8

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 9 of 17
and local governments and court systems. Thus, the Court finds Plaintiffs have associational standing to challenge subsections (B) and (C) of § 1313.
C. Federalism and Comity. Defendants Henry, Edmondson, and HRC argue that Plaintiffs cannot pursue their claims in a federal forumas they are barred by questions of Eleventh Amendment immunity and/or sovereign immunity. These Defendants assert that because Oklahoma has not waived its sovereign immunity, Plaintiffs’ case can proceed only if the Court finds the doctrine announced in Ex parte Young 4 applies and that Congre ss properly a nd constitutionally abrogated the State’s sovereign interest when it enacted 8 U.S.C. § 1324a(h)(2).5 The Supreme Court, Tenth Circuit, and every other circuit that has considered the matter, has clearly held that when a 42 U.S.C. § 1983 suit seeks only prospective relief against a state official nam ed in his/her o fficial capacity, it is not barred by the Eleventh Amendment. The only real issue rem aining on the subject was recently addressed by the Supreme Court in Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635 (2002). In 2007, the Tenth Circuit analyzed the history of Ex parte Young and the effect of Verizon Maryland, and recognized the Suprem e Court had issued a c lear instruction for courts
4 209 U.S. 123 (1908). Under the doctrine announced i n this case, “when an official of a state agency is sued in his official capacity for prospective equitable r elief, he is generally not regarded as ‘the state’ for purposes of the Eleevnth Amendment and the case may proceed in federal court.” ANR Pipeline Co. v. Lafaver, 150 F.3d 1178, 1188 (10th Cir. 1998) (footnote omitted).
5 Plaintiffs argue this statute preempts H.B. 1804. A more detailed discussion of the statute and its impact on the Act occurs below.
9

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 10 of 17
considering whether the doctrine applied. Quoting Verizon Maryland , the Tenth Circuit stated: “‘[i] n determining whether the doctrine of Ex parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a “straightforward inquiry into whethe r [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.”’” Hill v. Kemp, 478 F.3d 1236, 1259 (10th Cir. 2007), cert. denied, ___ U.S. ___, 128 S. Ct. 873, and cert. denied, ___ U.S. ___, 128 S. Ct. 884 (2008). Explaining further, the Circuit noted that the question to be asked was whether the lawsuit imposes upon the State a monetary loss from a past breach of a legal duty. If it does not, the suit seeks only prospective relief, and the Eleventh Am endment is no bar. Id. Plaintiffs’ Complaint clearly seeks only prospective relief, as it requests that the Court prevent a future event rather than provide redress for a past harm . Accordingly, Eleventh Am endment immunity is inapplicable here.
D. Congressional authority to enact 8 U.S.C. § 1324a(h)(2). Defendants Henry, Edmondson, and HRC argue that Congress did not act with proper authority in passing 8 U.S.C. § 1324a(h)(2).6 According to these Defendants, when passing the statute Congress infringed upon the lawm aking autonomy of the State of Oklahom a without proper constitutional authority. As a result, these Defendants assert § 1324a(h)(2) must be analyzed under a rational basis standard. Finally, these Defendants argue that even
6 Pursuant to Fed. R. Civ. P. 5.1(b) and 28U.S.C. § 2403(a), the Court has issued notice to the United States Attorney General of Defendants’ challenge to the constitutionality of a federal statute. Although the Attorney General has not yet been heard on the issue, the Court can find that § 1324a(h)(2), is constitutional prior to any intervention by the Attorney General. See Wallach v. Lieberman, 366 F.2d 254, 257-58 (2d Cir. 1966).
10

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 11 of 17
if Congress acted with proper authority in passing the statute, that statute does not preempt H.B. 1804.
Section 1324a(h)(2) is part of the Immigration Control and Reform Act of 1986, and as passed by Congress, it states: “The 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.”
“The Supremacy clause of the United States Constitution invalidates state laws that ‘interfere with or are contrary to’ federal law.” N.J. Payphone Ass’n, Inc. v. Town of West New York, 299 F.3d 235, 241-42 (3d Cir. 2002) (quoting Gibbons v. Ogde n, 22 U.S. (9 Wheat.) 1, 211 (1824)). Thus, if H.B. 1804 interferes with or is contrary to § 1324a, it is preempted. Of course, the first step is examining whether Congress acted properly in passing § 1324a.
The Supreme Court has explained the purpose behind § 1324a: Congress enacted IRCA, [Im migration Reform and Control Act of 1986, 8 U.S.C. §§ 1101 et seq.] a comprehensive scheme prohibiting the employment of illegal aliens in the United States. § 101(a)(1), 100 Stat. 3360, 8 U.S.C. § 1324a. As we have previously noted, IRCA “ forcefully” made combating the employment of illegal aliens central to “[t]he policy of immigration law.” INS v. National Center for Immigrants’ Rights, Inc., 502 U.S. 183, 194, and n. 8, 112 S.Ct. 551, 116 L.Ed.2d 546 (1991). It did so by establishing an extensive “employment verification system,” § 1324a(a)(1), designed to deny employment to aliens who (a) are not lawfully present in the United States, or (b) are not lawfully authorized to work in the United States, § 1324a(h)(3).
11

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 12 of 17
Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 147-48 (2002). Years earlier, the Tenth Circuit recognized a long line of Supreme Court cases establishing without question Congress’s power to regulate matters related to immigration.
At the outset we note that the United States Constitution confers on Congress the power to regulate matters relating to immigration. U.S. Const. art. 1, § 9, cl. 1. In addition, the Supreme Court has “repeatedly emphasized that ‘over no conceivable subject is the legislative power of Congress m ore complete than it is over’ the admission of aliens.” Fiallo v. Bel,l430 U.S. 787, 792, 97 S.Ct. 1473, 1478, 52 L.Ed.2d 50 (1977) (quoting Oceanic Navigation Co. v. Stranahan, 214 U.S. 320, 339, 29 S.Ct. 671, 676, 53 L.Ed. 1013 (1909)). This broad grant of authority is exclusive to Congress. Galvan v. Press, 347 U.S. 522, 531-32, 74 S.Ct. 737, 742-43, 98 L.Ed. 911 (1954). Lopez v. U.S. INS , 758 F.2d 1390, 1392 (10th Cir. 1985). The Circuit sum med up its holding regarding the authority of Congress on im migration matters: “Because Congress may entirely pre-empt state authority in immigration matters, we dismiss plaintiff’s claimthat the INS actions violated the Tenth Amendment.” Id. Thus, Congress has the authority to preempt state laws on immigration matters. The question then becomes whether § 1324a(h)(2) prevents the State of Oklahom a from enacting and/or enforcing the challenged provisions of H.B. 1804. That question must of course be answered in the context of Plaintiffs’ Motion for Preliminary Injunction. 2. Preliminary Injunction Plaintiffs argue that a preliminary injunction is necessary to prevent enforcement of an unconstitutional law and that the Court should issue an order preventing the challenged portions of H.B. 1804 from going into effect. In response, Defendants argue that Plaintiffs cannot satisfy the prerequisites for obtaining injunctive relief.
12

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 13 of 17
It is well established that in order to obtain a preliminary injunction, the moving party must establish four factors: (1) it will suffer irreparable harmif the injunction is not granted, ( 2) its threatened injury outweighs the harm caused to the opposing party as a result of the injunction, (3) the injunction is not adverse to the public interest, and (4) it has a substantial likelihood of success on the merits of the case. Dominion Video Satellite, Inc. v. Echostar Satellite Corp., 356 F.3d 1256, 1260 (10th Cir. 2004). “[T]he more likely the plaintiff will succeed on the merits, the less the balance of irreparable harms need favor the plaintiff’s position.” Ty, Inc. v. Jones Group, In,c2.37 F.3d 891, 895 (7th Cir. 2001). Plaintiffs argue they are entitled to an injunction because the challenged provisions of H.B. 1804 conflict with, and a re preempted by, federal law. According to Plaintiffs, 8 U.S.C. § 1324a(h)(2) reflects Congress’s intent to preem pt the field of im migration regulation and because H.B. 1804 conflicts with § 1324a(h)(2), the state law m ust be set aside. Defendants argue H.B. 1804 is not im pacted by § 1324a(h)(2), as 68 Okla. Stat § 2385.32 does not impose a civil or criminal sanction, but rather a tax, and taxation is an area within the state’s control. A sim ilar argument is raised in regard to 25 Okla. S tat. § 1313, as these Defendants argue it merely enforces the State’s right to contract with whom it chooses. Despite the clever parsing offered by Defendants, the Court finds Plaintiffs are substantially likely to establish that 68 Okla. Stat. § 2385.32 and 25 Okla . Stat § 1313 are preempted by 8 U.S.C. § 1324a(h)(2). While Defendants are correct that issues of taxation are within the rights of the State to regulate, Plaintiffs are likely to prove that the statute at
13

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 14 of 17
issue here is not a taxation statute but rather a form of civil sanction.7 Section 2385.32 imposes a penalty of increasing the tax rate on an em ployer who doesn’t comply with the State’s immigration law. If Plaintiffs establish this fact, they would establish that § 2385.32 attempts to regulate immigration by imposing sanctions. In that regard, § 2385.32 would act in a manner expressly forbidden by § 1324a(h)(2).
The same holds true for § 1313. Although th at statute imposes penalties of loss of contract and/or facing a civil lawsuit for wrongful termination, those penalties are dependent on failing to follow the State’s regime for regulating the employment of illegal aliens. Thus, Plaintiffs may establish that the penalties contemplated by § 1313 are fairly considered civil sanctions and therefore preempted by § 1342a(h)(2). Defendants’ argument that the statute represents nothing m ore than the State choosing with whom it wishes to contract is misleading. Without question the State can, within lim its, set guidelines controlling the eligibility for contracts. However, the State cannot create or impose guidelines that conflict with the Constitution or federal law. Here, if Plaintiffs prove that § 1313 operates in a manner that im poses a sanction barred by § 1324a(h)(2), the state law m ust give way. Accordingly, the Court finds Plaintiffs have established a substantial likelihood of success on the merits of the case.8
7 As the Court noted above, § 2385.32 is not a “taxation” statute for which injunctive relief is prohibited by the TIA. For purposes of the discussion here, i.e., likelihood of success on the merits, the Court focuses on whether the statute is a civil sanction as defined by § 1324a(h)(2).
8 Because likelihood of success on the merits appears by virtue of express preemption alone, it is unnecessary to consider, at this stage, the arguments related to other theories of preemption.
14

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 15 of 17
Turning to the issue of irreparable harm , the Court finds this re quirement is also satisfied. Plaintiffs have provided affidavits demonstrating that the challenged portions of H.B. 1804 will cause them to suffer irreparable harm. Indeed, as Plaintiffs point out, if the challenged provisions become enforceable, Plaintiffs will face the choice of complying with either state or federal law, but not both. As Plaintiffs note in their brief, federal law prohibits use of the Status Verification Systems to verify employment eligibility. Yet, if Plaintiffs do not use the system to do that, they have failed to comply with H.B. 1804. Further, the State, through H.B. 1804, attem pts to restrict the docum ents adequate to verify a potential employees status, but this restriction is contrary to the instructions set by federal law for using the I-9 form. Additionally, if Section 7 of H.B. 1804 becomes enforceable, Plaintiffs will also be forced to comply with a law that may ultimately be found to be preempted, and no method of compensation can remedy these harms. As for § 2385.32, which is already in effect, Plaintiffs have offered evidence through affidavits establishing that it is now causing and will likely continue to cause irreparable harm.
The Court further finds that the potential harm to Plaintiffs outweighs any harm to Defendants caused by the brief delay until the matter can be finally resolved. There is little doubt that the issues H.B. 1804 seeks to address have existed for a long time. Further, it is clear that issues of illegal im migration are a pressing issue for both the State and Federal government. Any delay in enforcing th e provisions of H.B. 1804 necessitated by determining their validity will have a de minimis impact on Defendants’ interests and a final
15

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 16 of 17

resolution to the issue will play a significant role in defining which governm

ent is

responsible and authorized to address the immigration issue.

Finally, while the public clearly has an interest in issues of illegal immigration, and

no court should treat the prospect of overturning state law without grave consideration, the

Constitution requires that the will of the States must occasionally give way to the need for

uniformity among the States, and that uniform ity can only be accom plished through

congressional action. Thus, for now, the provisions of H.B. 1804 challenged by Plaintiffs

must be enjoined until a final determination can be made about the extent to which States can

permissibly regulate without interfering with are as reserved exclusively for congressional

action.9 The Court is not deciding that P laintiffs will ultimately prevail, rather, when the

materials before the Court are viewed as the facts and law exist today, it appears that

Plaintiffs are likely to prevail and consequently are entitled to a preliminary injunction.

CONCLUSION

For the reasons set forth herein, the Court f inds that Plaintiffs have demonstrated a

risk of harm from the enforcement of 25 Okla. Stat. § 1313(B) & (C) and 68 Okla. Stat.

§ 2385.32. Thus, Plaintiffs have standing to challenge those stat utes. Further, the Court

9 Although raised by neither party, the Court has considered the need for Plaintiffs to post security prior to issuance of aninjunction. After consideration ofthe merits of the parties’ position and any potential harm to Defendants from the grant of injunctive relief, the Court finds no bond is necessary. See Winnebago Tribe of Neb. v. Stovall, 341 F.3d 1202, 1206 (10th Cir. 2003) (finding no bond necessary where there was no showi ng of harm from injunction.); Moltan Co. v. Eagle-Picher Indus., Inc., 55 F.3d 1171, 1176 (6th Cir. 1995) (finding no bond necessary where plaintiff had strong likelihood of success on merits.).
16

Case 5:08-cv-00109-C Document 59 Filed 06/04/2008 Page 17 of 17 finds Plaintiffs have stated c laims which, if proven, would entitle them to relief. Accordingly, the Motion to Dismiss Complaint for Declaratory and Injunctive Relief (Dkt. No. 25) is DENIED; the Rule 12(b) and 12(h)(3) Motion to Disimss Irby, Kemp and Johnson (Dkt. No. 42) is DENIED; the Motion to Dismiss Complaint for Declaratory and Injunctive Relief (Dkt. No. 48) is DENIED; Plaintiffs’ Motion to Strike the Reply Brief of Thomas E. Kemp, Jr., Jerry Johnson, and Constance Irby (Dkt. No. 57) is DENIED. Because of the need to determine the validity of the State’s action in an area typically reserved for congressional action and the irreparable harm Plaintiffs will suffer if an unconstitutional Act is enforced, the Court finds Plaintiffs’ Motion for Preliminary Injunction (Dkt. No. 5) should be and is GRANTED.
IT IS SO ORDERED this 4th day of June, 2008.
17

 
 Case 5:08-cv-00109-C Document 114 Filed 12/19/12 Page 1 of 4

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

CHAMBER OF COMMERCE OF THE UNITED

)

STATES OF AMERICA; OKLAHOMA STATE

)

CHAMBER OF COMMERCE AND ASSOCIATED )

INDUSTRIES; GREATER OKLAHOMA CITY

)

CHAMBER OF COMMERCE; METROPOLITAN )

TULSA CHAMBER OF COMMERCE, INC.;

)

OKLAHOMA RESTAURANT ASSOCIATION;

)

and OKLAHOMA HOTEL AND LODGING

)

ASSOCIATION,

)

)

Plaintiffs,

)

vs.

)

)

BRAD HENRY, in his official capacity as Governor of )

the State of Oklahoma; W.A. DREW EDMONDSON, )

in his official capacity as Attorney General of the State )

of Oklahoma; KEITH MCARTOR, STAN EVANS, )

MARK ASHTON, ANN CONG-TANG, ELVIA

)

HERNANDEZ, RITA MAXWELL, TERESA

)

RENDON, SAMMIE VASQUEZ, SR., JUANITA

)

WILLIAMS, in their official capacities as Members )

of the Oklahoma Human Rights Commission; and

)

THOMAS E. KEMP, JR., JERRY JOHNSON, and

)

CONSTANCE IRBY, in their official capacities as

)

Members of the Oklahoma Tax Commission,

)

)

Defendants.

)

Case No. CIV-08-109-C

DECREE FOR PERMANENT PROSPECTIVE INJUNCTIVE RELIEF

Upon consideration of the record in this case and hearing agreement of the parties, the

Court enters this decree awarding judgment in part to the Defendants, and judgment in part to

the Plaintiffs and granting a permanent injunction in Plaintiffs’ favor.

Case 5:08-cv-00109-C Document 114 Filed 12/19/12 Page 2 of 4
BACKGROUND 1. In 2007, the Oklahoma Legislature passed the Oklahoma Taxpayer and Citizen Protection Act of 2007 (hereinafter referred to as HB 1804). HB 1804 contained an effective date of November 1, 2007. 2. On February 1, 2008, Plaintiffs instituted this lawsuit challenging Sections 7(b), 7(c), and 9 of HB 1804 as preempted under federal law, and seeking declaratory and injunctive relief. Section 7(b) of HB 1804, codified at 25 Okla. Stat. § 1313(a) and (b), requires persons contracting with the State to use the employment authorization system known as E-Verify; Section 7(C), codified at 25 Okla. Stat. § 1313(c), creates a cause of action for discrimination against employers who terminate an authorized employee while retaining an unauthorized employee; Section 9, codified at 68 Okla. Stat. § 2385.32, requires businesses to verify individual independent contractors’ authorization status and creates a withholding for work performed by individual independent contractors. 3. The complaint named as Defendants the then-current Governor of the State of Oklahoma (Brad Henry), Attorney General of the State of Oklahoma (Drew Edmondson), members of the Oklahoma Human Rights Commission in their official capacities (Keith McArtor, Stan Evans, Mark Ashton, Ann Cong-Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Sr., Juanita Williams), and members of the Oklahoma Tax Commission in their official capacities (Thomas E. Kemp, Jr., Jerry Johnson, Constance Irby). 4. On June 4, 2008, this Court entered a preliminary injunction enjoining the Defendants from enforcing the challenged laws. (Doc. 59 and 60.)
-2-

Case 5:08-cv-00109-C Document 114 Filed 12/19/12 Page 3 of 4
5. This Court’s order was appealed to the U.S. Court of Appeals for the Tenth Circuit, in consolidated case numbers 08-6127 and 08-6128On February 2, 2010, the Tenth Circuit issued its ruling affirming the granting of the preliminary injunction against enforcement of HB 1804 § 7(c) (25 Okla. Stat. § 1313(c)) and HB 1804 § 9 (68 Okla. Stat. § 2385.32) by the Oklahoma Human Rights Commissioners and the Oklahoma Tax CommissionersHowever, the appeals court vacated the preliminary injunction against enforcement of HB 1804 § 7(b) (25 Okla. Stat. § 1313(a) and (b)) by the Oklahoma Attorney GeneralThe mandate issued on April 27, 2010.
6. On May 26, 2011, the U.S. Supreme Court issued its ruling in Chamber of Commerce of the United States of America v. Whiting, ___ U.S. ___, 131 S. Ct. 1968 (2011), holding that an Arizona law requiring employers to use E-Verify was not preempted by federal law.
7. In its 2011 session, the Oklahoma legislature passed SB 763 (uncodified) which directed that, by July 1, 2012, all duties and responsibilities of the Oklahoma Human Rights Commission would be transferred to the Oklahoma Attorney General.
8. In the Oklahoma state elections of 2010, Governor Brad Henry was succeeded by The Honorable Mary Fallin, and Attorney General Drew Edmondson was succeeded by Scott Pruitt.
ORDERS Based on the record in this matter and the agreement of the parties, the Court enters the following orders:
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Case 5:08-cv-00109-C Document 114 Filed 12/19/12 Page 4 of 4
9. Defendants Keith McArtor, Stan Evans, Mark Ashton, Ann Cong-Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Sr., and Juanita Williams, in their official capacities as members of the Oklahoma Human Rights Commission, are hereby dismissed. Attorney General Scott Pruitt, in his official capacity as Attorney General for the State of Oklahoma, is ordered substituted in place of the dismissed parties.
10. The Honorable Mary Fallin, in her official capacity as Governor of the State of Oklahoma, is ordered substituted for Brad Henry.
11. Judgment to issue in favor of the Defendants on Plaintiffs’ challenge to HB 1804 § 7(b) (25 Okla. Stat. § 1313(a) and (b)).
12. Judgment to issue in favor of the Plaintiffs on Plaintiffs’ challenge to HB 1804 § 7(c) (25 Okla. Stat. § 1313(c)), and the Defendants are permanently enjoined from enforcing said provision.
13. Judgment to issue in favor of Plaintiffs on Plaintiffs’ challenge to HB 1804 § 9 (68 Okla. Stat. § 2385.32) and the Defendants are permanently enjoined from enforcing said provision.
14. All parties to bear their own fees and costs in this matter. 15. Judgment to issue separately. IT IS SO ORDERED this 19th day of December, 2012.
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 Case 5:08-cv-00109-C Document 115 Filed 12/19/12 Page 1 of 2

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

CHAMBER OF COMMERCE OF THE UNITED )

STATES OF AMERICA; OKLAHOMA STATE )

CHAMBER OF COMMERCE AND ASSOCIATED )

INDUSTRIES; GREATER OKLAHOMA CITY )

CHAMBER OF COMMERCE; METROPOLITAN )

TULSA CHAMBER OF COMMERCE, INC.;

)

OKLAHOMA RESTAURANT ASSOCIATION; )

and OKLAHOMA HOTEL AND LODGING

)

ASSOCIATION,

)

)

Plaintiffs,

)

vs.

)

)

BRAD HENRY, in his official capacity as Governor of)

the State of Oklahoma; W.A. DREW EDMONDSON, )

in his official capacity as Attorney General of the State)

of Oklahoma; KEITH MCARTOR, STAN EVANS, )

MARK ASHTON, ANN CONG-TANG, ELVIA )

HERNANDEZ, RITA MAXWELL, TERESA

)

RENDON, SAMMIE VASQUEZ, SR., JUANITA )

WILLIAMS, in their official capacities as Members )

of the Oklahoma Human Rights Commission; and )

THOMAS E. KEMP, JR., JERRY JOHNSON, and )

CONSTANCE IRBY, in their official capacities as )

Members of the Oklahoma Tax Commission,

)

)

Defendants.

)

Case No. CIV-08-109-C

JUDGMENT

The Court enters the following judgments in the above styled matter:

1. Judgment entered in favor of the Plaintiffs on Plaintiffs’ claims challenging

HB 1804 § 7(c) (25 Okla. Stat. § 1313(c)). The Defendants are permanently enjoined from

enforcing said provision.

Case 5:08-cv-00109-C Document 115 Filed 12/19/12 Page 2 of 2
2. Judgment entered in favor of the Plaintiffs on Plaintiffs’ claims challenging HB 1804 § 9 (68 Okla. Stat. § 2385.32). The Defendants are permanently enjoined from enforcing said provision.
3. Judgment entered in favor of the Defendants on Plaintiffs’ claims challenging HB 1804 § 7(b) (25 Okla. Stat. § 1313(a) and (b)).
4. All parties to bear their own fees and costs. No attorney’s fees or costs to be awarded.
DATED this 19th day of December, 2012.
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 Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 1 of 18
CLOSED,COUCH,_EB,_EP,_JL,_KH
U.S. District Court Western District of Oklahoma[LIVE] (Oklahoma City)
CIVIL DOCKET FOR CASE #: 5:08−cv−00109−C

Chamber of Commerce of the United States of America et al v. Henry et al Assigned to: Honorable Robin J. Cauthron Case in other court: 10 Circuit Court of Appeals, 08−06127
United States Court of Appeals 10th Circuit, 08−06128
USCA Tenth Circuit No., 08−06204 Cause: 28:1331 Fed. Question
Plaintiff

Date Filed: 02/01/2008 Date Terminated: 12/19/2012 Jury Demand: None Nature of Suit: 950 Constitutional − State Statute Jurisdiction: Federal Question

United States of America Chamber of Commerce

represented by Bradford Allan Berenson Sidley Austin−DC 1501 K Street NW Washington, DC 20005 202−736−8971 Fax: 202−736−8711 Email: bberenson@sidley.com ATTORNEY TO BE NOTICED

Carter Glasgow Phillips Sidley Austin−DC 1501 K Street NW Washington, DC 20005 202−736−8270 Fax: 202−736−8711 Email: cphillips@sidley.com ATTORNEY TO BE NOTICED

Eric A Shumsky Sidley Austin−DC 1501 K Street NW Washington, DC 20005 202−736−8496 Fax: 202−736−8711 Email: eshumsky@sidley.com ATTORNEY TO BE NOTICED

Quin M Sorenson Sidley Austin−DC 1501 K Street NW Washington, DC 20005 202/736−8000 Fax: 202/736−8711 Email: qsorenson@sidley.com ATTORNEY TO BE NOTICED

Robert Alton Parker Sidley Austin−DC 1501 K Street NW Washington, DC 20005 202−736−3889 Fax: 202−736−8711 Email: raparker@sidley.com ATTORNEY TO BE NOTICED

Daniel G Webber , Jr Ryan Whaley Coldiron Shandy PC

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 2 of 18

119 N Robinson St Suite 900 Oklahoma City, OK 73102 405−239−6040 Fax: 405−239−6766 Email: dwebber@ryanwhaley.com ATTORNEY TO BE NOTICED

Patrick M Ryan Ryan Whaley Coldiron Shandy PC 119 N Robinson St Suite 900 Oklahoma City, OK 73102 405−239−6040 Fax: 405−239−6766 Email: pryan@ryanwhaley.com ATTORNEY TO BE NOTICED

Phillip G Whaley Ryan Whaley Coldiron Shandy PC 119 N Robinson St Suite 900 Oklahoma City, OK 73102 405−239−6040 Fax: 405−239−6766 Email: pwhaley@ryanwhaley.com ATTORNEY TO BE NOTICED

Plaintiff
Oklahoma State Chamber of Commerce and Associated Industries

represented by Bradford Allan Berenson (See above for address) ATTORNEY TO BE NOTICED

Carter Glasgow Phillips (See above for address) ATTORNEY TO BE NOTICED

Eric A Shumsky (See above for address) ATTORNEY TO BE NOTICED

Quin M Sorenson (See above for address) ATTORNEY TO BE NOTICED

Robert Alton Parker (See above for address) ATTORNEY TO BE NOTICED

Daniel G Webber , Jr (See above for address) ATTORNEY TO BE NOTICED

Patrick M Ryan (See above for address) ATTORNEY TO BE NOTICED

Phillip G Whaley (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Oklahoma City Chamber of Commerce Inc

represented by Bradford Allan Berenson (See above for address)

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 3 of 18

Greater

ATTORNEY TO BE NOTICED

Carter Glasgow Phillips (See above for address) ATTORNEY TO BE NOTICED

Eric A Shumsky (See above for address) ATTORNEY TO BE NOTICED

Quin M Sorenson (See above for address) ATTORNEY TO BE NOTICED

Robert Alton Parker (See above for address) ATTORNEY TO BE NOTICED

Daniel G Webber , Jr (See above for address) ATTORNEY TO BE NOTICED

Patrick M Ryan (See above for address) ATTORNEY TO BE NOTICED

Phillip G Whaley (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Tulsa Chamber of Commerce Inc Metropolitan

represented by Bradford Allan Berenson (See above for address) ATTORNEY TO BE NOTICED

Carter Glasgow Phillips (See above for address) ATTORNEY TO BE NOTICED

Eric A Shumsky (See above for address) ATTORNEY TO BE NOTICED

Quin M Sorenson (See above for address) ATTORNEY TO BE NOTICED

Robert Alton Parker (See above for address) ATTORNEY TO BE NOTICED

Daniel G Webber , Jr (See above for address) ATTORNEY TO BE NOTICED

Patrick M Ryan (See above for address) ATTORNEY TO BE NOTICED

Phillip G Whaley (See above for address) ATTORNEY TO BE NOTICED

Plaintiff

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 4 of 18

Oklahoma Restaurant Association

represented by Bradford Allan Berenson (See above for address) ATTORNEY TO BE NOTICED

Carter Glasgow Phillips (See above for address) ATTORNEY TO BE NOTICED

Eric A Shumsky (See above for address) ATTORNEY TO BE NOTICED

Quin M Sorenson (See above for address) ATTORNEY TO BE NOTICED

Robert Alton Parker (See above for address) ATTORNEY TO BE NOTICED

Daniel G Webber , Jr (See above for address) ATTORNEY TO BE NOTICED

Patrick M Ryan (See above for address) ATTORNEY TO BE NOTICED

Phillip G Whaley (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Oklahoma Hotel and Lodging Association

represented by Bradford Allan Berenson (See above for address) ATTORNEY TO BE NOTICED

Carter Glasgow Phillips (See above for address) ATTORNEY TO BE NOTICED

Eric A Shumsky (See above for address) ATTORNEY TO BE NOTICED

Quin M Sorenson (See above for address) ATTORNEY TO BE NOTICED

Robert Alton Parker (See above for address) ATTORNEY TO BE NOTICED

Daniel G Webber , Jr (See above for address) ATTORNEY TO BE NOTICED

Patrick M Ryan (See above for address) ATTORNEY TO BE NOTICED

Phillip G Whaley (See above for address) ATTORNEY TO BE NOTICED

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 5 of 18

V. Intervenor Jonathan Lee Riches TERMINATED: 07/29/2008 V. Defendant Brad Henry in his official capacity as Governor of the State of OK
Defendant Drew Edmondson in his official capacity as Attorney General of the State of OK

represented by Kindanne C Jones Attorney General's Ofc−OKC 313 NE 21st St Oklahoma City, OK 73105 405−521−4274 Fax: 405−521−4518 Email: kindanne.jones@oag.ok.gov ATTORNEY TO BE NOTICED
Kevin L McClure Attorney General's Ofc−NE 21STREET−OKC 313 NE 21st St Oklahoma City, OK 73105 405−521−4274 Fax: 405−528−1867 Email: Kevin.McClure@oag.ok.gov ATTORNEY TO BE NOTICED
M Daniel Weitman Attorney General's Ofc−NE 21STREET−OKC 313 NE 21st St Oklahoma City, OK 73105 405−521−3921 Fax: 405−521−4518 Email: dan.weitman@oag.ok.gov ATTORNEY TO BE NOTICED
Sandra D Rinehart Attorney General's Ofc−NE 21STREET−OKC 313 NE 21st St Oklahoma City, OK 73105 405−521−4274 Fax: 405−521−4518 Email: fhc.docket@oag.ok.gov ATTORNEY TO BE NOTICED
represented by Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED
Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED
M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 6 of 18

Sandra D Rinehart (See above for address) ATTORNEY TO BE NOTICED

Defendant Keith McArtor

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant Stan Evans

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant Mark Ashton

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant Ann Cong−Tang

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant Elvia Hernandez

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 7 of 18

(See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant Rita Maxwell

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant Teresa Rendon

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant
Sammie Vasquez Sr

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant
Juanita Williams in their official capacities as Memebers of the OK Human Rights Commission

represented by Kevin L McClure (See above for address) ATTORNEY TO BE NOTICED

Kindanne C Jones (See above for address) ATTORNEY TO BE NOTICED

M Daniel Weitman (See above for address) ATTORNEY TO BE NOTICED

Defendant
Thomas E Kemp Jr

represented by Guy L Hurst Oklahoma Tax Commission

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 8 of 18

100 N Broadway Ave Suite 1500 Oklahoma City, OK 73102 405−319−8550 Fax: 405−601−7144 Email: guy.hurst@clo.state.ok.us TERMINATED: 08/20/2009

Kathryn L Bass Oklahoma Tax Commission 100 N Broadway Ave Suite 1500 Oklahoma City, OK 73102 405−319−8550 Fax: 405−601−7144 Email: kbass@tax.ok.gov TERMINATED: 12/22/2009

Larry D Patton Oklahoma Tax Commission 120 N Robinson Ave Suite 2000 W Oklahoma City, OK 73118 405−319−8538 Fax: 405−601−7144 Email: lpatton@tax.ok.gov ATTORNEY TO BE NOTICED

Sean R McFarland Oklahoma Tax Commission 100 N Broadway Ave Suite 1500 Oklahoma City, OK 73102 405−521−3141 Fax: 405−521−2036 Email: smcfarland.wd@oktax.state.ok.us ATTORNEY TO BE NOTICED

Defendant Jerry Johnson

represented by Guy L Hurst (See above for address) TERMINATED: 08/20/2009

Kathryn L Bass (See above for address) TERMINATED: 12/22/2009

Larry D Patton (See above for address) ATTORNEY TO BE NOTICED

Sean R McFarland (See above for address) ATTORNEY TO BE NOTICED

Defendant
Constance Irby in their official capacities as Members of the OK Tax Commission

represented by Guy L Hurst (See above for address) TERMINATED: 08/20/2009

Kathryn L Bass (See above for address) TERMINATED: 12/22/2009

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 9 of 18
Larry D Patton (See above for address) ATTORNEY TO BE NOTICED
Sean R McFarland (See above for address) ATTORNEY TO BE NOTICED

Date Filed 02/01/2008
02/01/2008 02/01/2008 02/01/2008 02/01/2008 02/01/2008 02/01/2008
02/01/2008

# Docket Text
1 COMPLAINT against Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Thomas E Kemp, Jerry Johnson, Constance Irby, Brad Henry, Drew Edmondson and Keith McArtor, filed by Chamber of Commerce of the United States of America, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association and Oklahoma Hotel and Lodging Association. (Attachments: # 1 Civil Cover Sheet, # 2 Attachment to Civil Cover Sheet)(nm, ) (Entered: 02/01/2008)
Summons Issued 2/1/2008 as to Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Thomas E Kemp, Jerry Johnson, Constance Irby, Brad Henry, Drew Edmondson and Keith McArtor. Summonses to be picked up by filing attorney Phillip G Whaley (nm, ) (Entered: 02/01/2008)
2 ENTRY of Appearance by Patrick M Ryan on behalf of Chamber of Commerce of the United States of America, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Ryan, Patrick) (Entered: 02/01/2008)
3 ENTRY of Appearance by Phillip G Whaley on behalf of Chamber of Commerce of the United States of America, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Whaley, Phillip) (Entered: 02/01/2008)
4 ENTRY of Appearance by Daniel G Webber, Jr on behalf of Chamber of Commerce of the United States of America, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Webber, Daniel) (Entered: 02/01/2008)
5 MOTION for Preliminary Injunction by Chamber of Commerce of the United States of America, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Whaley, Phillip) (Entered: 02/01/2008)
6 MOTION for Leave to File Oversized Brief in Support of Plaintiffs' Motion for Preliminary Injunction by Chamber of Commerce of the United States of America, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Attachments: # 1 Exhibit 1−Part 1 of 10, # 2 Exhibit 1−Part 2 of 10, # 3 Exhibit 1−Part 3 of 10, # 4 Exhibit 1−Part 4 of 10, # 5 Exhibit 1−Part 5 of 10, # 6 Exhibit 1−Part 6 of 10, # 7 Exhibit 1−Part 7 of 10, # 8 Exhibit 1−Part 8 of 10, # 9 Exhibit 1−Part 9 of 10, # 10 Exhibit 1−Part 10 of 10)(Whaley, Phillip) (Entered: 02/01/2008)
7 MOTION for Leave to Appear Pro Hac Vice by Chamber of Commerce of the United States of America, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Attachments: # 1 Exhibit 1−Request for Admission of Carter Phillips, # 2 Exhibit 2−Request for Admission of Bradford Berenson, # 3 Exhibit 3−Request for Admission of Eric Shumsky, # 4 Exhibit 4−Request for Admission of Robert Parker)(Whaley,

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02/01/2008 02/01/2008
02/01/2008 02/01/2008 02/11/2008 02/13/2008 02/13/2008 02/13/2008 02/13/2008 02/13/2008 02/19/2008
02/19/2008

Phillip) (Entered: 02/01/2008)
8 ORDER granting 6 Motion for Leave to File Oversized Brief in Support of Plaintiffs' Motion for Preliminary Injunction. Signed by Honorable Robin J. Cauthron on 2/1/08. (lg, ) (Entered: 02/01/2008)
9 BRIEF IN SUPPORT re 5 MOTION for Preliminary Injunction by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Attachments: # 1 Exhibit 1−Declaration of Phillip G. Whaley, # 2 Exhibit 1.A−House Bill 1804, # 3 Exhibit 1.B−Form I−9, # 4 Exhibit 1.C−Memorandum of Understanding, # 5 Exhibit 1.D−SSNVS Handbook, # 6 Exhibit 1.E−Report to Congress on Basic Pilot Program 06/04, # 7 Exhibit 1.F (Part 1 of 5)−Findings of Web Basic Pilot Evalution, # 8 Exhibit 1.F (Part 2 of 5)−Findings of Web Basic Pilot Evalution, # 9 Exhibit 1.F (Part 3 of 5)−Findings of Web Basic Pilot Evalution, # 10 Exhibit 1.F (Part 4 of 5)−Findings of Web Basic Pilot Evalution, # 11 Exhibit 1.F (Part 5 of 5)−Findings of Web Basic Pilot Evalution, # 12 Exhibit 1.G−NCSL Immigrant Policy Project 11−29−07, # 13 Exhibit 1.H−Illinois Public Act 095−0138, # 14 Exhibit 1.I−Complaint in U.S. v. State of Illinois, # 15 Exhibit 2−Declaration of Steven Law, # 16 Exhibit 3−Declaration of Richard Rush, # 17 Exhibit 4−Declaration of Roy Williams, # 18 Exhibit 5−Declaration of Mike Neal, # 19 Exhibit 6−Declaration of James Hopper, # 20 Exhibit 7−Declaration of Michael Webb, # 21 Exhibit 8−Declaration of Caleb McCaleb)(Whaley, Phillip) (Entered: 02/01/2008)
10 Receipt for Money Received from Ryan Whaley & Coldiron for Plf's in the amount of $350.00, receipt number 125988 regarding 1 Complaint (nm, ) (Entered: 02/05/2008)
11 Receipt for Money Received from Sidley Austin for Plfs in the amount of $200.00, receipt number 125989 regarding 7 MOTION for Leave to Appear Pro Hac Vice (nm, ) (Entered: 02/05/2008)
12 ORDER granting 7 Motion for Admission Pro Hac Vice of Carter G. Phillips, Bradford A. Berenson, Eric A. Shumsky and Robert A. Parker. Signed by Honorable Robin J. Cauthron on 2/11/08. (lg, ) (Entered: 02/11/2008)
13 ENTRY of Appearance by M Daniel Weitman on behalf of Brad Henry, Drew Edmondson (Weitman, M) (Entered: 02/13/2008)
14 ENTRY of Appearance by Kevin L McClure on behalf of Brad Henry, Drew Edmondson (McClure, Kevin) (Entered: 02/13/2008)
15 MOTION for Extension of Time to Respond to Motion for Preliminary Injunction by Brad Henry, Drew Edmondson. (Weitman, M) (Entered: 02/13/2008)
16 ENTRY of Appearance by Sandra D Rinehart on behalf of Brad Henry, Drew Edmondson (Rinehart, Sandra) (Entered: 02/13/2008)
17 ORDER granting 15 Motion for Extension of Time to Respond to Motion for Preliminary Injunction. Signed by Honorable Robin J. Cauthron on 2/13/08. (lg, ) (Entered: 02/13/2008)
18 RETURN OF SERVICE − NON SUMMONS Motion for Leave to File Oversized Brief in Support of Plaintiff's Motion for Preliminary Injunction by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Brad Henry, SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Brad Henry served on 2/1/2008. (Whaley, Phillip) (Entered: 02/19/2008)
19 RETURN OF SERVICE − NON SUMMONS Motion for Leave to File Oversized Brief in Support of Plaintiff's Motion for Preliminary Injunction by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 11 of 18

02/19/2008
02/19/2008
02/19/2008
02/19/2008 02/19/2008 02/20/2008 02/21/2008 02/21/2008

Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Drew Edmondson, SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Drew Edmondson served on 2/1/2008. (Whaley, Phillip) (Entered: 02/19/2008)
20 RETURN OF SERVICE − NON SUMMONS Motion for Preliminary Injunction and Brief in Support of Motion for Preliminary Injunction by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Thomas E Kemp, SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Thomas E Kemp served on 2/7/2008. (Whaley, Phillip) (Entered: 02/19/2008)
21 RETURN OF SERVICE − NON SUMMONS Motion for Preliminary Injunction and Brief in Support of Preliminary Injunction by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Jerry Johnson, SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Jerry Johnson served on 2/7/2008. (Whaley, Phillip) (Entered: 02/19/2008)
22 RETURN OF SERVICE − NON SUMMONS Motion for Preliminary Injunction and Brief in Support of Motion for Preliminary Injunction by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Constance Irby, SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Constance Irby served on 2/7/2008. (Whaley, Phillip) (Entered: 02/19/2008)
23 RETURN OF SERVICE − NON SUMMONS Brief in Support of Motion for Preliminary Injunction by Serving Brad Henry by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Whaley, Phillip) (Entered: 02/19/2008)
24 RETURN OF SERVICE − NON SUMMONS Brief in Support of Motion for Preliminary Injunction by Serving W. A. Drew Edmondson by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Whaley, Phillip) (Entered: 02/19/2008)
25 MOTION to Dismiss by Brad Henry, Drew Edmondson. (McClure, Kevin) (Entered: 02/20/2008)
26 ENTRY of Appearance by Robert Alton Parker on behalf of United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Parker, Robert) (Entered: 02/21/2008)
27 ENTRY of Appearance by Carter Glasgow Phillips on behalf of United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 12 of 18

02/21/2008 02/21/2008 02/26/2008 02/26/2008 02/26/2008 02/26/2008 02/26/2008

Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Phillips, Carter) (Entered: 02/21/2008)
28 ENTRY of Appearance by Bradford Allan Berenson on behalf of United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Berenson, Bradford) (Entered: 02/21/2008)
29 ENTRY of Appearance by Eric A Shumsky on behalf of United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association (Shumsky, Eric) (Entered: 02/21/2008)
30 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Juanita Williams served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Juanita Williams on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Juanita Williams. (Whaley, Phillip) (Entered: 02/26/2008)
31 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Sammie Vasquez served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Sammie Vasquez, Sr. on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Sammie Vasquez. (Whaley, Phillip) (Entered: 02/26/2008)
32 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Teresa Rendon served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Teresa Rendon on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Teresa Rendon. (Whaley, Phillip) (Entered: 02/26/2008)
33 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Keith McArtor served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Keith McArtor on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Keith McArtor. (Whaley, Phillip) (Entered: 02/26/2008)
34 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 13 of 18

02/26/2008
02/26/2008
02/26/2008
02/26/2008
02/27/2008 02/27/2008 02/27/2008

Association, Oklahoma Hotel and Lodging Association. Rita Maxwell served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Rita Maxwell on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Rita Maxwell. (Whaley, Phillip) (Entered: 02/26/2008)
35 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Elvia Hernandez served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Elvia Hernandez on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Elvia Hernandez. (Whaley, Phillip) (Entered: 02/26/2008)
36 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Stan Evans served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Stan Evans on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Stan Evans. (Whaley, Phillip) (Entered: 02/26/2008)
37 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Ann Cong−Tang served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Ann Cong−Tang on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Ann Cong−Tang. (Whaley, Phillip) (Entered: 02/26/2008)
38 SUMMONS Returned Executed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. Mark Ashton served on 2/26/2008., AFFIDAVIT of Service for (1) Motion for Preliminary Injunction; (2) Brief in Support of Motion for Preliminary Injunction served on Mark Ashton on 02/26/2008, filed by Plaintiffs United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association, Defendant Mark Ashton. (Whaley, Phillip) (Entered: 02/26/2008)
39 MOTION for Leave to File Excess Pages Limit by Brad Henry, Drew Edmondson. (Weitman, M) (Entered: 02/27/2008)
40 ORDER granting 39 Defendants, Governor Brad Henry and W.A. Drew Edmondson's Motion to Exceed Page Limit. Signed by Honorable Robin J. Cauthron on 2/27/08. (lg, ) (Entered: 02/27/2008)
41 ENTRY of Appearance by Guy L Hurst on behalf of Thomas E Kemp, Jerry Johnson, Constance Irby (Hurst, Guy) (Entered: 02/27/2008)

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 14 of 18

02/27/2008 02/27/2008 02/28/2008 03/06/2008
03/07/2008 03/17/2008 03/17/2008 03/17/2008 03/17/2008 03/26/2008
03/27/2008 03/28/2008
03/28/2008
04/08/2008

42 MOTION to Dismiss by Thomas E Kemp, Jerry Johnson, Constance Irby. (Attachments: # 1 Attachment Panhandle Order)(Hurst, Guy) (Entered: 02/27/2008)
43 RESPONSE in Opposition re 5 MOTION for Preliminary Injunction filed by Thomas E Kemp, Jerry Johnson, Constance Irby. (Attachments: # 1 Attachment Panhandle Order)(Hurst, Guy) (Entered: 02/27/2008)
44 RESPONSE in Opposition re 5 MOTION for Preliminary Injunction filed by Brad Henry, Drew Edmondson. (Attachments: # 1 Exhibit A Slip 294294, # 2 Exhibit B Slip 4570303, # 3 Exhibit C 526 F. Supp 2d 968, # 4 Exhibit D Statement of Scharfen)(Weitman, M) (Entered: 02/28/2008)
45 UNOPPOSED MOTION for Leave to Modify the Briefing Schedule by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Whaley, Phillip) (Entered: 03/06/2008)
46 ORDER granting 45 Unopposed Motion to Modify the Briefing Schedule. Signed by Honorable Robin J. Cauthron on 3/7/08. (lg, ) (Entered: 03/07/2008)
47 ENTRY of Appearance by Kevin L McClure on behalf of Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Keith McArtor (McClure, Kevin) (Entered: 03/17/2008)
48 MOTION to Dismiss Complaint for Declaratory and Injunctive Relief by Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Keith McArtor. (McClure, Kevin) (Entered: 03/17/2008)
49 ENTRY of Appearance by M Daniel Weitman on behalf of Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Keith McArtor (Weitman, M) (Entered: 03/17/2008)
50 RESPONSE to Motion re 5 MOTION for Preliminary Injunction filed by Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Keith McArtor. (Attachments: # 1 Exhibit 1 − Utah Environmental Congress v. Troyer, et al.,)(Weitman, M) (Entered: 03/17/2008)
51 UNOPPOSED MOTION for Leave to File Oversized Briefs by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Whaley, Phillip) (Entered: 03/26/2008)
52 ORDER granting 51 Unopposed Motion for Leave to File Oversized Briefs. Signed by Honorable Robin J. Cauthron on 3/27/08. (lg, ) (Entered: 03/27/2008)
53 RESPONSE in Opposition re 25 MOTION to Dismiss, 42 MOTION to Dismiss, 48 MOTION to Dismiss Complaint for Declaratory and Injunctive Relief filed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Attachments: # 1 Exhibit 1−OK House News Release 08−01−07, # 2 Exhibit 2−OK House News Release 12−04−07)(Whaley, Phillip) (Entered: 03/28/2008)
54 REPLY to Response to Motion re 5 MOTION for Preliminary Injunction filed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Attachments: # 1 Exhibit 1−Air Transport Assoc. v. Cuomo, et al., # 2 Exhibit 2−Ochoa v. Bass, et al.)(Whaley, Phillip) (Entered: 03/28/2008)
55 REPLY to Response to Motion re 48 MOTION to Dismiss Complaint for Declaratory and Injunctive Relief filed by Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Brad

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 15 of 18

04/11/2008 04/16/2008
05/21/2008 06/04/2008
06/04/2008 06/06/2008 06/16/2008
06/18/2008 06/18/2008 06/19/2008 06/19/2008 06/20/2008 06/20/2008 06/30/2008 07/07/2008

Henry, Drew Edmondson, Keith McArtor. (McClure, Kevin) (Entered: 04/08/2008)
56 REPLY to Response to Motion re 42 MOTION to Dismiss filed by Thomas E Kemp, Jerry Johnson, Constance Irby. (Hurst, Guy) (Entered: 04/11/2008)
57 MOTION to Strike 56 Reply to Response to Motion and Brief inSupport or, in the Alternative, MOTION for Leave to File a Sur−Reply by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Attachments: # 1 Exhibit 1−Cook v. Medical Savings Insurance Co., # 2 Exhibit 2−Proposed Sur−Reply)(Whaley, Phillip) (Entered: 04/16/2008)
58 CERTIFICATION to the U.S. Attorney General. Signed by Honorable Robin J. Cauthron on 5/21/08. (lg, ) (Entered: 05/21/2008)
59 ORDER granting 5 Plaintiffs' Motion for Preliminary Injunction; denying 25 Motion to Dismiss Complaint for Declaratory and Injunctive Relief; denying 42 Rule 12(b) and 12(h)(3) Motion to Dismiss Irby, Kemp and Johnson; denying 48 Motion to Dismiss Complaint for Declaratory and Injunctive Relief; denying 57 Plaintiffs' Motion to Strike the Reply Brief of Thomas E Kemp, Jr., Jerry Johnson, and Constance Irby. Signed by Honorable Robin J. Cauthron on 6/4/08. (lg, ) (Entered: 06/04/2008)
60 ORDER of Injunction. Signed by Honorable Robin J. Cauthron on 6/4/08. (lg, ) (Entered: 06/04/2008)
61 ORDER Nunc Pro Tunc re 59 Memorandum and Order. Signed by Honorable Robin J. Cauthron on 6/6/2008. (nm, ) (Entered: 06/06/2008)
62 NOTICE OF APPEAL as to 59 Order on Motion to Dismiss,,,, Order on Motion to Strike,, Order on Motion for Leave to,, Order on Motion for Preliminary Injunction,,, 60 Order by Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Drew Edmondson, Keith McArtor. (McClure, Kevin) (Entered: 06/16/2008)
63 Transmission of Notice of Appeal to US Court of Appeals re 62 Notice of Appeal (nm, ) (Entered: 06/18/2008)
64 NOTICE OF APPEAL as to 61 Order, 59 Order on Motion to Dismiss,,,, Order on Motion to Strike,, Order on Motion for Leave to,, Order on Motion for Preliminary Injunction,,, 60 Order by Thomas E Kemp, Jerry Johnson, Constance Irby. (Hurst, Guy) (Entered: 06/18/2008)
65 Transmission of Notice of Appeal to US Court of Appeals re 64 Notice of Appeal (nm, ) (Entered: 06/19/2008)
66 10 Circuit Court of Appeals USCA Case Number 08−6127 for 62 Notice of Appeal, filed by Elvia Hernandez, Juanita Williams, Stan Evans, Keith McArtor, Drew Edmondson, Sammie Vasquez, Ann Cong−Tang, Teresa Rendon, Mark Ashton, Rita Maxwell. (nm, ) (Entered: 06/19/2008)
67 Receipt for Money Received from St of OK Attorney General in the amount of $455.00, receipt number 128306 regarding 62 Notice of Appeal (nm, ) (Entered: 06/23/2008)
68 United States Court of Appeals 10th Circuit USCA Case Number 08−6128 for 64 Notice of Appeal filed by Thomas E Kemp, Constance Irby and Jerry Johnson. (nm, ) (Entered: 06/23/2008)
69 Receipt for Money Received from Thomas E Kemp in the amount of $455.00, receipt number 128417 regarding 68 USCA Case Number 08−6128 (fp, ) (Entered: 07/01/2008)
70 TRANSCRIPT Order Form by Thomas E Kemp, Jerry Johnson, Constance Irby re 64 Notice of Appeal that transcripts are not necessary. See order form for dates and proceedings. (Hurst, Guy) (Entered: 07/07/2008)

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 16 of 18

07/08/2008
07/08/2008
07/08/2008 07/16/2008 07/16/2008
07/21/2008 07/21/2008 07/28/2008 07/29/2008
07/29/2008 09/15/2008 09/15/2008 09/17/2008 10/17/2008
11/07/2008 11/08/2008 08/07/2009 08/19/2009 08/20/2009

71 TRANSCRIPT Order Form by Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Brad Henry, Drew Edmondson, Keith McArtor that transcripts are not necessary. See order form for dates and proceedings. (McClure, Kevin) (Entered: 07/08/2008)
72 TRANSCRIPT Order Form by Stan Evans, Mark Ashton, Ann Cong−Tang, Elvia Hernandez, Rita Maxwell, Teresa Rendon, Sammie Vasquez, Juanita Williams, Drew Edmondson, Keith McArtor that transcripts are not necessary. See order form for dates and proceedings. (McClure, Kevin) (Entered: 07/08/2008)
Docket Annotation: Disregard Transcript Order Form 71 (nm, ) (Entered: 07/10/2008)
73 TRANSCRIPT LETTER advising that transcripts are not necessary re 64 Notice of Appeal filed by Thomas E Kemp, Constance Irby, Jerry Johnson. The record is ready for appeal purposes. (nm, ) (Entered: 07/16/2008)
74 TRANSCRIPT LETTER advising that transcripts are not necessary re 62 Notice of Appeal, filed by Elvia Hernandez, Juanita Williams, Stan Evans, Keith McArtor, Drew Edmondson, Sammie Vasquez, Ann Cong−Tang, Teresa Rendon, Mark Ashton, Rita Maxwell. The record is ready for appeal purposes. (nm, ) (Entered: 07/16/2008)
75 ENTRY of Appearance by J Max Weintraub on behalf of United States of America (Weintraub, J) (Entered: 07/21/2008)
76 NOTICE (other) by United States of America Notice of United States Concerning Intervention (Weintraub, J) (Entered: 07/21/2008)
77 Motion for Reconsideration and Clarification, MOTION to Intervene and Motion to Amend Complaint by Jonathan Lee Riches. (nm, ) (Entered: 07/28/2008)
78 RESPONSE to Motion re 77 MOTION to Intervene filed by United States of America Chamber of Commerce, Oklahoma State Chamber of Commerce and Associated Industries, Oklahoma City Chamber of Commerce Inc, Tulsa Chamber of Commerce Inc, Oklahoma Restaurant Association, Oklahoma Hotel and Lodging Association. (Whaley, Phillip) (Entered: 07/29/2008)
79 ORDER denying 77 Motion for Reconsideration and Clarification, Motion to Intervene as Defendant, Motion to Amend Complaint. Signed by Honorable Robin J. Cauthron on 7/29/08. (lg, ) (Entered: 07/29/2008)
80 NOTICE OF APPEAL as to 79 Order on Motion to Intervene by Jonathan Lee Riches. (nm, ) (Entered: 09/16/2008)
81 Transmission of Notice of Appeal to US Court of Appeals re 80 Notice of Appeal (nm, ) (Entered: 09/16/2008)
USCA Tenth Circuit No. USCA Case Number 08−6204 for 80 Notice of Appeal filed by Jonathan Lee Riches. (kw, ) (Entered: 09/18/2008)
82 ORDER of USCA Procedural termination without judicial action, The captioned appeals are dismissed for lack of prosecution pursuant to 10th Cir.R.42.1 and 10th Cir.R.3.3(B) as to 80 Notice of Appeal filed by Jonathan Lee Riches (Attachments: # 1 Attachment letter from US Court of Appeals)(nm, ) (Entered: 10/21/2008)
83 LETTER TO THE COURT from Rodney Antonio Alexander (fp, ) (Entered: 11/07/2008)
Docket Annotation: Disregard Letter 83 document was filed in civil case s/b be filed in criminal case. (nm, ) (Entered: 11/09/2008)
84 MOTION to Withdraw as Attorney with Brief, MOTION to Withdraw by Thomas E Kemp, Jerry Johnson, Constance Irby. (Hurst, Guy) (Entered: 08/07/2009)
85 ENTRY of Appearance by Kathryn L Bass on behalf of Thomas E Kemp, Jerry Johnson, Constance Irby (Bass, Kathryn) (Entered: 08/19/2009)
86 ORDER granting 84 Motion to Withdraw as Attorney. Attorney Guy L Hurst terminated. Signed by Honorable Robin J. Cauthron on 8/20/09. (lg, ) (Entered: 08/20/2009)

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 17 of 18

12/15/2009 12/18/2009 12/22/2009 02/02/2010
02/02/2010
04/27/2010
06/11/2010 06/22/2010
06/23/2010 08/18/2010 09/01/2010
09/02/2010 06/03/2011 06/09/2011 06/22/2011

87 ENTRY of Appearance by Sean R McFarland on behalf of Thomas E Kemp, Jerry Johnson, Constance Irby (McFarland, Sean) (Entered: 12/15/2009)
88 MOTION to Withdraw as Attorney by Thomas E Kemp, Jerry Johnson, Constance Irby. (Bass, Kathryn) (Entered: 12/18/2009)
89 ORDER granting 88 Motion to Withdraw as Attorney. Attorney Kathryn L Bass terminated. Signed by Honorable Robin J. Cauthron on 12/22/09. (lg, ) (Entered: 12/22/2009)
90 USCA OPINION as to 62 Notice of Appeal, filed by Elvia Hernandez, Juanita Williams, Stan Evans, Keith McArtor, Drew Edmondson, Sammie Vasquez, Ann Cong−Tang, Teresa Rendon, Mark Ashton, Rita Maxwell, 64 Notice of Appeal filed by Jerry Johnson, Thomas E Kemp, Constance Irby USCA case numbers 08−6127 and 08−6128 (Attachments: # 1 Cover letter)(nm, ) (Entered: 02/02/2010)
91 ORDER of USCA The district court's grant of summary judgment against the enforcement of Section 7 (B) is reversed. The judgment of the district court is AFFIRMED as to 62 Notice of Appeal, filed by Elvia Hernandez, Juanita Williams, Stan Evans, Keith McArtor, Drew Edmondson, Sammie Vasquez, Ann Cong−Tang, Teresa Rendon, Mark Ashton, Rita Maxwell, 64 Notice of Appeal filed by Jerry Johnson, Thomas E Kemp, Constance Irby. USCA case numbers 08−6137 and 08−6128 (nm, ) (Entered: 02/02/2010)
92 MANDATE ISSUED From USCA 62 Notice of Appeal, filed by Elvia Hernandez, Juanita Williams, Stan Evans, Keith McArtor, Drew Edmondson, Sammie Vasquez, Ann Cong−Tang, Teresa Rendon, Mark Ashton, Rita Maxwell, 64 Notice of Appeal filed by Jerry Johnson, Thomas E Kemp, Constance Irby (kr, ) (Entered: 04/28/2010)
93 STATUS/SCHEDULING DOCKET (lg, ) (Entered: 06/11/2010)
94 MOTION to Continue Status Conference and Related Status Report and Discovery Plan by Oklahoma City Chamber of Commerce Inc, Oklahoma Hotel and Lodging Association, Oklahoma Restaurant Association, Oklahoma State Chamber of Commerce and Associated Industries, Tulsa Chamber of Commerce Inc, United States of America Chamber of Commerce. (Whaley, Phillip) (Entered: 06/22/2010)
95 ORDER granting 94 Plaintiffs' Motion for Continuance of Status Conference and Related Status Report and Discovery Plan. Signed by Honorable Robin J. Cauthron on 6/23/10. (lg, ) (Entered: 06/23/2010)
96 STATUS/SCHEDULING DOCKET (lg, ) (Entered: 08/18/2010)
97 UNOPPOSED MOTION to Continue Status Conference and Related Status Report and Discovery Plan by Oklahoma City Chamber of Commerce Inc, Oklahoma Hotel and Lodging Association, Oklahoma Restaurant Association, Oklahoma State Chamber of Commerce and Associated Industries, Tulsa Chamber of Commerce Inc, United States of America Chamber of Commerce. (Whaley, Phillip) (Entered: 09/01/2010)
98 ENTER ORDER granting 97 Plaintiffs' Unopposed Motion for Continuance of Status Conference and Related Status Report and Discovery Plan. Signed by deputy clerk on 9/2/10. (lg, ) (Entered: 09/02/2010)
99 NOTICE (other) by All Plaintiffs of Decision (Attachments: # 1 Attachment Whiting Decision)(Whaley, Phillip) (Entered: 06/03/2011)
100 STATUS/SCHEDULING DOCKET (lg, ) (Entered: 06/09/2011)
101 JOINT MOTION to Continue Status Conference and Related Status Report and Discovery Plan by Mark Ashton, Ann Cong−Tang, Drew Edmondson, Stan Evans, Brad Henry, Elvia Hernandez, Constance Irby, Jerry Johnson, Thomas E Kemp, Rita Maxwell, Keith McArtor, Oklahoma City Chamber of Commerce Inc, Oklahoma Hotel and Lodging Association, Oklahoma Restaurant Association, Oklahoma State Chamber of Commerce and Associated Industries, Teresa Rendon, Tulsa Chamber of Commerce Inc, United States of America, United States of America Chamber of Commerce, Sammie Vasquez, Juanita Williams. (Whaley, Phillip) (Entered: 06/22/2011)

Case: 5:08-cv-109 As of: 11/04/2016 09:43 AM CDT 18 of 18

06/23/2011 08/30/2012 09/12/2012 10/02/2012 10/02/2012
10/02/2012
10/03/2012
10/03/2012 10/10/2012 10/10/2012 12/18/2012
12/19/2012 12/19/2012 12/19/2012

102 ORDER granting 101 Joint Motion for Continuance of Status Conference and Related Status Report and Discovery Plan. Signed by Honorable Robin J. Cauthron on 6/23/11. (lg, ) (Entered: 06/23/2011)
103 STATUS/SCHEDULING CONFERENCE DOCKET (lg) (Entered: 08/30/2012)
104 ENTRY of Appearance by Larry D Patton on behalf of Constance Irby, Jerry Johnson, Thomas E Kemp (Patton, Larry) (Entered: 09/12/2012)
105 MOTION for Leave to Appear Pro Hac Vice of Quin M. Sorenson by All Plaintiffs. (Attachments: # 1 Exhibit 1−Sorenson Request for Admission)(Whaley, Phillip) (Entered: 10/02/2012)
106 JOINT STATUS REPORT AND DISCOVERY PLAN by Defendants Mark Ashton, Ann Cong−Tang, Drew Edmondson, Stan Evans, Brad Henry, Elvia Hernandez, Constance Irby, Jerry Johnson, Thomas E Kemp, Rita Maxwell, Keith McArtor, Teresa Rendon, Sammie Vasquez, Juanita Williams, Plaintiffs Oklahoma City Chamber of Commerce Inc, Oklahoma Hotel and Lodging Association, Oklahoma Restaurant Association, Oklahoma State Chamber of Commerce and Associated Industries, Tulsa Chamber of Commerce Inc, United States of America Chamber of Commerce, non−party United States of America. (Whaley, Phillip) (Entered: 10/02/2012)
107 Receipt for Money Received from Ryan Whaley Coliron Shandy on behalf of All Plaintiffs in the amount of $50.00, receipt number OKW500027771 regarding 105 MOTION for Leave to Appear Pro Hac Vice of Quin M. Sorenson. (cpp) (Entered: 10/02/2012)
108 ENTRY of Appearance by Kindanne C Jones on behalf of Mark Ashton, Ann Cong−Tang, Drew Edmondson, Stan Evans, Brad Henry, Elvia Hernandez, Rita Maxwell, Keith McArtor, Teresa Rendon, Sammie Vasquez, Juanita Williams (Jones, Kindanne) (Entered: 10/03/2012)
109 ORDER granting 105 Motion to Appear Pro Hac Vice − Quin M. Sorenson. Signed by Honorable Robin J. Cauthron on 10/3/12. (lg) (Entered: 10/03/2012)
110 SCHEDULING ORDER: Bench Trial set for 3/12/2013 09:00 AM before Honorable Robin J. Cauthron. Discovery due by 1/3/2013. Motions due by 1/3/2013.. Signed by deputy clerk on 10/4/12. (lg) (Entered: 10/10/2012)
111 ENTRY of Appearance by Quin M Sorenson on behalf of All Plaintiffs (Sorenson, Quin) (Entered: 10/10/2012)
112 JOINT MOTION for Judgment and Entry of Decree for Permanent Prospective Injunctive Relief by All Parties. (Attachments: # 1 Exhibit Decree for Permanent Prospective Injunctive Relief, # 2 Exhibit Judgment)(Weitman, M) (Entered: 12/18/2012)
113 ORDER granting 112 JOINT MOTION for Judgment and Entry of Decree for Permanent Prospective Injunctive Relief by All Parties.. Signed by Honorable Robin J. Cauthron on 12/19/12. (lg) (Entered: 12/19/2012)
114 DECREE for Permanent Prospective Injunctive Relief. Signed by Honorable Robin J. Cauthron on 12/19/12. (lg) (Entered: 12/19/2012)
115 JUDGMENT. Signed by Honorable Robin J. Cauthron on 12/19/12. (lg) (Entered: 12/19/2012)

 
 Nos. 08-6127, 08-6128
____________________________________________________________________________________________
UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
____________________________________________________________________________________________
CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA et al.,
Plaintiffs/Appellees,
v.
W.A. DREW EDMONDSON et al.,
Defendants/Appellants in 08-6127,
and
THOMAS E. KEMP, JR. et al.,
Defendants/Appellants in 08-6128.
____________________________________________________________________________________________
On Appeal from the United States District Court for the Western District of Oklahoma
Case No. CIV-08-109-C (Robin J. Cauthron, C.J.)
____________________________________________________________________________________________
CONSOLIDATED BRIEF OF PLAINTIFFS/APPELLEES
____________________________________________________________________________________________

Robin S. Conrad Shane Brennan NATIONAL CHAMBER LITIGATION CENTER, INC. 1615 H Street, N.W. Washington, D.C. 20062 (202) 463-5337

Carter G. Phillips Eric A. Shumsky Robert A. Parker Brian E. Nelson SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, D.C. 20005 (202) 736-8000

ORAL ARGUMENT REQUESTED (1 Attachment in Scanned PDF format)

CORPORATE DISCLOSURE STATEMENT None of the appellees are publicly trad ed corporations. Ther e are no par ent corporations or other publicly held corpor ations that own 10% or m ore of any appellee.

TABLE OF CONTENTS
CORPORATE DISCLOSURE STATEMENT ......................................................... i TABLE OF AUTHORITIES ................................................................................... iv STATEMENT OF RELATED CASES ................................................................. xiv INTRODUCTION .....................................................................................................1 STATEMENT OF FACTS AND STATEMENT OF THE CASE ...........................4 I. FEDERAL STATUTORY AND REGULATORY BACKGROUND ...........4
A. The Enactment Of The Immigration Reform And Control Act, And The I-9 Form Process. ...................................................................4
B. The Basic Pilot Program .......................................................................8 II. THE OKLAHOMA STATUTE ....................................................................12 III. DISTRICT COURT PROCEEDINGS ..........................................................15 SUMMARY OF ARGUMENT ...............................................................................17 STANDARD OF REVIEW .....................................................................................21 ARGUMENT ...........................................................................................................22 I. APPELLANTS’ THRESHOLD JURISDICTIONAL ARGUMENTS
FAIL...............................................................................................................22 A. The Chambers Have Standing To Sue. ...............................................22 B. The Eleventh Amendment Does Not Bar This Suit............................31 C. The Tax Injunction Act Does Not Apply To Section 9. .....................35
1. Section 9 Does Not Impose A “Tax” Within The Meaning Of The TIA. ...............................................................36
2. The TIA Does Not Divest The District Court Of Jurisdiction Over The Chambers’ Request For Declaratory Relief. ....................................................................40
ii

II. THE DISTRICT COURT PROPERLY ENJOINED ENFORCEMENT OF HB 1804. ...................................................................41 A. IRCA Expressly Preempts Sections 7(B), 7(C) and 9 of HB 1804. ....................................................................................................42 B. IRCA Preempts The Field Of Employment Status Verification.........48 C. The Challenged Provisions Conflict With Congress’s Goals And Its Chosen Methods For Accomplishing Them. .........................55 D. The Remaining Requirements for a Preliminary Injunction Are Satisfied. ..............................................................................................67
CONCLUSION ........................................................................................................71 ADDENDUM
8 U.S.C. § 1324a and statutory notes Oklahoma Taxpayer and Citizen Protection Act of 2007 (HB 1804)
iii

TABLE OF AUTHORITIES
CASES
1st Westco Corp. v. Sch. Dist. of Phila., 6 F.3d 108 (3d Cir. 1993).........................................................................................34
Aetna Health Inc. v. Davila, 542 U.S. 200 (2004).................................................................................................44
Am. Petrofina Co. v. Nance, 859 F.2d 840 (10th Cir. 1988) .................................................................................36
Amalgamated Ass’n of Street Employees of Am. v. Lockridge, 403 U.S. 274 (1971)...........................................................................................49, 50
Archuleta v. Wagner, 523 F.3d 1278 (10th Cir. 2008) ...............................................................................22
Bank One, Utah v. Guttau, 190 F.3d 844 (8th Cir. 1999) .............................................................................70, 71
Barnes v. E-Sys., Inc. Grp. Hosp. Med. & Ins. Plan, 501 U.S. 1301 (1991)...............................................................................................70
Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25 (1996)...................................................................................................49
Bioganic Safety Brands, Inc. v. Ament, 174 F. Supp. 2d 1168 (D. Colo. 2001)...............................................................70, 71
Biotechnology Indus. Org. v. Dist. of Columbia, 496 F.3d 1362 (Fed. Cir. 2007)................................................................................57
Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989)...........................................................................................57, 63
Browder v. Gayle, 142 F. Supp. 707 (M.D. Ala.), aff’d, 352 U.S. 903 (1956).................................................................................................33
Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (2001).................................................................................................63
iv

Chamber of Commerce v. Brown, 128 S. Ct. 2408 (2008) .......................................................................................26, 57
Charleston & W. Carolina Ry. Co. v. Varnville Furniture Co., 237 U.S. 597 (1915).................................................................................................58
Chi. & Nw. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311 (1981)...........................................................................................56, 57
Chicanos Por La Causa, Inc. v. Napolitano, ___ F.3d ___, 2008 WL 4225536 (9th Cir. Sept. 17, 2008)........................49, 56, 65
Children’s Healthcare is a Legal Duty, Inc. v. Deters, 92 F.3d 1412 (6th Cir. 1996) ...................................................................................34
Choate v. Champion Home Builders Co., 222 F.3d 788 (10th Cir. 2000) .................................................................................61
Colacicco v. Apotex, Inc., 521 F.3d 253 (3d Cir. 2008), petition for cert. filed, U.S. Oct. 2, 2008 (No. 08-437) .....................................................................................................................58
Colclazier v. State ex rel. Okla. Indigent Def. Sys. Bd., 951 P.2d 622 (Okla. 1997).......................................................................................34
Collins Foods Int’l, Inc., v. INS, 948 F.2d 549 (9th Cir. 1991) .....................................................................................4
Craig v. Boren, 429 U.S. 190 (1976).................................................................................................25
Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363 (2000)...........................................................................................55, 58
Davis v. FEC, 128 S. Ct. 2759 (2008) .............................................................................................23
Davis v. Mineta, 302 F.3d 1104 (10th Cir. 2002) ...............................................................................41
De Canas v. Bica, 424 U.S. 351 (1976).............................................................................................1, 56
v

Edgar v. Mite Corp., 457 U.S. 624 (1982).................................................................................................63
English v. Gen. Elec. Co., 496 U.S. 72 (1990)...................................................................................................66
Finstuen v. Crutcher, 496 F.3d 1139 (10th Cir. 2007) ...............................................................................33
Gade v. Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88 (1992)...................................................................................................58
Galvan v. Press, 347 U.S. 522 (1954).................................................................................................56
Geier v. Am. Honda Motor Co., 166 F.3d 1236 (D.C. Cir. 1999), aff’d, 529 U.S. 861 (2000).................................................................................................62
Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000)......................................................................................... passim
Griffith v. Gen. Motors Corp., 303 F.3d 1276 (11th Cir. 2002) ...............................................................................65
Gutierrez v. City of Wenatchee, 662 F. Supp. 821 (E.D. Wash. 1987) .......................................................................63
Habecker v. Town of Estes Park, 518 F.3d 1217 (10th Cir. 2008) ...............................................................................22
Harvey & Harvey, Inc. v. Del. Solid Waste Auth., 600 F. Supp. 1369 (D. Del. 1985)............................................................................40
Hays v. City of Urbana, 104 F.3d 102 (7th Cir. 1997) ...................................................................................29
Hibbs v. Winn, 542 U.S. 88 (2004)...................................................................................................36
Hillsborough County v. Automated Med. Labs. Inc., 471 U.S. 707 (1985).................................................................................................42
vi

Hines v. Davidowitz, 312 U.S. 52 (1941)...................................................................................................42
Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002)...........................................................................................1, 3, 5
Housing Auth. of City of Ft. Collins v. United States, 980 F.2d 624 (10th Cir. 1992) .................................................................................48
Houston v. Moore, 18 U.S. (5 Wheat.) 1 (1820).....................................................................................56
Int’l Paper Co. v. Ouellette, 479 U.S. 481 (1987).................................................................................................58
Lee v. Bd. of Regents, 306 F. Supp. 1097 (W.D. Wis. 1969) ......................................................................33
Long v. Van de Kamp, 961 F.2d 151 (9th Cir. 1992) ...................................................................................34
Lozano v. City of Hazelton, 496 F. Supp. 2d 477 (M.D. Pa. 2007)................................................................60, 63
Luessenhop v. Clinton County, 466 F.3d 259 (2d Cir. 2006)...............................................................................39, 40
Madeira v. Affordable Hous. Found., Inc., 469 F.3d 219 (2d Cir. 2006).....................................................................................44
Marcus v. Kan. Dep’t of Revenue, 170 F.3d 1305 (10th Cir. 1999) .........................................................................36, 37
McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819).................................................................................42
McKay v. Horn, 529 F. Supp. 847 (D.N.J. 1981) ...............................................................................40
Medimmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007) ...............................................................................................28
vii

Mobil Oil Corp. v. Tully, 639 F.2d 912 (2d Cir. 1981).....................................................................................40
Nat’l Ctr. for Immigrants’ Rights, Inc. v. INS, 913 F.2d 1350 (9th Cir. 1990), rev’d on other grounds, 502 U.S. 183 (1991).............................................................................................5, 58
Nat’l Foreign Trade Council v. Natsios, 181 F.3d 38 (1st Cir. 1999), aff’d sub nom. Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363 (2000) ............................................................................57, 63
Norfolk S. Ry. v. Shanklin, 529 U.S. 344 (2000).................................................................................................49
Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207 (1986).................................................................................................64
Okla. Tax Comm’n v. Smith, 610 P.2d 794 (Okla. 1980).......................................................................................32
Okpalobi v. Foster, 244 F.3d 405 (5th Cir. 2001) ...................................................................................33
Pac. Frontier v. Pleasant Grove City, 414 F.3d 1221 (10th Cir. 2005) ...............................................................................21
PG&E v. State Energy Res. Conserv. & Dev. Comm’n, 461 U.S. 190 (1983).................................................................................................42
Philip Morris, Inc. v. Harshbarger, 122 F.3d 58 (1st Cir. 1997)......................................................................................54
Prairie Band Potawatomi Nation v. Wagnon, 476 F.3d 818 (10th Cir. 2007) .................................................................................33
Qwest Corp. v. City of Santa Fe, 380 F.3d 1258 (10th Cir. 2004) ...............................................................................22
Ramah Navaho Sch. Bd. v. Bureau of Revenue, 458 U.S. 832 (1982).................................................................................................54
Ray v. Atl. Richfield Co., 435 U.S. 151 (1978).................................................................................................67
viii

Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947).................................................................................................48
Riegel v. Medtronic, Inc., 128 S. Ct. 999 (2008) .........................................................................................44, 57
Rogers v. Larson, 563 F.2d 617 (3d Cir. 1977).....................................................................................57
RTC Commercial Assets Trust v. Phoenix Bond & Indem. Co., 169 F.3d 448 (7th Cir. 1999) .............................................................................37, 38
San Juan Cellular Tel. Co. v. Pub. Serv. Comm’n, 967 F.2d 683 (1st Cir. 1992)..............................................................................37, 38
Savage v. Jones, 225 U.S. 501 (1912).................................................................................................56
Schrier v. Univ. of Colo., 427 F.3d 1253 (10th Cir. 2005) ...............................................................................21
Shell Oil Co. v. Noel, 608 F.2d 208 (1st Cir. 1979)..............................................................................33, 34
Sipe v. Amerada Hess Corp., 689 F.2d 396 (3d Cir. 1982).....................................................................................39
Skull Valley Band of Goshute Indians v. Nielson, 376 F.3d 1223 (10th Cir. 2004) ...............................................................................49
South Carolina ex rel. Tindal v. Block, 717 F.2d 874 (4th Cir. 1983) ...................................................................................36
Sw. Bell Wireless, Inc. v. Johnson County Bd. of County Comm’rs, 199 F.3d 1185 (10th Cir. 1999) .........................................................................49, 54
State ex rel. Cartwright v. Dunbar, 618 P.2d 900 (Okla. 1980).......................................................................................35
State ex rel. Edmondson v. Cemetery Co., 122 P.3d 480 (Okla. Civ. App. 2005) ......................................................................34
ix

Takahashi v. Fish & Game Comm’n, 334 U.S. 410 (1948).................................................................................................67
Tate v. Browning-Ferris, Inc., 833 P.2d 1218 (Okla. 1992).....................................................................................32
Trans World Airlines, Inc. v. Mattox, 897 F.2d 773 (5th Cir.), cert. denied, 498 U.S. 926 (1990)...............................68, 70
United States v. Colo. Supreme Court, 87 F.3d 1161 (10th Cir. 1996) .................................................................................29
United States v. Locke, 529 U.S. 89 (2000)...................................................................................................56
Utah Licensed Beverage Ass’n v. Leavitt, 256 F.3d 1061 (10th Cir. 2001) ...............................................................................71
Villescas v. Abraham, 311 F.3d 1253 (10th Cir. 2002) ...............................................................................32
Warth v. Seldin, 422 U.S. 490 (1975)...........................................................................................23, 25
Wells v. Malloy, 510 F.2d 74 (2d Cir. 1975).......................................................................................39
Wis. Dep’t of Indus., Labor & Human Relations v. Gould, Inc., 475 U.S. 282 (1986).................................................................................................26
Wissner v. Wissner, 338 U.S. 655 (1950).................................................................................................65
Ex parte Young, 209 U.S. 123 (1908).................................................................................................31
CONSTITUTION, STATUTES, AND REGULATIONS
U.S. Const. art. VI, § 2.............................................................................................42
Immigration and Nationality Act, ch. 447, 66 Stat. 163 (1952) ................................1
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Immigration Reform and Control Act, Pub. L. No. 99-603, 100 Stat. 3359 (1986) .......................................................................................................1, 52, 53, 59
Immigration Act of 1990, Pub. L. No. 101-649, 104 Stat. 4978 ...............................7
Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Pub. L. No. 104-208, tit. IV, subtit. C, 110 Stat. 3009-546 ..................................... passim
Pub. L. No. 110-329, 122 Stat. 3574 (2008)............................................................11
6 U.S.C. § 236............................................................................................................6 6 U.S.C. § 271 et seq..................................................................................................6
8 U.S.C. § 402......................................................................................................9, 10 8 U.S.C. § 1103..........................................................................................................6 8 U.S.C. § 1151..........................................................................................................6 8 U.S.C. § 1153..........................................................................................................6 8 U.S.C. § 1182(a)(5).................................................................................................6 8 U.S.C. § 1201..........................................................................................................6 8 U.S.C. § 1324a .............................................................................................. passim 8 U.S.C. § 1324a note ..............................................................................................53 8 U.S.C. § 1324b.............................................................................................. passim
28 U.S.C. § 1341..........................................................................................19, 36, 40
Okla. Admin. Code § 580:20-1-9(b)(6) ...................................................................43
Okla. Stat. tit. 25, § 1101 et seq. ..............................................................................35 Okla. Stat. tit. 25, § 1313 ...................................................................................13, 14 Okla. Stat. tit. 25, § 1501(3).....................................................................................32 Okla. Stat. tit. 25, § 1502 ...................................................................................14, 63 Okla. Stat. tit. 25, § 1502.1 ..........................................................................14, 32, 63 Okla. Stat. tit. 25, § 1502.15(A)...............................................................................35 Okla. Stat. tit. 25, § 1505 .............................................................................14, 32, 43 Okla. Stat. tit. 25, § 1506 .............................................................................15, 32, 63 Okla. Stat. tit. 25, § 1506.6 ......................................................................................15
Okla. Stat. tit. 68, § 102 ...........................................................................................32 Okla. Stat. tit. 68, § 105(C)......................................................................................32 Okla. Stat. tit. 68, § 226 ...........................................................................................32
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Okla. Stat. tit. 68, § 1701.1 ..........................................................................15, 31, 46
Okla. Stat. tit. 74, § 18b(A)......................................................................................34
8 C.F.R. § 274a.1 ...................................................................................15, 30, 51, 60 8 C.F.R. § 274a.2 ............................................................................................. passim 8 C.F.R. § 274a.4 .....................................................................................................51 8 C.F.R. § 274a.9 .........................................................................................51, 52, 59 8 C.F.R. § 274a.10(b)...........................................................................................7, 52 8 C.F.R. § 274a.12 ...............................................................................................6, 50 8 C.F.R. pt. 1003 ........................................................................................................6
20 C.F.R. pt. 655 ........................................................................................................6 20 C.F.R. pt. 656 ........................................................................................................6
28 C.F.R. pt. 68 ..........................................................................................2, 6, 52, 59
Pilot Programs for Employment Eligibility Confirmation, 62 Fed. Reg. 48,309 (Sept. 15, 1997)......................................................................................10, 24
Expansion of the Basic Pilot Program, 69 Fed. Reg. 75,997 (Dec. 20, 2004) ..................................................................................................................10, 11
Agency Information Collection Activities, 70 Fed. Reg. 8125 (Feb. 17, 2005) ........................................................................................................................66
LEGISLATIVE HISTORY
H.R. 98, 110th Cong. (2007)....................................................................................12
H.R. 1951, 110th Cong. (2007)................................................................................12
H.R. 6633, 110th Cong. (2008)................................................................................12
S. Rep. No. 99-132 (1985) ...........................................................................2, 4, 5, 59
H.R. Conf. Rep. No. 99-1000 (1986), reprinted in 1986 U.S.C.C.A.N. 5840 ....5, 51
xii

H.R. Rep. No. 99-682(I) (1986), reprinted in 1986 U.S.C.C.A.N. 5649 ....................................................................................2, 4, 59, 61 Statement of the President Upon Signing S. 1200 (Nov. 10, 1986), reprinted in 1986 U.S.C.C.A.N. 5856-1............................................................................1, 4, 5 SCHOLARLY AUTHORITY Laurence Tribe, American Constitutional Law (3d ed. 2000) ...........................48, 49 OTHER AUTHORITIES Basic Pilot Evaluation–Summary Report (Jan. 29, 2002), available at http://www.uscis.gov/files/nativedocuments/INSBASICpilot_summ_ jan292002.pdf ............................................................................................................9 Black’s Law Dictionary (7th ed. 1999)..............................................................43, 47 Findings of the Basic Pilot Program Evaluation (June 2002), available at http://www.uscis.gov/files/article/4[1].a%20C_I.pdf. ............................................... 9 GAO, Immigration Reform: Employer Sanctions and the Question of Discrimination (Report to Congress) (Mar. 29, 1990) ..............................................9 Webster’s Third New International Dictionary (1971) ...........................................43
xiii

STATEMENT OF RELATED CASES Two related appeals (Nos. 08-6127 and 08-6128) challenge the same district court order. There are no prior appeals or other related appeals.
xiv

INTRODUCTION Enacted in 1986, the federal Immigration Reform and Control Act (IRCA), represented a sea change in our Nation’s re gulation of the em ployment of aliens. Pub. L. No. 99-603, 100 Stat. 3359 (1986). Prior t o IRCA it could fairly be said that federal law (in the form of the th en-controlling Immigration and Nationality Act, ch. 447, 66 Stat. 163 (1952)) had only “a peripheral concern with employment of illegal entrants.” De Canas v. Bica, 424 U.S. 351, 360 (1976). IRCA radically changed this. It created a “compreh ensive scheme prohibiting the employment of illegal aliens in the United States” that “forcefully made co mbating the em ployment of illegal aliens central to the policy of imm igration law.” Hoffman Plastic Compounds, Inc. v. NLRB , 535 U.S. 137, 147 (2002) (alt erations and quotati on marks omitted). President Reagan hailed th e law as “the m ost comprehensive reform of our imm igration laws since 1952,” and “the product of one of the longest and most difficult legislative undertakings in recent memory.” Statem ent of the President Upon Signing S. 1200, Nov. 10, 1986, reprinted in 1986 U.S.C.C.A.N. 5856-1, -4. The statute broadly and deeply regulat es the empl oyment of aliens. Most directly relevant here, it created the I-9 Form process, “an extensive ‘em ployment verification system’ … [that] is critical to the IRCA regi me.” Hoffman Plastic, 535 U.S. at 147-48. This system establishe s the exclusive requirements for verify-

ing the work eligibility of every em ployee in the United States, see 8 U.S.C. § 1324a(b); 8 C.F.R. § 274a.2(b), including a federal system for determining em ployer violations and assessing penalties, see 8 U.S.C. § 1324a(a)(1)-(3), (e); 28 C.F.R. pt. 68. IRCA, however, did not singlemindedly target undocumented workers at all costs; it also balanced other, sometimes competing concerns. So at the same time it regulated the employm ent of aliens, it was m indful of t he burdens those measures would im pose on busine sses. Congress also recognized that this focus on aliens could lead to discrim ination, which IRCA instituted measures to prevent. H.R. Rep. No. 99-682(I), at 56 (1986), reprinted in 1986 U.S.C.C.A.N. 5649, 5660; S. Rep. No. 99-132, at 8-9 (1985); see 8 U.S.C. § 1324b.
Having regulated the field of alien em ployment with such specificity, and in a way that carefully balan ced Congress’s m ultiple policy goals, IRCA leaves no room for states to regulate the em ployment of aliens. It expressly preem pts state and local laws that im pose civil or cr iminal sanctions on em ployers of illegal aliens, 8 U.S.C. § 1324a(h)(2), and it likewis e preempts state statutes that conflict with Congress’s chosen m ethods, or that reset the balance of objectives Congress so carefully struck. That, however, is precisely what Oklahoma sought to do when it enacted the Taxpayer and Citizen Protec tion Act of 2007 (t he “Act” or “HB
2

1804”). A108-124.1 The Act would im pose sanctions on employers, in clear violation of IRCA’s express preemption provision; it would intrude into the domain of alien employment that IRCA “comprehensive[ly]” regulated, Hoffman Plastic, 535 U.S. at 147; and, perhaps m ost seriously, it woul d impose requirements that are flatly at odds with t he ones chosen by Congress. Specifically, it would lim it the status verification options enacted by Congr ess, mandating use of an experimental form of verification that Congress expr essly made voluntary in place of the I-9 Form process that Congress requires ever y employer to use; it would require em ployment verification for non-em ployees, which federal law does not authorize; and it would im pose civil liability on em ployers whom the state deem s to have employed illegal aliens (knowingly or not). These provisions are preem pted by federal law, as the district court properly held.
1 References to the appendix filed by the Attorney General and Human Rights Commissioners in No. 08-6127 are de nominated “A___.” The Tax Commissioners’ Appendix in No. 08-6128 is denoted “TA___.”
3

STATEMENT OF FACTS AND STATEMENT OF THE CASE To understand IRCA’s preem ptive force, and the defects inherent in HB 1804, it is necessary first to consider the sweeping federal regime that governs here, and the particular provisions of the Oklahoma statute that are preempted. I. FEDERAL STATUTORY AND REGULATORY BACKGROUND A. The Enactment Of The I mmigration Reform And Control Act,
And The I-9 Form Process. Beginning in 1971, and every y ear thereafter, Congress conducted “[e]xtensive and comprehensive hearings” on prohibiting the em ployment of illegal aliens. See, e.g., H.R. Rep. No. 99-682(I), at 52-56, 1986 U.S.C.C.A.N. at 5656-60; S. Rep. No. 99-132, at 18-26. These efforts produced a volum inous record detailing the competing considerations that arise from the employment of illegal workers, and ultimately led to a m onumental effort of legislative compromise. Statement of the President, 1986 U.S.C.C.A .N. at 5856-1, -4. Congress sought t o balance a num ber of goals, and crafted a co mprehensive federal verification scheme to acco mmodate them. Congress intended that IRCA would deter illegal immigration, but not at all costs; it also sought a system that was “the least disruptive to the American businessman and … also minimize[s] the possibility of employment discrimination.” H.R. Rep. No. 99-682(I), at 56, 1986 U.S.C.C.A.N. at 5660; S. Rep. No. 99-132, at 8-9; see Collins Foods Int’l, Inc., v. INS , 948 F.2d 549, 554 (9th Cir. 1991) (“the legislative history of section 1324a indicates that
4

Congress intended to minimize the burden and the risk placed on the em ployer in the verification process”).2 The statute thus represents “a carefully crafted political compromise which at every level balances specifically chosen measures discouraging illegal employment with measures to protect those who might be adversely affected.” Nat’l Ctr. for Immigrants’ Rights, Inc. v. INS , 913 F.2d 1350, 1366 (9th Cir. 1990), rev’d on other grounds, 502 U.S. 183 (1991).
IRCA and its im plementing regulations re flect this balance. Of particular relevance here is the I-9 Fo rm process, the “keystone and major elemen t” of the statute. Statement of the Presi dent, 1986 U.S.C.C.A.N. at 5856-1; see Hoffman Plastic, 535 U.S. at 147-48. The st atute makes it unlawful “to hire, or to recruit or refer for a fee, for employment in the United States an alien knowing the alien is an unauthorized alien.” 8 U.S.C. § 1324a(a)(1)(A). Em ployers discharge their responsibilities under this section by comp leting an I-9 Form and inspecting documents that establish the em ployee’s identity and eligibility to work. 8 C.F.R. § 274a.2(b); A126-29 (I-9 Form ). An employer must accept any docum ent on a list promulgated by the federal governm ent that “reasonably appears on its face to be genuine.” Employees are under no obligation to present any parti cular docu-
2 Congress expressed particular concern th at the law not impose excessive burdens on small businesses or for i solated violations. See, e.g., H.R. Conf. Rep. No. 991000, at 86 (1986), reprinted in 1986 U.S.C.C.A.N. 5840, 5841; S. Rep. No. 99132 at 32.
5

ment, nor may employers ask them to do so. 8 U.S.C. § 1324a(b)(1)(A); 8 C.F.R. § 274a.2(b)(1)(ii)(A), (v). The law creates a substantial safe ha rbor for employers who “compl[y] in good fai th” with th e I-9 Form ’s requirements. 8 U.S.C. § 1324a(a)(3). Congress expre ssly intended that this system be enforced “uniformly” throughout the United States. IRCA § 115, 100 Stat. at 3384.
Federal law cr eates a detail ed array of allowances and exceptions for i ndividuals wishing to w ork in the United States, see, e.g., 8 C.F.R. § 274a.12, and it vests federal agenci es with ex clusive authority to ad minister these req uirements, including components of th e Departments of State, Labor, Homeland Security (DHS), and Justice.3 Determining whether an employer knowingly hired an illegal worker is committed to a specialized fed eral administrative review system, which affords employers the right to an adversarial hearing be fore a federal Adm inistrative Law Judge at w hich the government bears the burden of proof. Every aspect of this procedure is spelled out in le ngthy and de tailed statutory and regulatory provisions. See 8 U.S.C. § 1324a(e); 28 C.F.R. pt. 68. For em ployers who a re found to have knowingly employed an illegal alien, IRCA and its regulations specify civil and crim inal sanctions, including graduated monetary penalties, civil injunctions against repeat offenders, and cr iminal fines of up to $3,000 per illegal
3 See, e.g., 6 U.S.C. §§ 236, 271 et seq.; 8 U.S.C. §§ 1103(a), 1103(g), 1151, 1153, 1182(a)(5), 1201; 8 C.F.R. § 274a.12; id. pt. 1003; 20 C.F.R. pts. 655, 656.
6

worker and six m onths in prison. 8 U.S.C. § 1324a(e)(4), (f); 8 C.F.R. § 274a.10(b)(1)(ii)(A). The ALJ’s decision is subject to adm inistrative appellate review, then federal judicial review. 8 U.S.C. § 1324a(e)(7), (8).
Congress has more than once revisited the subject of document-based verification in order to further re fine the federal system and best effectuate its goals. Thus, in 1990, Congress proh ibited employers from requesting m ore or different documents than those the em ployee chooses to present. See Immigration Act of 1990, Pub. L. No. 101-649, § 535, 104 St at. 4978, 5055 (codified at 8 U.S. C. § 1324b(a)(6)). This was done to prevent such requests from being m ade out of discriminatory motives. In 1996, Congress refined this provision, specifying that such conduct would be treated as discri minatory only if it was done “for the purpose or with the int ent of discrim inating.” See Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIR A), Pub. L. No. 104-208, tit. IV, subtit. C, § 421, 110 Stat. 3009-546, 3009-670. There have been other refine ments as well. See, e.g., Immigration Act of 1990, Pub. L. No. 101-649, 104 Stat. 4978 (restructuring the system for admitting legal immigrants, and adding penalties related to fraudulent documents).
Having carefully crafted these provisions to balance m ultiple considerations and to calibrate its chosen enforcemen t mechanisms, Con gress went to great lengths to preserve its author ity in this field. To th at end, IRCA expressly pre-
7

empts “any State or local law im posing civil or crim inal sanctions (other than through licensing 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). Even within the federal government, changes to the congressional design require significant study and advance warning. Specifically, IRCA requires the President t o monitor the effectiveness of the verification syst em, and to transm it to the House and Senate Judiciary Committees detailed written re ports of proposed changes well in advance of the effective date. Id. § 1324a(d). Any change in the documents used to prove work authorization status is a “maj or change” that requ ires two years’ written notice to Congress. Id. § 1324a(d)(3)(A)(iii), (D)(i).
B. The Basic Pilot Program In 1996, Congress augmented IRCA by authorizing “Pilot Programs for Employment Eligibility Confirmation.” IIRIRA, tit. IV, subtit. A, 110 Stat. at 3009655.4 IIRIRA authorized thr ee pilot programs, only one of whi ch—the “Basic Pilot Program” (sometimes called “E-Verify”5)—exists today. See id. §§ 403(a), (b), (c). This program was designed “to determine, on a test basis, whether pilot verifi-
4 Sections 401-405 of IIRIRA, which govern pilot programs, are codified in a note appended to 8 U.S.C. § 1324a. 5 Federal statutes and Oklahoma’s Act refer to this program as the Basic Pilot Program, and so we use that term here. In 2007, the Departm ent of Homeland Security began using the nam e “E-Verify” as part of a rebr anding initiative to broade n the program’s appeal.
8

cation procedures can improve on the existing I-9 system by reducing false claim s
to U.S. citizenship and document fraud, disc rimination, violations of civil liberties and privacy, and employer burden.”6 The desire to test additional verification sys-
tems was driven in part by concern that even the carefully considered sanctions re-
gime in IRCA “had resulted i n a widespread pattern of disc rimination against au-
thorized workers,” which was one of th e problems Congress sought to address in the Immigration Act of 1990. 7 At the same tim e, Congress was concerned that
new verification systems would themselves give rise to discrimination and impose undue burdens on employers.8
Accordingly, Congress created Basic Pilot and expressly m ade it voluntary
and experimental, as its nam e suggests. Section 402 of IIRIRA is entitled “Volun-
tary Election to Participate in a Pilot Prog ram” (emphasis added). The statute au -
thorizes employers to “elect to participate in that pilot program.” Id. § 402(a) (em-
phasis added); id. § 402(c)(2)(A) (participating employer is an “electing person”).
The federal government “may not require any person or other entity to participate,”
6 Basic Pilot Evaluation–Sum mary Report v, 4 (Jan. 29, 2002), available at http://www.uscis.gov/files/nativedocuments/INSBASICpilot_summ_jan292002 .pdf. 7 Findings of the Basic Pilot Program Evaluation 12 (June 2002), available at http://www.uscis.gov/files/article/4[1].a%20C_I.pdf; see also GAO, Immigration Reform: Employer Sanctions and the Question of Discrimination (Report to Congress) 3, 5-9, 37-39 (March 29, 1990). 8 Findings of the Basic Pilot Program Evaluation, supra, at 21-24.
9

and the Secret ary of Homeland Security is required to “widely publicize … th e voluntary nature of the pilot programs.” Id. § 402(a), (d)(2) (emphases added); accord id. § 402(d)(3)(A). In contrast, Congress made Basic Pilot mandatory for certain federal-government entities. Id. § 402(e)(1), (2).
Basic Pilot is volunt ary for good reason: it is error-prone and im poses substantial burdens on employers. An employer wishing to use Basic Pilot enters into a Memorandum of Understanding (MOU) with the federal governm ent, which allows the employer to access an Internet database of Social Security num bers thought to be valid. A 131-39 (MOU); Expansion of t he Basic Pilot Program, 69 Fed. Reg. 75,997, 75,999 (Dec. 20, 2004). This database provides only a “tentative nonconfirmation[]” of work authorization status, A172-73, because f ederal records often are inaccurate, as the gover nment itself has recognized. See Pilot Programs for Employment Eligibility Confirmation, 62 Fed. Reg. 48,309, 48,312 (Sept. 15, 1997) (“Pilot Programs”); A134 (MOU ¶¶ II.C.9-10), A172-73.
A report recently commissioned by DHS recognized that “improvements are needed … if the Web Basic Pilot becomes a mandated national pr ogram.” This is because “the database used for verification is still not sufficiently up to date to meet the IIRIRA requirement for accurate verification.” A201, 269-70. The study found an error rate am ong naturalized citizens of almost 10%, A205-06, 270, and that a foreign-born, work-authorized individual was 30 times more likely to receive
10

an erroneous tentative nonconfi rmation than a U.S.-born individual. A205, 311. These problems subject foreign-born individuals, including naturalized citizens, to discrimination and “potential harm .” A205. Moreover, receiving a tentative nonconfirmation imposes substantial burdens on em ployers and employees. See infra at 24-25. Fixing these problem s, the study found, “will take considerable tim e.” A206, 363.
In addition, m any employers—particularly small businesses and those that recently started using the program—hav e complained of serious problems . These include, among other things, unavailability of the system, the cost of tra ining staff, and financial losses caused by the program’s prohibition against taking adverse actions against an employee while he contes ts a tentative nonconfirm ation. A202, 277, 279, 280-81, 283-93, 315; see infra at 24-25. Unsurprisingly, “most U.S. employers have not volunteered to use the p ilot program,” and expansion of the program has led to conti nuing “downward trends in [employer] satisfaction and com pliance.” A201, 208, 356.
Basic Pilot has always been authorized on a temporary basis. See Expansion of the Basic Pilot Program , 69 Fed. Reg. at 75,998. Congress recently approved a three-month extension until March 9, 2009. Pub. L. No. 110- 329 §§ 106(3), 143, 122 Stat. 3574, 3575, 3580 (2008). Congress, however, has repeatedly rejected proposals to create a mandatory electronic verification system, e.g., H.R. 98, 110th
11

Cong., § 5(a) (2007); H.R. 1951, 110th C ong., § 3 (2007), and has not acted on a bill that would extend the Basic Pilot Pr ogram’s temporary authorization for five years, H.R. 6633, 110th Cong. (2008). And even that bill would reaffirm that Basic Pilot is voluntary and experimental, and would require further study of the ongoing problems caused by erroneous nonc onfirmations and burdens on small businesses. Id. §§ 4, 5. II. THE OKLAHOMA STATUTE
In 2007, Oklahoma enacted HB 1804, the “Oklahom a Taxpayer and Citizen Protection Act.” The Act is rooted in th e Oklahoma legislature’s fundamental disagreement with Congress’s weighing of objectives in IRCA, and its conclusion that the I-9 Form process has failed to achie ve one of those objectives—stemm ing the flow of illegal immigration—that the Oklahoma legislature would elevate above all others. The Act states this purpos e expressly. HB 1804 § 2 (A110); see A698 (“House Bill 1804 was approved becau se of the complete failure of the federal government to enforce existing immigration laws…. Something had to be done.”). In the district court, Appellants9 repeatedly and forthrightly admitted that the law’s
9 All appel lants were defendant s below. Attorney General Edmondson and t he Oklahoma Human Rights Commissioners have filed a brief in No. 08-6127 (“AG Br.”), and the Oklahoma Tax Commissioners noticed a separate appeal and filed a brief (“Tax Br.”) in No. 08-6128. We refe r collectively to the appellants in 086127 as t he “Attorney General,” and the appellants in bot h appeals as “Appellants,” unless otherwise noted.
12

purpose is to “elim inate the reasons the ille gal aliens seek to co me to this state … by discouraging employers from hiring illegal aliens.” A518; AG Br. 3 (“The Legislature’s purpose in passing H B 1804 was to protect Oklahoma residents from the adverse effects of illegal immigration.”); A533 (same). The Act’s drafters likewise made clear that it is ai med squarely at the employer verification regime; it is designed to “take a stand … by targeting employers” and “enacts employer penalties” to force compliance with more stringent verification requirements than those provided in federal law. A695-99. That purpose is manifest in the three provisions of the Act at issue here:
Section 7(B)(2) (codified at 25 Okla. Stat. § 1313(B)(2)) requires every business that has a contract or subcontract with any “public em ployer” (including state or local governments, agencies, cour ts, schools, and poli ce and fire departments, among others) to register and participate in the State’s “Status Verification System.” This effectively requires busin esses to use the Basic Pilot Program because the only other verification options approved by HB 1804 are (1) an equivalent future program created by the federal government (which does not exist); (2) a “third-party” system that is at least as reli able as Basic Pilot (which also does not exist); or (3) the “Social Security Num ber Verification Service” (SSNVS ), a data-
Oklahoma Governor Brad Henry also is a defendant. Curiously, he has not appealed the decision below.
13

base created by the Social Security Ad ministration (SSA) for use in year-end financial reporting (the use of which fed eral law forbids for verifying immigration status, see infra at 66 n.27). A114-15, 141, 143- 44. Any em ployer who uses the federal I-9 Form process, and declines to use Oklahoma’s Status Verification System, is automatically and permanently de barred from public contracts in the State of Oklahoma. A115.
Section 7(C) (codified at 25 Okla. Stat. § 1313(C)) subjects em ployers who do not participate in the Status Verificat ion System to the Oklahoma regulatory apparatus that otherwise is di rected against acts of discrim ination. Specifically, § 7(C) labels it a “discriminatory practice” whenever an employer “discharge[s] an employee working in Oklahoma who is a Un ited States citizen or permanent resident alien while retaining an em ployee who the em ploying entity knows, or reasonably should have known, is an unauthorized alien.” A116; compare 8 U.S.C. § 1324a(a)(1)(A) (prohibiting only “knowing” conduct). The statute thus subjects such employers to t he same broad panopl y of adm inistrative and judi cial procedures and sanctions levied agai nst those who discriminate on the basis of race or gender, including investig ation by the Oklahoma Human Rights Comm ission (HRC), see 25 Okla. Stat. § 1502; temporary injunctive relief sought by the HRC and imposed by a c ourt, id. § 1502.1; c ease-and-desist orders and affi rmative relief, including reinstatement, backpay, costs and attorney’s fees, id. § 1505(B), (C),
14

to be enforced by the HRC in court, id. § 1506(a)—and even ultimately a judicial action filed by the state Attorney General, id. § 1506.6.
Section 9 (codified at 68 Okla. Stat. § 2385.32) addresses the status verifi cation of em ployees through hi ghly unorthodox withholding and penalty mechanisms. In contrast t o federal law, which expressly excludes non-em ployees (including independent contractors) from IRCA’s verification requirements, see 8 C.F.R. § 274a.1(f), (j), Section 9 requires all businesses to verify the work authorization status of individual independent contr actors. A119. A busi ness that fails to do so must withhold from the consideration due the contractor an am ount equal to “the top marginal income tax rate” allowed by Oklahoma law, or else itself be subject to a penalty in the same am ount. Id. This requirement is a radical departure from normal practice under Oklahoma law; typi cally, each contracting party is responsible for its own taxes, and the law does not im pose “any liability or responsibility for any unpaid taxes, wages, or penalties … upon any other contractor.” 68 Okla. Stat. § 1701.1(A), (C). III. DISTRICT COURT PROCEEDINGS
Appellees (plaintiffs below) brought suit seeking a d eclaration that sections 7(B), 7(C) and 9 of the Act are preempte d by federal law an d to enjoin their enforcement. See Complaint (A24-53). Plaintiff-A ppellees are national, state, an d local chambers of co mmerce and trade gr oups that represent thousands of busi -
15

nesses of all sizes in Oklahoma, em ploying hundreds of thousa nds of individuals (collectively, the “Chambers”). Appellants opposed the m otion for a prelim inary injunction (A527-67; TA42-45), and moved to dismiss (A487-525; TA37-40).
The district court (Cauthron, C.J.) denied the m otions to dismiss and preliminarily enjoined enforcem ent of the challenged provi sions. It found that the Chambers had standing, noting they ha d “provided evidence that their mem bers intend to do business with the State and th at using one of t he status verification systems will cause the member[s] harm” under Section 7(B)(2), and that they “will suffer a credible threat of injury from enforcement of” the o ther challenged sections. A774. The court held that the Eleventh Amendment is not implicated in this case because the “Complaint clearly seeks only prospective relief” and “[e]ach of the Defendants plays at least some role in enforcement of the challen ged provisions.” A775-76, 787. And i t rejected the argument that the Tax Injunction Act bars federal court review of Section 9: Because it was “undisputed that the underlying purpose” of Section 9 is “to regulat e behavior, not raise revenue,” Section 9 does not come within the ambit of the TIA. A772-73.
Turning to the preliminary injunction, the district court held that the Ch ambers were substant ially likely to preva il. Congress’s legisl ative and regulatory scheme governing the em ployment of aliens is, as the court explained, “‘com prehensive [and] central to the pol icy of immigration law.’” A777-78. HB 1804 op-
16

erates in an area “typically reserved for congressional action” and, after examining “the facts and law [that] exist today,” the court concl uded that each of the challenged provisions is likely pr eempted. A779-80, 782-83. It also hel d that the Chambers would be irrepara bly harmed absent an injunction, because t hey and their members would be “forced to com ply with a law that may ultimately be found to be preempted,” and the record established that the Act imposes significant costs that “no method of com pensation can rem edy.” A781. These harm s outweigh any injury to the state defendant s “caused by the brief delay until the matter can be finally resolved,” and the court c oncluded that “the need for uniform ity among the States” favored an injunction. A782.
SUMMARY OF ARGUMENT 1. Appellants’ three jurisdictional objections are foreclosed by governing law. First, they assert the Cham bers do not have standing to sue. This argument ignores the allegations of the Complaint and the numer ous declarations and supporting documents submitted to the district court. Each of the challen ged provisions of HB 1804 would cause real and substant ial injury to the Cham bers and their members. The numerous flaws inhe rent in the Basic Pilot Program impose costs. Switching t o Basic Pilot im poses costs. Being debarre d from government contracts imposes potentially debilitating co sts. Being subjected to a regime of antidiscrimination enforcement unquestionably imposes real harm s, as does the
17

imposition of non-proportional withholding requirements a nd penalties. The fact that certain of these provisions have not yet been enforced in no way undercuts the Chambers’ standing to sue; it is comm onplace that pre-enfo rcement review is available to challenge putative governm ent regulation, which is certainly the case when preemption is at issue.
Appellants also assert Eleventh Amendment immunity. The Elev enth Amendment, however, does n ot foreclose claims for prospective injunc tive or declaratory relief against state officials, and that is the only relief sought he re, as Appellants concede. Their alter nate argument—that the state officials are not sufficiently connected with the challenged provisions to render them amenable to suit— is insupportable. Governor Henry has no t appealed the i njunction, and so he ha s forfeited this argument and must remain a defendant for all the challenged sections of HB 1804. The Human Rights Commissione rs are concededly proper parties as to Section 7(C), and the Tax Comm issioners are concededl y proper parties as to Section 9. And the Attorney General—the only party who contests his status as a defendant for each of the challenged prov isions—has specific responsibilities under state law to enforce Sectio ns 7(B)(2) and 7(C). This is m ore than sufficient to render him amenable to suit.
Finally, the Tax Injunction Act presents no barrier to challenging Section 9. The TIA prevents courts from enjoining “the assessment, levy or collection of any
18

tax under State law.” 28 U.S.C. § 1341. A long line of cases, however, holds that when, as here, the state statute is regulator y in nature, it is not a “tax” within the meaning of the TIA regardless what term inology the state may choose. Section 9 is regulatory; unlike a typical tax provision, it is not a broad revenue-raising m easure but rather would im pose onerous withholding requirements and penalties on a narrow class of businesses for overtly re gulatory purposes. Indeed, Appellants themselves have argued, just as HB 1804’ s authors have asserted, that the purpose of Section 9 (and the Oklahoma statute ge nerally) is to pre vent the hiring of undocumented workers and cause them to leav e Oklahoma. This purpose is quintessentially regulatory, and thus it is outside the scope of the TIA.
2. Sections 7(B), 7(C) and 9 are preempted by federal law. First, they are expressly preempted. IRCA expressly pr eempts “any State or local law imposing civil or criminal sanctions … upon t hose who employ, or recruit or refer for a fee for employment, unauthorized aliens.” 8 U.S.C. § 1324a(h)(2). This provision plainly applies to Section 7(C), which im poses regulatory and administrative penalties for employing an undocumented worker and discharging a lawful one. Section 1324a(h)(2) also expressly preem pts Sections 7(B)(2) and 9, both of which seek to regulate the em ployment of una uthorized aliens th rough verification requirements, and wo uld levy penalties agains t employers on this basis. Section 7(B)(2) would do this by im posing the massive sanction of debarment on employ-
19

ers who use the I-9 system required by C ongress instead of the state’s preferred “Status Verification System,” on the theory that employers will otherwise “employ illegal aliens.” A545. Section 9 likewise would add a verification requirement that is excluded by federal law (verifyi ng the status of independent contractors), again on the theory that this form of verification is essential to prevent the hiring of undocumented workers—and then would im pose penal withholding requirements, and ultimately direct penalties, upon busin esses who do not do so. In each case, the provision’s purpose is to target employers perceived to be hiring undocumented workers and to impose sanctions upon them. This is precisely what § 1324a(h)(2) expressly preempts.
Second, these provisions are preempted b ecause they seek to regulate employment status verification, a field that Congress has exclusively and pervasively occupied. Congress perceived a nationa l problem, and implemented a comprehensive federal solution. Federal law regulates every aspect of this subject, and does so in extraordinary detail. It sim ply leaves no room for states to im pose separate verification systems and penalties on employers.
Third, the challenged provisi ons are pree mpted because they conflict with Congress’s goals and its caref ully selected methods of im plementing them. In enacting IRCA, Congress quite cl early balanced at least four objectives: creating uniformity in immigration enforcement, regulating the hiring of aliens, m inimizing
20

burdens on business, and preventing discri mination. To that end, Congress acted in measured fashion, esch ewing extreme solutions that, for instance, m ight have done more to limit the hiring of illegal aliens, but only by imposing greater burdens on employers and resulting i n greater disc rimination. Under circum stances like these, where Congress has not merely set minimum standards but rather has chosen the optimal level o f regulation, state en actments that seek to em ploy different methods—even to accom plish Congress’s stated goals—are preem pted. Here, Oklahoma has done m uch more than that. Not only has it employed methods that differ markedly from those chosen by Congress—imposing different and greater sanctions, requiring t he use of Basic Pilot, requiring status verification for independent contractors, etc.—but it has funda mentally reweighed the interests that Congress calibrated. Far from seeking to limit burdens on business, or to prevent discrimination, HB 1804 refle cts a singl eminded effort t o root out una uthorized workers at all costs. This is not what Congress intended, and the conflicting Oklahoma enactment therefore is preempted.
STANDARD OF REVIEW This Court reviews a preli minary injunction order for abuse of discretion. Pac. Frontier v. Pleasant Grove City, 414 F.3d 1221, 1226 (10th Cir. 2005). “‘The standard for abuse of discretion is hi gh,’” requiring “‘an arbitrary, capricious, whimsical, or manifestly unreasonable judgment.’” Schrier v. Univ. of Colo. , 427
21

F.3d 1253, 1258 (10th Cir. 2005). It reviews questions of law de novo and factual
determinations for clear error. Id. In reviewing the denial of a m otion to dismiss,
the allegations in the com plaint must be accepted as true and all factual inferences
are drawn in favor of the appellees. Archuleta v. Wagner, 523 F.3d 1278, 1282-83
(10th Cir. 2008).
ARGUMENT I. APPELLANTS’ THRESHOLD JU RISDICTIONAL ARGUMENTS
FAIL.10
A. The Chambers Have Standing To Sue.
The test for standing is fam iliar. “[T]he plaintiff must have suffered an ‘in-
jury in fact’—an invasion of a legally prot ected interest which is (a) concrete and
particularized, and (b) actual or imm inent, not conjectural or hypot hetical.” Ha-
becker v. Town of Estes Park , 518 F.3d 1217, 1223 (10th Cir. 2008). The injury
must be “fairly traceable to the challenged action of the defendant,” and “it must be
likely … that the injury will be redressed by a favorable decision.” Id. at 1224.
10 In addition to the three arguments addr essed in the text, the Tax Co mmissioners raise a fo urth argument that merits only br ief discussion. They ass ert that the Chambers “bring their suit as a civil rights suit under 42 U .S.C. § 1983,” which they say does not confer a cause of action. Tax Br. 9-10. On the contrary, each claim arises under the Supremacy Clause, see A46-51, and “[a] federal statutory right or ri ght of action is not required wh ere a par ty seeks to enjoin the enforcement of a regulation on the grounds that the local ordinance is preem pted by federal law. A party may bring a claim under the Supremacy Clause that a local enactment is preempted even if the federal law at issue does not creat e a private right of action.” Qwest Corp. v. City of Santa Fe, 380 F.3d 1258, 1266 (10th Cir. 2004).
22

Importantly, “the injury required for standing need not be actualized. A party facing prospective injury has standing t o sue where the threatened injury is real, im mediate, and direct.” Davis v. FEC, 128 S. Ct. 2759, 2769 (2008). The Cham bers have sued in their capacity as associations, A26-28, 36-37 (some also have sued in their own capacity as em ployers, A37-38), and an association ha s standing to sue on behalf of its members when it can be “supposed that the remedy, if granted, will inure to the benefit of those members of the association actually injured.” Warth v. Seldin, 422 U.S. 490, 515 (1975).11
This test is satisfied here because the Chambers and their memb ers are subject to, and harmed by, the challenged provisions of HB 1804. The Chambers have submitted multiple sworn declarations from each of the plaintiff organizations and from their members. These declarations , which are accom panied by hundreds of pages of supporti ng documentation, explain in detail the harms they and their members would suffer if the challenged provisions are enforced. A433-86.
1. Section 7(B)(2). As employers with public contracts, multiple Appellees will be harmed by Section (7)(B)(2). Un der that provision, an em ployer who uses the federal I-9 Form process instead of sw itching to the state’s Status Verificatio n System will be permanently debarred from public contracts. Debarment would se-
11 Although the Attorney Ge neral couches his standing argument in terms of associational standing, see AG Br. 25-27, he does not make any argument related to the associational component of the test.
23

riously harm the Chambers and their me mbers. A434-35, 4 42, 449-50, 454, 45859, 462-63, 467-68, 476; A38-39 (Compl. ¶¶ 45-49).
Adopting the Status Verification System also entails substantial harms. That system effectively requires employers to use the Basic Pilot Program: the unrebutted record establishes that of the four verification options approved by HB 1804, two do not exist, and federa l law forbids using the third option (SSNVS) for the purpose Oklahoma suggests. A143-44; see also A434, 442, 449, 458, 467, 476, 484; infra at 66 n.27. As we set forth in detail above (at 8-12), Basic Pilot is errorprone and inefficient, and burdens em ployers even when it works properly. For example, when a prospective employee’s Social Security Number does not register in the Basic Pilot database, the em ployer receives a “tentative nonconfi rmation.” Upon such a result, the em ployer must suspend action on the em ployee for 8-10 work days to allow the employee to challenge the result, and “may not terminate or take adverse action against the em ployee based upon his or he r employment eligibility status.” Pilot Programs, 62 Fed. Reg. at 48, 312; A134 (MOU ¶ II.C.10); A172-73. The em ployer also m ust suspend action during any subsequent period “while SSA or [DHS] is processing th e verification request.” A134 (MOU ¶ II.C.10). According to a revi ew of Basic Pilot commissioned by DHS itself, the average time to resolve such a challenge ranges from 19 to 74 days. A291-92.
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Here, the Chambers submitted detailed declarations, containing concrete ex-
amples from the Chambers’ and their members’ businesses, that Basic Pilot woul d
impose costs that the I-9 Form process does not. These include:
• an artificially restricted pool of lega l workers, particularly am ong naturalized citizens and work-authorized non- citizens, which will increase recruitment costs and harm employers’ ability to fill their workforces in Oklahoma’s tight labor market;
• sunk costs in training new employees during periods where their work authorization status is uncertain but they cannot be terminated;
• unrecoverable costs due to the diversion of employee time and attention during periods where tentative nonconfirmations are in dispute; and
• significant costs to employers to revamp their verification procedures (which are designed to comply with t he federal I-9 Form process that has been in place for decades) to co mply with the new, unconstitutional requirements of the Act.
A434-36, 442-43, 449-50, 453-54, 458-60, 462-63, 467-68, 474-76, 484-85. These
harms more than suffice to establish the minimal requirement of injury in fact. See
Craig v. Boren, 429 U.S. 190, 194 (1976); Warth, 422 U.S. at 523-25.
The Attorney General responds that “no Plaintiff has claimed or alleged that
they intend to enter into a contract with the Oklahom a Attorney General’s Office
or the Oklahoma Human Rights Commission.” AG Br. 29-30. This is beside th e
point; the Cham bers and their mem bers have contracts with governm ent entities,
A38 (Compl. ¶ 45), 434, 442, 450, 458, 462-63, 4 67, 474, and relie f is available
against the Attorney Gen eral because of his responsibilities in enforcing Section
25

7(B)(2). We addres s this issue in great er detail below, in the context of Appellants’ substantially similar Eleventh Amendment argument. Infra at 35.
Second, the Attorney General argues that the Chambers do not have standing because they “are not required to do busi ness with the State.” AG Br. 30. “That is,” he asserts, “the freedom of contract.” Id. Whether this is m eant to invoke Lochner, the Contract Clause of the Constituti on, or sim ply to tell the Cham bers and their members to take their business elsewhere, the fact remains (and the record reflects) that if the Chambers are debarred from entering into public contracts because of Section 7(B)(2), they will be seriously injured. Supra at 23-34. As the district court recognized, whatever freedom Oklahoma may have to “set guidelines controlling the eligibility for contracts,” it “cannot create or impose guidelines that conflict with the Constitution or federal law.” A780. This is clearly correct. Chamber of Commerce v. Brown, 128 S. Ct. 2408, 2417 (2008) (“i t is not ‘permissible’ for a State to use its spending power to advance an interest that ... frustrates the comprehensive federal scheme established by th[e] Act”); Wis. Dep’t of Indus., Labor & Human Relations v. Gould, Inc. , 475 U.S. 282, 287 (1986) (rejecting claim that state law “escapes pre-emption because it is an exercise of the State’s spending power rather than its regulatory power”).12
12 The Attorney General also suggests that certain “additional ‘business costs’” imposed by Section 7(B)(2) “can be passed on to the State.” AG Br. 30. Regardles s whether the Attorney General has authorit y to volunteer every public employer to
26

2. Section 7(C). The Chambers likewise would be harmed by Section 7(C). Unlike federal law, which penaliz es only “knowing” actions by e mployers, this cause of action would im pose liability under a vague “reas onably should have known” standard. A116. The statute crea tes a safe harbor for em ployers who use the “Status Verification System,” and that of course is the point of this provision— to push em ployers into t he Basic Pilot Program. As explained above, the record reflects substantial costs im posed by Basic Pilot, and such econom ic harm is clearly sufficient to confer standing. Warth, 422 U.S. at 523-25. The Attorney General responds that the costs and burde ns associated with Basic Pilot are “tenuous,” AG Br. 32, but this is e pithet rather than argument. The State Appellants nowhere assert that such costs do not confer standing, nor could they.
Moreover, this provision will expose em ployers to the monetary and reputational harms suffered as a result of be ing accused—even wrongly—of employing illegal aliens, and to the inevitable rise of claims by former employees seeking to exploit this leverage and extract settle ments. A437-39, 4 44-46, 452-54, 461-63, 468-69, 476-77, 483-84; A42-43 (Compl. ¶ 55(a)-(g)). Section 7(C) (unli ke federal law) imposes liability on employers regardless whether they actually know an employee is illegal, and (also unlike fede ral law) it has no exception for good-faith
pay higher contract prices (a dubious pr oposition), he does not explain how busi nesses could monetize the numerous intangible harms caused by this provision.
27

compliance with the I-9 Form process. A116; A36, 42 (Compl. ¶¶ 38, 55(a)). This harms the Cham bers and t heir members: even when they comp ly in good faith with federal law and do not knowingly e mploy illegal workers, they are still sub ject to Oklahoma ad ministrative action and substantial penalties. The Cham bers’ membership includes businesse s that are particularly like ly to suffer these har ms because they have p eriodic turnover in th eir workforces and hence nu merous potential complainants. A476-77. Thus, as the declarations in the record reflect, these employers will be forced to divert funds, to set aside reserves to account for these risks, and to purchase ad ditional liability insurance, and will necessarily expend significant time, money, and legal fees addressing the impact of this law and managing the resulting risks. A437-39, 444-46, 452-54, 461-63, 468-69, 476-77, 483-84; A42-43 (Compl. ¶ 55(a)-(g)).
Notwithstanding these harms, Appellants assert that the Chambers should be denied standing unt il they “‘knowingl y’” violate the law. AG Br. 32-33. Thi s misstates Section 7(C)’s scienter requirement, supra at 27, but more to the point, it neglects that the very real dangers of gov ernment investigations and administrative action created by the statute are ample to c onfer standing: “[W]here threatened action by government is concerned, we do not require a plaintiff to expose him self to liability before bringing suit to challenge the basis for th e threat—for example, the constitutionality of a law thr eatened to be enforced.” Medimmune, Inc. v. Genen-
28

tech, Inc., 127 S. Ct. 764, 772 (2007 ) (emphasis omitted); Hays v. City of Urbana , 104 F.3d 102, 104 (7th Cir. 1997) (“busi nesses potentially affected by a regulation may pursue pre-enforcement challenges to l earn whether they must incur the costs of compliance”). As this Court has r ecognized, “‘[p]arties need not … await the imposition of penalties under an unconstitutional enactment in order to assert their constitutional claim for an injunction in federal court.’” United States v. Colo. Supreme Court, 87 F.3d 1161, 1166 (10th Cir. 1996).
3. Section 9. Finally, the Chambers and their members will be harm ed by Section 9, which requires businesses either to verify the work authorization of certain non-employees (“individual independent contractors”) or suffer significant adverse consequences: take inflated, non- proportional withholdings from contracts with such contractors, or become liable fo r penalties in the same am ount. A119. The Attorney General argues (AG Br. 28) th at the Chambers do not have standing to challenge Section 9 because “the only injury” alleged by the Chambers is “the requirement to use an SVS,” and Sectio n 9 does not contain such a requirem ent.13 This is simply mistaken: the use of Basic Pilot is not the only harm alleged in the Complaint and set forth in the declaratio ns, which show that Section 9 will indeed cause substantial harms. The record demons trates that, contrary to what Section 9
13 He also argues that these are not proper defendants because they do not have any enforcement power. AG Br. 28-29. We addr ess these assertions in the context of Appellants’ identical Eleventh Amendment arguments. See infra Section I.B.
29

would require, under federal law employers are not supposed to verify independent contractors. See 8 C.F.R. § 274a.1(f) (verification of work authorization status i s limited to “em ployees,” which “does not mean independent contractors”); A134 (users of the Basic Pilot Program may not verify non-employees); A143 (same for SSNVS). Indeed, to verify the work stat us of independent contractors threatens liability under federal law—precisely because verifying the status of such workers is not contemplated, the decision to do so may subject the employer to clai ms of discrimination. 8 U.S.C. § 1324b(a)(6) (d emanding documentation other than that required by federal la w may give rise to a clai m for immigration-related discrimination).
Accordingly, Section 9 effectively fo rces Oklahoma businesses that contract with individual independent contractors to withhold money from the consideration due under the contract at a high rate or in cur penalties. A436, 444, 451, 460, 470, 478, 482; A43-44 (C ompl. ¶¶ 56-59). This re sults in substantial harm: Section 9 makes it more expensive for i ndividual independent contractors to do business i n the State, and more difficult for businesses to use their services. It poses an impediment to com pleting jobs on tim e; exposes contracting entities to potentia l breach-of-contract suits from their cust omers; and costs businesses significant sums in either lost services or higher overhead expenses associated with paying the penalty or paying i ndividual independent contractors m ore money to offset t he
30

non-proportional withholding requirement. A436-37, 443-44, 451-52, 454, 46061, 463, 470-71, 478-79, 482-83; A44-45 (C ompl. ¶ 59(a)-(c)). At the very least, businesses will be forced to inc ur training and other personnel costs to have their employees calculate and rem it the new w ithholdings or penalties required by the Act, which have heretofore been precl uded under Oklahoma law. A437, 452, 461; see 68 Okla. Stat. § 1701.1(A), (C). This is ample to confer standing.
B. The Eleventh Amendment Does Not Bar This Suit. Both Appellants’ briefs summarize gen eral principles concerning sovereign immunity, and discuss cases concerning damages actions brought directly against a state rather than, as here, state officials. AG Br. 14-15; Tax Br. 10-13. All of thi s is irrelevant—because this case seeks prospective equitable relief again st state officers in their official cap acities, Eleventh Amendment sovereign immunity is not implicated. See Ex parte Young , 209 U.S. 123 (1908). Recognizing this, Appellants instead challenge whether certain of them are proper defendants as to certain claims, and whether the Attorney Gener al is a proper defendant at all. AG Br. 1920; Tax Br. 19-20. There ar e, however, multiple proper defendants for each ch allenged provision of HB 1804. 1. As an initial matter, Governor Henry was named a d efendant and was found by the district court to have a sufficient nexus to the enforcement of each of the challenged sections of HB 1804. A 28 (Compl. ¶11); A 787. He has not ap-
31

pealed, see AG Br. 15 n.1, and therefore has c onceded that he is a proper defen-
dant. Villescas v. Abraham , 311 F.3d 1253, 1256 (10th Cir. 2002). At a bare
minimum, therefore, this suit can proceed against him.
2. The Human Rights and Tax Comm issioners have conceded that they are
proper defendants with respect to Sections 7(C) and 9, respectively. With respect
to Section 7(C), they ad mit that “[t]he HRC is co nnected because they are given
the authority to enforce the statute by inve stigating claims of discriminatory con-
duct and issuing remedies.” AG Br. 20; id. at 14. This is plainly correct. See 25
Okla. Stat. §§ 1501(3), 1502.1, 1505, 1506; Tate v. Browning-Ferris, Inc., 833
P.2d 1218, 1227 (Okla. 1992) (describing th e HRC’s authority to enforce Title 25,
which includes Section 7(C)). They also agree that the Tax Co mmissioners have
“authority to enforce” Section 9. AG Br . 19; Tax Br. 4 (only seeking “immunity
from suit with respect to” Sect ions 7(B) and 7(C)). This, too, is correct. See 68
Okla. Stat. §§ 102, 105(C), 226; Okla. Tax Comm’n v. Smith , 610 P.2d 794, 803 (Okla. 1980).14
14 The Human Rights and Tax Commissioners’ real compla int appears to be that the district court’s order could be read as enjoining them on all clai ms, and they object to being nom inally enjoined from doing things they do not do. Thus, the Human Rights Commissioners argue that they should not be enjoined from enforcing Section 9 becau se they do not enfo rce it; the Tax Co mmissioners argue likewise as to Section 7(C). AG Br. 19-20; Tax Br. 2 n.1, 4, 19-20. There is no reason, however, to believe that the injunc tion operates in the way they argue, nor would the relief they seek—p iecemeal dismissals as to cert ain aspects of the injunction, while retaining the m as con cededly proper parties as to others—
32

3. The only real dispute, then, is wh ether the Attorney Gener al is a proper
defendant. It is well established that “[s]tate officers sued in Ex parte Young cases
must have ‘som e connection’ to the enfo rcement of the allegedly defective act ,”
meaning they “have a particular duty to ‘enforce’ the statute in question and a
demonstrated willingness to exercise that duty.” Prairie Band Potawatomi Nation
v. Wagnon, 476 F.3d 818, 828 (10th Cir. 2007). This connecti on may arise from a
specific grant of authority in the chall enged statute, or from the official’s general
powers; “‘it is not necessary that the offi cer’s enforcement duties be noted in the
act.’” Finstuen v. Crutcher, 496 F.3d 1139, 1151 (10th Cir. 2007). The Attorney
General contends that a state official ca nnot be named who “has no connection o r
an attenuated connection to th e law,” AG Br. 17, and cite s cases that stand for the
unremarkable proposition that attorneys gene ral are not proper parties to entirely private actions such as personal tort claims or divorce,15 or in which local officials are charged with enforcing the law.16
accomplish anything: “[I]n issuing and en forcing an injunction, …. [i]f … no re lief becomes necessary against [certain state officers], th eir joinder as individuals will prove harmless.” Browder v. Gayle, 142 F. Supp. 707, 714 (M.D. Ala.) (threejudge panel), aff’d 352 U.S. 903 (1956); id. at 714 n.13; Lee v. Bd. of Regents, 306 F. Supp. 1097, 1100 (W.D. Wis. 1969) (same). 15 See Okpalobi v. Foster , 244 F.3d 405, 409 (5th Cir. 2001) (en banc) (attorney general lacked connection to a “private cause of acti on against m edical doctors performing abortions”); Shell Oil Co. v. Noel , 608 F.2d 208, 212 (1st Cir. 1979) (attorneys general usually are not proper parties in private actions like tort disputes, divorce, and child custody). In Shell Oil, the court held that the attorney general
33

These arguments are a straw man; th e Oklahoma Attorney General has specific statutory duties to enforce Sections 7(B)(2) and 7(C). In addition to his general duty to enforce state law and to “initiate … any action in which the interests of the state … are at issue,” 74 Okla. Stat. §§ 18b(A)(1), (3), he has specific enforc ement power with respect to Section 7(B)(2). He is charged with drafti ng contract language to conform to Section 7(B)(2)’s requirements, 74 Okla. Stat. § 18b(A)(7); he is required to “enforce the proper a pplication of [public] monies” expended under those contracts, id. § 18b(A)(9); and he “institute[s] civil actions against members of any state board or commission for failure of such members to perform their duties as prescribed by the statut es,” including Section 7(B)(2), id. § 18b(A)(16). He has repeatedly dem onstrated the power and willingness to carry out these du ties, including by bringing actions to en force state statutes requiring certain con tract terms, e.g., State ex rel. Edmondson v. Cemetery Co. , 122 P.3d 480 (Okla. Civ. App. 2005); representing state agencies in contractor disputes, e.g., Colclazier v. State ex rel. Okla. Indigent Defense Sys. Bd., 951 P.2d 622 (Okla. 1997); and su-
was a proper defendant becaus e (like here ) the statute outlawed certain conduct, and the attorney general was empowered to enforce the law. 608 F.2d at 212. 16 See Children’s Healthcare is a Legal Duty, Inc. v. Deters , 92 F.3d 1412, 141617 (6th Cir. 1996) (attorney ge neral had an insufficient connection to a statute enforceable only by local prosecutors); Long v. Van de Kamp, 961 F.2d 151, 152 (9th Cir. 1992) (per curiam ) (same); 1st Westco Corp. v. Sch. Dist. of Phi la., 6 F.3d 108, 113 (3d Cir. 1993) (same; school district enforced the law).
34

ing public entities to recover money owed by contractors, e.g., State ex rel. Cartwright v. Dunbar, 618 P.2d 900 (Okla. 1980).
The Attorney General likewise has en forcement duties with regard to Section 7(C). Section 7(C) creates enfo rceable rights under the Oklahom a AntiDiscrimination Act, 25 Okla. Stat. § 1101 et seq. Under that statute, once an “aggrieved person” has exhausted the Huma n Rights Comm ission’s administrative process and wishes t o pursue a remedy in c ourt, “the Attorney General shall file a civil action on behalf of the aggrieved pers on in a district court seeking relief.” 25 Okla. Stat. § 1502.15(A). The Attorney General has much more than “some connection” to the enforcement of Sections 7(B)(2) and 7(C), and he therefore is a proper defendant.
C. The Tax Injunction Act Does Not Apply To Section 9. Appellants’ final jurisdictional argument is t hat the Tax Injunction Act (TIA) deprived the district court of juri sdiction over the preem ption challenge to Section 9. AG Br. 20-25; Tax Br. 5-8. But the TIA does not apply t o Section 9, for two reasons: (1) Section 9’s withhold ing and penalty provisions have a regulatory purpose and so do not co me within the ambit of the TIA; and (2) litigating the constitutionality of a threshold question that merely serves as a trigger for a later assessment—here, whether Section 9’s verification provision is constitutional— does not “enjoin, suspend or restrain the assessment, levy or collection of any tax.”
35

1. Section 9 Does Not Impose A “Tax” Within The Meaning Of The TIA.
The TIA provides that “[t]he district courts shall not enjoi n, suspend or restrain the assessment, levy or collection of any tax under Sta te law where a plain , speedy and efficient rem edy may be had in the courts of such State.” 28 U.S.C. § 1341. Appellants erroneously argue that the TIA wholly “den[ies] federal courts jurisdiction over State taxation issues.” AG Br. 25. To the contrary, the TIA does not immunize “all aspects of state tax adm inistration” from review, Hibbs v. Winn, 542 U.S. 88, 105 (2004), as t he district court properly recognized. A772-73 (re jecting the argument “that the statute focu ses on i ssues of state taxation and i s therefore beyond the jurisdiction of the Court”).
“‘The mere fact a statute raises re venue does not imprint upon it the characteristics of a law by which the taxing power is exercised.’” Am. Petrofina Co. of Tex. v. Nance , 859 F.2d 840, 841 (10th Cir. 1988); see also A772. The “critical inquiry” in determining whether the TIA a pplies is “the purpose of the assessment and the ul timate use of the funds.” Marcus v. Kan. Dep’t of Revenue , 170 F.3d 1305, 1311 (10th Cir. 1999). If the principa l purpose of an assessm ent is regulatory, it is not a “tax” within the meaning of the TIA. Id. at 1310-11; South Carolina ex rel. Tindal v. Block, 717 F.2d 874, 887 (4th C ir. 1983) (“If regulation is the primary purpose of a statute, revenue rais ed under the statute will be considered a
36

fee rather than a tax.”). This is a questi on of federal law, and “[t]he label given by a state for an assessment or charge is not dispositive.” Marcus, 170 F.3d at 1311.
Whether an assessment is regulatory for purposes of the TIA depends primarily on three factors: (1) whether the assessment falls on a narrow class of i ndividuals or broadly “ upon many, or all, c itizens”; (2) whether it is im posed by the legislature, or instead by “an agency upon those subject to its regulation”; and (3) whether it serves “regulatory purposes,” such as “deliberately discoura ging particular conduct by making it more expensive.” San Juan Cellular Tel. Co. v. Pub. Serv. Comm’n, 967 F.2d 683, 685 (1st Ci r. 1992) (Breyer, J.); Marcus, 170 F.3d at 1311. Under this thi rd factor, a penalty—even a “tax” penalty—“is not a ‘tax’ for TIA purposes.” RTC Commercial Assets Trust v. Phoenix Bond & Indem. Co., 169 F.3d 448, 457-58 (7th Cir. 1999) (“States do not assess penalties for the purpose of raising revenue; they assess them so that delinquent tax debtors will be deterred the next time around. … [A penalty is] a special purpose regulatory device.”).
Section 9 is just the type of targeted provision that i s “regulatory” under the San Juan Cellular test that this Court em braced in Marcus. Section 9 require s businesses to verify an “indi vidual independent contractor[’s]” employment status. If it does not, the business m ust withhold money at the top marginal tax rate from the consideration due to its contracting partner (without regard to the am ount of any taxes actually owed), or become liable for a penalty in the same amount. Far
37

from a general revenue provision, this sec tion directly targets a narrow class of businesses and individuals—individual independent contractors and the businesses that contract with them—that t he state deems responsible for a particular regulatory problem (i.e., “independent contractors who are working in the state illegally,” AG Br. 22). As the district court recogni zed, “it is undisputed that t he underlying purpose of [Section 9] is to prevent the em ployment of illegal aliens,” and that the “clear purpose” of the assessment “is to regulate behavior, not raise revenue.” A773. The Act’s drafters them selves announced that the law was designed to “take a stand … by targeting em ployers” and “enacts employer penalties” to punish noncompliance with the prohibition on illegal workers. A695-99. Penalties are not taxes. RTC Commercial Assets Trust, 169 F.3d at 457-58.
Indeed, the statute imposes these pena lties with the clear regulatory purpose of “discouraging particular conduct by making it more expensive.” San Juan Cellular, 967 F.2d at 685. Appellants them selves have explained that Section 9 “is clearly designed to prevent businesses from hiring an individual laborer who is not authorized to work in the United States.” A553. They admitted that the law’s purpose was to “eliminate the reasons the illegal aliens seek to come to this state … by discouraging employers from hiring illegal aliens.” A518. By its plain terms, Section 9 was enacted “pursuant to the prohib ition against the use of unauthorized labor,” A119, which accords with the stated purposes of HB 1804 to address the per-
38

ceived “economic hardship and lawlessne ss” caused by illegal immigrants and to discourage them from residing in Oklahoma. A110. As the district court correctly concluded, these are regulatory objectives, not revenue objectives. A773.
Appellants themselves demonstrate the TIA’s inapplicability when they assert that Section 9 “is not itself an actu al tax,” but rather “a method of t ax collection.” AG Br. 23. Courts have recognized that even when a statute has a broad revenue purpose—which this one does not—such indirect “methods” of collecting tax are not subject to the TIA. In Wells v. Malloy, for instance, the Second Circuit held that the TIA do es not foreclose juri sdiction over a constitu tional challenge to an indirect method of enforcing tax complia nce (there, suspension of a driver’s license). 510 F.2d 74 , 77 (2d Cir. 1975); see also Luessenhop v. Clinton County , 466 F.3d 259, 268 (2d Cir. 2006) (TIA does not apply to a constitutional challenge to an aspect of the tax enforcement process).
Appellants do not cite these cases or discuss these foundational principles. The Attorney General states in conclusory fashion that Section 9 “is not regulatory in nature,” and quotes general statements about the importance of federalism. AG Br. 21, 24-25. The Tax Commissioners wrongly assert that “[t]here is no challenge [in this case] to the definition of [a] ta x,” and dismiss the controlling authority as “bits and pieces of language … that diffe rentiated between ‘re gulatory fees’ an d state taxes.” Tax Br. 7. They ha ng their hat on a Third Circuit case, Sipe v. Ame-
39

rada Hess Corp., 689 F.2d 396 (3d Cir. 1982), but t hat case concerned a challenge to the direct withholding of state unem ployment compensation taxes from all em ployees and, more fundamentally, it had nothing to do with whether the statute’s purpose was regulatory. The district cour t properly concluded that the Tax Injunction Act does not apply here.
2. The TIA Does Not Divest The District Court Of Jurisdiction Over The Chambers’ Request For Declaratory Relief.
Even if the TIA did foreclose an inju nction, it would not apply to the Chambers’ claim for a declaratory judgm ent that the threshold verification requirement in Section 9 is preem pted. See A25-26, 48-50, 52 (Com pl. ¶¶ 1, 3, 68(c), 69(d), Prayer for Relief (A)). Appellants squarely admitted as much below, see A522-23, and properly so: such relief would sim ply resolve a threshold controve rsy arising under federal constitutional law—namely, whether the verification requirement is preempted by federal law—and would not itself “enjoin, suspend or restrain the assessment, levy or collection of any tax,” 28 U.S.C. § 1341. Courts have consistently recognized that the TIA does not bar federal courts from resolving threshold issues that precede t he determination whether taxes are owed. See, e.g., Luessenhop, 466 F.3d at 268; Mobil Oil Corp. v. Tully , 639 F.2d 912, 9 17-18 (2d Ci r. 1981); Harvey & Harvey, Inc. v. Del. Solid Waste Auth., 600 F. Supp. 1369, 137576 (D. Del. 1985); McKay v. Horn, 529 F. Supp. 847, 858-59 (D.N.J. 19 81). The district court did not reach this issue be cause it concluded that the TIA did not ap-
40

ply, and granted a prelim inary injunction. If this C ourt concludes that the TIA does apply, it therefore must remand the case for the district court to consider i n the first instance the Chambers’ alternative request for declaratory relief. II. THE DISTRICT COURT PROPER LY ENJOINED ENFORCEMENT
OF HB 1804. Under the fam iliar standard for a pre liminary injunction, plaintiffs must show a likelihood of success, irreparable harm to plainti ffs or their m embers, that the balance of harms tilts in their favor, a nd that the public interest favors relief. Davis v. Mineta, 302 F.3d 1104, 1111 (10th Cir. 2002). In a preemption challenge, the likelihood of success on the m erits is paramount, because complying with a preempted law constitutes irre parable harm, and neither th e public interest nor the balance of harms is served by en forcing an invalid statute. See infra Section II.D. Here, there is much more than a mere likelihood of success on the merits; the challenged provisions of HB 1804 are indeed pr eempted. They are subject to the express preemption provision contained within IRCA; they attem pt to regulate in a field that Congress exclusively occupi ed; and their singlem inded focus on enforcement conflicts with the carefully ca librated balance of goals that Congress sought to achieve and with the methods Congress chose to achieve that balance. The preliminary injunction should be affirmed.
41

A. IRCA Expressly Preempts Sections 7(B), 7(C) and 9 of HB 1804. The Constitution provides that the laws of the United States “shall be the supreme Law of the Land[,] any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, § 2. Accordingly, it has been recognized since at least McCulloch v. Mar yland that federal law preem pts contrary state enactments. 17 U.S . (4 Wheat.) 316, 405-06, 425-37 (1819). Preem ption may be either express or implied, and applies equally whether the federal provision is a statute or a regulation; in either case, if the state law hinders or frustrates federal objectives, the state l aw is invalid. Geier v. Am. Honda Motor Co. , 529 U.S. 861, 885 (2000); Hillsborough County v. Automated Med. Labs. , Inc., 471 U.S. 707, 713 (1985). We disc uss implied preemption (both field preem ption and conflict preemption) in Sections II.B and II. C below. Express preemption arises when a federal statute expressly precludes acti on by the states; state laws that com e within the scope of an express preemption provision are void. PG&E v. State Energy Res. Conserv. & Dev. Comm’n , 461 U.S. 190, 203-04 (1983). IRCA expressly preempts “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 em ployment, unauthorized aliens.” 8 U.S.C. § 1324a(h)(2).17 That
17 The parenthetical savings clause is plainly inapplicable. No licenses are at issue, and no party has argued otherwise.
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provision displaces each of the ch allenged provisions, as the district court properly held. A779-80.
1. Through operation of Oklahoma’s antidiscrimination laws (title 25 of the Oklahoma Statutes), Section 7(C) would impose administrative and judicial penalties on an em ployer who em ploys an ill egal alien and discharge a legal worker. This provision therefore falls squarely wi thin IRCA’s preem ption provision. As the district court explained, Section 7( C) “imposes penalties of … facing a civil lawsuit for wrongful term ination [that] are dependent on failing to follow the State’s regime for regulating t he employment of illegal aliens.” A780. It targe ts only those who em ploy unauthorized aliens, A116; it authori zes a range of civil damages penalties against them (including backpay and attorney’s fees), see, e.g., 25 Okla. Stat. § 25-1505(B), (C); supra at 14-15; and an adverse finding under this section is grounds for excluding an employer from government contracts, see Okla. Admin. Code § 580:20-1-9(b)(6).
These are certainly “civil sanction[ s]” within t he meaning of 8 U.S.C. § 1324a(h)(2). A “sanction” is “a restrictive measure used to punish a specific action or to prevent some future activity.” Webster’s Third New Int’l Dictionary 2009 (1971); accord Black’s Law Dictionary 1341 (7th ed. 1999) (“[a] penalty or coercive measure that results from failure to com ply with a law, rule, or order”). That is precisely the purpose and effect of Section 7(C). As the Supreme Court re-
43

peatedly has recognized, civil liability m ay “disrupt[] [a] federal scheme no less than state regulatory law to the same e ffect,” and so is equally preem pted. Riegel v. Medtronic, Inc., 128 S. Ct. 999, 1008 (2008); see Aetna Health Inc. v. Davila , 542 U.S. 200, 204, 208 (2004); Geier, 529 U.S. at 881-82.
Appellants respond t hat Section 7(C) imposes no “sanction” on the theory that this term is limited to “a civil fine or criminal penalty.” AG Br. 46. Their argument relies on a snippet of legislative hi story that focused on a different topic— the savings clause—and ignores the stat ute’s plain m eaning and Supreme Court precedent. Indeed, Appellants have offe red no reasoned basis for the surprising theory that Congress meant to forestall on ly the limited sorts of monetary penalties they identify, but to throw wide the doors for unlimited civil liability. The sole case they cite, Madeira v. Affordable Housing Foundati on, Inc., 469 F.3d 219 (2d Cir. 2006), is not to the contrary. Madeira merely held that IRCA does not preempt a worker’s pe rsonal-injury claim against his em ployer that (unli ke Section 7(C)) depends in no way on the worker’s immigration status. 469 F.3d at 239-40, 242.
The Attorney General furt her contends that Section 7(C) does not im pose a sanction for em ploying unauthorized workers, but rather “create[s ] a state action for the term ination of legal residents.” AG Br. 45 (em phasis omitted). This is wordplay, and Congress’s preemptive intent surely cannot be circumvented by this
44

sort of gamesmanship. Liability under Section 7(C) falls only on employers of illegal workers, and it applies because they em ploy illegal workers. This is plain from the statute, and the Attorney Genera l has admitted as much. A506 (Section 7(C) is meant to “prevent[] the hiring of illegal aliens” and applies “only if the employer retains an illegal alien ” (emphasis in original)). This, of course, is what Oklahoma intends: t he purpose of the stat ute in general (and Section 7(C) in particular) is to penalize and deter em ployment of illegal aliens. A506, 545 & n.2, 566-67. Because this provision im poses liability “upon thos e who employ … unauthorized aliens,” 8 U.S.C. § 1324a(h)(2), it is preempted.
2. Sections 7(B)(2) and 9 also are e xpressly preempted, as the district court properly concluded. See A780 (Section 7(B) “im poses penalties of loss of contract” which “are dependent on failing to follow the State’s regime for regulating the employment of illegal aliens”); id. (Section 9 “imposes a penalty of i ncreasing the tax rate on an em ployer who doesn’t comply with the State’s immigration law”). Both sections seek to regulate employment verification: Section 7(B)(2) would require employers to use Basic Pi lot, thereby limiting Congress’s approved options for verifyi ng employees to a si ngle experimental system , and Section 9 would for the first time require verifica tion for non-em ployee contractors. And both sections would im pose penalties on businesses that follow federal instead of state law. Section 7(B)(2) would autom atically and permanently debar em ployers
45

from all public contracts in Oklahoma, which is not only a sanction, but a particularly draconian one. Section 9 im poses a special burden on contracting entities: Whereas no withholding typically is required of a contr acting entity for independent contractors, 68 Okla. Stat. § 1701.1(A), (C), Section 9 imposes an exceptionally high, non-proportional withholding requirement on contracting entities that fail to verify non-em ployees (without re gard to the am ount of any tax actually owed), and makes the entity itself subject to penalties for failing to do so.
Oklahoma imposed these verificati on requirements and acco mpanying penalties with the expre ss purposes of regul ating the hiring of undocumented workers and imposing penalties on that basis. HB 1804 justifies both sections as ways of addressing the perceived “economic hardship and la wlessness” caused by illegal immigrants and discouraging them from residing in Oklahoma, A110, and Section 9 by its terms states that it is enacted “pursuant to the prohibition against the use of unauthorized labor,” A119. Indeed, Appellants themselves have argued that bot h sections are meant to penalize hiring ill egal aliens: Section 7(B)(2), they argue, applies to employers who “are going to … hire an illegal alien” and “prevents state agencies from hiring contractors who employ illegal aliens,” and Section 9 “tax[es] state employers who hire illegal aliens.” A505, 517-18, 545. 18 Appellants further
18 This is also clear from Appellants’ own explanation of Section 9, which they justify on the theory that the federal system is inadequate to ensure that businesses are
46

explain that these sections are meant to “discourage[e] employers from hiring illegal aliens,” A518, and are necessary because the system enacted by Congress is inadequate to prevent businesses from hiring illegal aliens (ev en if, like the Chambers and t heir members, they foll ow federal law and do not knowingly do so). A698.
The Attorney Gen eral now argues that Section 7(B)(2) does not im pose a “sanction” because debarment is not in the nature of a civil fine or criminal penalty. AG Br. 42-43. This is an extrao rdinary contention. Levying debarment against a contractor is manifestly a “penalty or coercive meas ure,” Black’s, supra, and a particularly severe one for many of the Chambers’ members, who depend on public contracts as integral to their business, see A37-39 (Compl. ¶¶ 41, 43, 45, 48); see also A434-45, 442, 450, 458, 462-63, 467, 474. Alternatively, Appellants reprise their “freedom of contract” argu ment, contending that debarment cannot be a sanction because Oklahoma is free to contract with whomev er it wishes. AG Br. 40-43. But as expl ained above (and as the district court properly held), whatever power Oklahoma has to m ake contracting decisions, the Supremacy Clause prevents it from doing so by means of preempted legisl ation. Supra at 26. The Attorney General also argues that Section 9 “is not a penalty for hiring an illegal alien, it
hiring only documented workers, thus re quiring increased withholdings. AG Br. 22-23.
47

is a penalty for not perform ing a tax with holding.” This argument sim ply ignores that the cl ear purpose and effect of th ese provisions—as Appellants them selves have argued—is to penalize and prevent em ployment of illegal aliens. This is precisely what Congress intended to forbi d in § 1324a(h)(2): im posing “civil or criminal sanctions … upon t hose who employ … unauthori zed aliens.” Sections 7(B)(2) and 9 therefore are preempted.
B. IRCA Preempts The Field Of Employment Status Verification. Sections 7(B), 7(C) and 9 of t he Oklahoma statute also are preempted because they would operate in a field that federal law occupies exclusively: verifying the immigration stat us of workers in th e United States. Field preemption exists when, as here, “the federal interest is so dominant” and the “schem e of federal regulation [is] so pervasive as to m ake reasonable the inference th at Congress left no room for the States to supplem ent it.” Rice v. Sant a Fe Elevator Corp., 331 U.S. 218, 230 (1947); Housing Auth. of City of Ft. Collins v. United States , 980 F.2d 624, 632 (10th Cir. 1992) (field is pree mpted “‘if the goals “sought to be obtained” and the “obl igations imposed” reveal a pu rpose to preclude state authority’”). When field preem ption applies, state enactments are invalid, “no matter how well they comport with substantive federal policies.” Lau rence Tribe, American Constitutional Law § 6-27, at 497 (3d ed. 2000).
48

To consider whether federal law preemp ts a given field, courts evaluate the
breadth and depth of “Congressional legislation, agency regulation, and agency ad-
judication,” Sw. Bell Wireless, Inc. v. Johnson County Bd. of County Comm’rs, 199
F.3d 1185, 1190 (10th Cir. 1999), to determine whether the federal law’s “‘struc-
ture and purpose’” show a “pre-emptive intent.” Barnett Bank of Marion County,
N.A. v. Nelson , 517 U.S. 25, 30 (1996). Field pr eemption is particularly likely
“where a m ultiplicity of federal statutes or regulations govern and densely criss-
cross a given field.” Tribe, supra, § 6-31, at 1206-07. In that circum stance, “the
pervasiveness of such federa l laws will help to sustain a conclusion that Congress
intended to exercise exclusive cont rol over the subject matt er.” Id.; see Amalga-
mated Ass’n of Street Employees of Am. v. Lockridge , 403 U.S. 274, 296 (1971);
Norfolk S. Ry. Co. v. Shanklin, 529 U.S. 344 (2000). Wh en federal law does oc-
cupy a field, the court m ust consider the “purpose and effect of the state law at is-
sue” to determine whether it falls within the preempted field. Skull Valley Band of Goshute Indians v. Nielson, 376 F.3d 1223, 1248 (10th Cir. 2004).19
19 These implied preem ption principles operate in their “ordina ry” fashion regardless of the existence of an express preem ption provision or savings clause, as the Supreme Court has explained. Geier, 529 U.S. at 869. The Ninth Circuit’s m istaken conclusion to the contrary in Chicanos Por La Causa, Inc. v. Napolitano , a recent decision permitting Arizona to mandate the use of Basic Pilot, is irreconcilable with this binding precedent, and is but one of the many flaws in that decisio n. See __ F.3d __, 2008 WL 4225536, at *7 (9th Cir. Sept. 17, 2008) (finding no im plied preemption because “Congress could have, but did not, expressly forbid state laws from requiring E-Verify participation”). See also infra at 56 n.22, 65 n.26.
49

The field of employment status verification is one in which the federal gov-

ernment’s province is exclusive. As outlined above (at 4-12), federal law regulates

this field in precisely the “dense” and “p ervasive” fashion that charact erizes field

preemption. See Amalgamated Ass’n, 403 U.S. at 296; Rice, 331 U.S. at 230.

Federal law defines in exquisite detail who is authorized t o work, see, e.g., 8

C.F.R. § 274a.12, and the m anner in whi ch every em ployer in the country m ust

verify that a prospective employee is aut horized to work. Before any prospective

employee may be hired anywhere in the country, the prospective employer m ust

“verif[y] that the individual is not

an unauthorized alien.” 8 U.S.

C.

§ 1324a(b)(1)(A). The prospe ctive employee must present documents that estab-

lish his employment authorization and identity, id. § 1324a(b)(1)(B), (C), (D), and

must attest under penalty of perj ury that he is authorized to work,

id.

§ 1324a(b)(2).

This process is accom plished through the fam iliar federal I-9 Form. 8

C.F.R. § 274a.2(a)(2); A126-29 (I-9 form). Federal regulations specify the manner

in which identification docum ents must be examined and the I-9 Form completed,

including the precise documents that may be presented. 8 C.F.R. § 274a.2(b).

Employees may choose which of the approve d documents they wish to present,

and an employer m ay not require the pre sentation of other documents. 8 U.S.C.

§ 1324a(b)(1)(A). This is in part to l imit the danger that requests for a dditional

50

documents will be used to m ask discriminatory treatment. See id. § 1324b(a)(6);

A126 (I-9 Form ; “It is i llegal to discri minate against wo rk eligible i ndividuals.

Employers cannot specify which document(s) they will accept from an em-

ployee.”); H.R. Conf. Rep. No. 1000, at 87, 1986 U.S.C.C.A.N. at 5842-43. Fed-

eral law does not contemplate verifying the status of independent contractors, who

are excluded by definition from § 274a.1(f), (j).20

the veri fication requirements. 8 C.F.R.

Furthermore, federal law sets the m etes and bounds of appropriate prohibi-

tions and sanctions on em ployers. It fo rbids an em ployer from hiring an alien

knowing he is unauthorized to work, or without complying with the I-9 Form proc-

ess. 8 U.S.C. § 1324a(a)(1)(A), (B). It provides a defense to liability to employers

who comply in good faith w ith the I-9 Form process. Id. § 1324a(a)(3); 8 C.F.R.

§ 274a.4. Determ ining whether an em ployer knowingly hi red an unauthorized

worker is committed to a specialized fed eral administrative review system, which

permits complaints to be f iled and gives federal official s substantial discretion to

determine which violations to pursue. 8 U.S.C. § 1324a(e)(1); 8 C.F.R. § 274a.9.

20 Federal law further delves into such specific eventualities as lost verification documents, 8 C.F.R. § 274a.2(b)(1)(vi) ; expired em ployment verification, id. § 274a.2(b)(1)(vii); verifying work author ization after changes in e mployment status, id. § 274a.2(b)(1)(viii); and verifying the status of a previous employee, id. § 274a.2(c). It even specifies how em ployers must retain I-9 Form s. 8 U.S.C. 1324a(b)(3); 8 C.F.R. § 274a.2(b)(2), (e).
51

If the federal government determines to pursue a suspected violation, t hen every aspect of the resulting procedure is spelled out in lengthy and detailed provisions—everything from the manner in wh ich such proceedings are co mmenced (via a “Notice of Int ent to Fine”) to the required method of serving such a noti ce. They even specify the rules of procedure, which in many ways mirror federal court proceedings, including the right to an adversarial hearing before a federal Administrative Law Judge and placing the burde n of proof on the government. 8 U.S.C. § 1324a(e); 8 C.F.R. § 274a.9; 28 C.F.R. pt. 68. At the end of this process, IRCA and its regulations carefully set civil and criminal sanctions for violations, including calibrated and graduated monetary penalties, fines, and civil injunctions against repeat offenders. 8 U.S.C. § 1324a(e)(4), (f); 8 C.F.R. § 274a.10(b). The ALJ’s decision is subject to administrative appeal , then federal judicial review. 8 U.S.C. § 1324a(e)(7), (8).
Congress also regulated the manner in which this detailed process could be changed. It required ongoi ng study, and specified procedures to be fol lowed before aspects of the work authorization process may be modified. It mandated ongoing reports about t he implementation of § 1324a. See IRCA § 402, 100 Stat. at 3441 (codified in 8 U.S.C. § 1324a note). The President is required to monitor the effectiveness of the verification system, and to transm it to designated House and Senate committees written reports of proposed changes well in advance of their ef-
52

fective date, 8 U.S.C. § 1324a(d)(1)(A), (d)(3), which trigger mandatory congressional hearings under certain circum stances, id. § 1324a(d)(3)(C). Any change in the documents used to prove work authorization status is a “major change” that requires two years’ written notice to Congress. Id. § 1324a(d)(3)(A)(iii), (D)(i), (D)(ii).
And there is m ore. Having establishe d these detailed and exclusive procedures in service of its explicitly stated goal of national uniformity, see IRCA § 115, 100 Stat. at 3384, Congress went on to specify the very lim ited experimentation with employment verification it would permit. In 1996, it authorized the creation of “pilot program s for em ployment eligibility confirmation.” 8 U.S.C. § 1324a note. Concern about whether IRCA had ad equately satisfied Congress’s goals led it to approve some experim entation; anxiety as to whether the experi ments might worsen those problems caused Congress car efully to delimit the appropriate scope of experimentation. See supra at 7, 9. The use of pil ot programs could be used only at the election of em ployers, and indeed the federal governm ent is forbidden from requiring employers other than federa l entities and statutory violators to participate in the pilot program s. Id.; IIRIRA § 402(a ), (e), 110 Stat. at 3009-656, 659.
Simply put, Congress perceived the em ployment of illegal aliens to be a national problem, and so im plemented a national solution through finely reticulated
53

statutes and regulations that carefully ba lance multiple goals. This federal statutory and regulatory scheme is so pervasive as to make reasonable the inference that Congress left no room for the states to suppl ement or change it. This i s precisely when field preemption applies. See Ramah Navaho Sch. Bd. v. Bureau of Revenue, 458 U.S. 832, 839-40 (1982) (fi nding field preemption where “[f]ederal regulation … is both comprehensive and pervasive” and reflects a “‘major national goal of the United States’”); Sw. Bell, 199 F.3d at 1192 (fi nding preemption where the subject area was “a federal interest and requires a national approach to regulate the field”); cf. Philip Morris, Inc. v. Harshbarger , 122 F.3d 58, 85 n.41 (1st Cir. 1997) (“a congressional determination to effect a nationally unifo rm standard presents ‘a situation similar in practical effect to that of federal occupation of a field’”).
Each of HB 1804’s challenged provi sions, however, would directly intrude into the domain of em ployment status verification. This is manifest in the statute. Section 7(B)(2) would change Congress’s verification methods and priorit ies by requiring the use of Basic P ilot to the exclusion of ot her approved verification options and debarring from public contracts all businesses that do not comply. Section 7(C) would affect status verifica tion by subjecting em ployers who do not use Basic Pilot to adm inistrative investigations and penalties if th ey are found to employ an illegal alien. And Section 9 l ikewise seeks to directly regulate status verification, imposing burdensome non-proportional withholding requirements or pen-
54

alties on employers who do not verify the work authorization of individual independent contractors. These provisi ons clearly regulate the hiring of aliens, which was HB 1804’s stated purpose. See supra at 12-13, 38, 43-46. Becaus e this field is exclusively occupied by the federal government, each of the challenged provi sions is expressly preempted.
C. The Challenged Provisions Conf lict With Congress’s Goals And Its Chosen Methods For Accomplishing Them.
Finally, even if the field of status ve rification were not preempted, the challenged provisions are preempted because they conflict with the goals that Congress sought to balance, and the methods it specifically chose to do so. IRCA represents a careful balance of m ultiple goals, eff ectuated through designated methods, and Oklahoma’s own goals and m ethods are starkly at odds with t he choices Congress enacted into law.
1. The Supreme Court has explained that “even if Congress has not occupied the field, state l aw is naturally preem pted to the extent of any conflict with a federal statute.” Crosby v. Nat’l Foreign Trade Council , 530 U.S. 363, 372 (2000). Conflict preemption applies “where ‘under the circumstances of a particular case, the challenged state law stands as an obstacle to the acco mplishment and execution of the full purposes and objectives of Congress.’” Id. at 372-73 (altera-
55

tions omitted).21 This is particul arly true in matters of immigration. Congress has
“superior authority in this field,” and where it “has enact ed a complete scheme of
regulation and has therein provided a standard for [regulating] aliens, states cannot,
inconsistently with t he purpose of Congress, conflict or interfere with, curtail or
complement, the federal law, or enforce additional or auxiliary regulations.” Hines
v. Davidowitz, 312 U.S. 52, 66-67 (1941); see Galvan v. Press, 347 U.S. 522, 531
(1954) (“[T]hat the formulation of [immigration] policies is entrusted exclusively
to Congress has become about as firm ly imbedded in the legislative and judicial
tissues of our body politic as any aspect of our government.”).22
21 Accord Savage v. Jones, 225 U.S. 501, 533 (1912) (a “state law must yield” if it prevents “the purpose of” a federal law from being accomplished or “frustrate[s]” the federal law’s “operation”); Houston v. Moore, 18 U.S. (5 Wheat.) 1, 22 (1820) (Supremacy Clause overrides state laws whenever their enforcement would “thwart[]” or “oppose[]” the “will of Congress”). 22 The Ninth Circuit’s reliance on De Canas v. Bica , 424 U.S. 351 (1976), for the contrary proposition was mistaken. See Chicanos Por La Causa , 2008 WL 4225536, at *5. De Canas found “uniform national rules” and “general sanctions” for status verification to be lacking at the time it was decided, 424 U.S. at 360 n.9, but that case predated the enactment of IRCA by a decade, and IRCA enacted just such rules and sanctions. See Chicago & Nw. Transp. Co . v. Kalo Brick & Tile Co., 450 U.S. 311, 328-29 (1981) (a decision pr eceding the enactment of the relevant federal statute “can hardly be viewed as an authoritative construction” of the subsequent enactment for preem ption purposes). For sim ilar reasons, the Ninth Circuit was mistaken to emplo y the so-c alled “presumption against preem ption.” 2008 WL 4225536, at *5. That presumpti on does not apply “when the State regulates in an area wh ere there h as been a history of signi ficant federal presence.” United States v. Locke , 529 U.S. 89, 108 (2000). The federal presence here is longstanding.
56

Relevant here, conflict preemption commonly arises when Congress has carefully balanced multiple and competing goals, and employed particular methods for achieving its chosen balance. In Bonito Boats, Inc. v. Thunder Craft Boats, Inc., for instance, the Supreme Court eval uated a preemption claim regarding the federal patent laws. Because those stat utes “strike [a] balance” am ong goals, the states may not “second-guess” that j udgment. 489 U.S. 141, 144, 152 (1989); accord Biotech. Indus. Org. v. Dist. of Col umbia, 496 F.3d 1362, 1372-74 (Fed. Cir. 2007). In National Foreign Trade Council v. Natsios , a Massachusetts law that would have limited trade with Burma wa s held preempted where Congress’s chosen policy “attem pt[e]d to ba lance various concerns,” and “constructed” a “carefully balanced path.” 181 F.3d 38, 76 (1st Cir. 1999), aff’d sub nom. Crosby, 530 U.S. at 377-78 (noting Congress’s decision to “‘steer a middle path’” by means of careful “calibration”). And in Rogers v. Larson, the Third Circuit held the Virgin Islands’ law regulating alien workers to be preempted by the Immigration and Nationality Act because it “strike[s] a [different] balance” between the goals of “assur[ing] an adequate labor force on the o ne hand and to protect the jobs of citizens on the other.” 563 F.2d 617, 626 (3d Cir. 1977). See also Brown , 128 S. Ct. at 2412 (preemption where Congress “struck a balance”); Riegel, 128 S. Ct. at 100608 (preemption where federal agency balanced costs and benefits); Chicago & Nw. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 321 (1981); Colacicco v. Apo-
57

tex, 521 F.3d 253, 271-72 (3d Cir. 2008) (pre emption where FDA “balanc[ed] the benefits and risks”), petition for cert. filed No. 08-437 (Oct. 2, 2008).
States likewise may not recalibrate Congress’s selected balance by alteri ng the methods Congress chose t o achieve that balance. Accordingl y, conflict preemption occurs when state law “interfere s with the methods by whic h the federal statute was designed to reach [its ] goal.” Int’l Paper Co. v. Ouellette, 479 U.S. 481, 494 (1987). This is so even when the state law purports to serve the same end as federal law: “[t]he fact of a common end hardly neutralizes conflicting means.” Crosby, 530 U.S. at 379; Gade v. Nat’l Solid Wastes Mgmt. Ass’n , 505 U.S. 88, 103 (1992). As Just ice Holmes explained, “When Congress has taken the particular subject-matter in hand, coincidence is as ineffective as opposition, and a state law is not to be declared a help because it attempts to go farther than Congress has seen fit to go.” Charleston & W. Carolina Ry. v. Varnville Furniture Co., 237 U.S. 597, 604 (1915).
2. IRCA represented a painstaking effort to accomplish mu ltiple purposes, and to do so by parti cularized means. At its inception, IRCA was the result of extensive study and a m onumental effort of legislative co mpromise. See supra at 1, 4; Nat’l Ctr. for Immigrants’ Rights , 913 F.2d at 1366 (IRCA represents “a carefully crafted political co mpromise which at every level balances specifically chosen measures discouraging unauthorized employment with measures to protect
58

those who m ight be adversely affected”). Beginning in 1971, and in every year thereafter, Congress conducted “[e]xtensive and comprehensive hearings” on proposals to prohibit employment of illegal aliens. H.R. Rep. No. 99-682(I), at 52-56, 1986 U.S.C.C.A.N. at 5655-60; S. Rep. No. 99-132, at 18-26. When after 15 years of study Congress finally enacted IRCA, it sought to acco mplish at least four critical goals: to prevent the hiring of illegal aliens, while being “the least disruptive to the American businessman and … also minimiz[ing] the possibility of employment discrimination,” H.R. Rep. No. 99-682(I), at 56, 1986 U.S.C.C.A.N. at 5660; S. Rep. No. 99-132, at 8-9, 32, all within a framework of uniform national enforcement, IRCA § 115, 100 Stat. at 3384. See supra at 4-6.
These goals were accom plished through particular methods. Lim iting the hiring of illegal aliens was acco mplished by m eans of the document-based I-9 Form process and the em ployer sanctions regime, and the i mplementing regulations for both. See supra at 5-6. But thi s goal was not elevated above all others. A deliberate decision was m ade to lim it burdens on em ployers. Statutory violations were limited to “knowing” viol ations, 8 U.S.C. § 1324a(a)(1)(A), and goodfaith compliance with the I-9 Form process was established as a defense, id. § 1324a(a)(3). The process for adjudicating employer violations was carefully delineated, including num erous procedural protections, id. § 1324a(e); 8 C.F.R. § 274a.9; 28 C.F.R. pt. 68, and em ployer sanctions were graduated and calibrated,
59

not only to limit burdens on employers, bu t also because over-sanctioning employers could result in di scrimination against certain applicants, see A195-96, 204-06. Congress likewise limited the burdens on employers through its decisi on to create a nationally uniform system, which faci litates uniform nationwide enforcement, and alleviates the burden on national em ployers that would result from having to comply with multiple employee verification standards in different jurisdictions.
The goal of prevent ing discrimination was embodied in the statute’s robust prohibition against discrimination in hiring. 8 U.S.C. § 1324b. Additionally, Congress made it a discrim inatory practice to “request more or different documents” than § 1324a requires, or t o “refus[e] to honor documents tendered tha t on their face reasonably appear to be genuine” id. § 1324b(a)(6), for fear that such requests would mask discrimination. And independent contractors are excluded from the scope of IRCA’s verification requirements, for good reason: this avoids discrim ination that could result from screening before contracts are signed, 23 and also avoids burdens on businesses from the continuing verification of job-spe cific con-
23 See 8 C.F.R. § 274a.1(f), (j); A134 (E-Verify MOU ¶¶ II.C.7, 8) (“The Employer is prohibited from initiating verification procedures before the em ployee has been hired [or] for pre-em ployment screening of job applicants.”); A143 (SSNVS Handbook) (“It is illegal to use the service to verify SSNs of potential new hires or contractors.”); see Lozano v. City of Hazleton, 496 F. Supp. 2d 477, 526 (M.D. P a. 2007) (“under federal law, employers need not verify t he immigrant status of … independent contractors,” and a municipal ordinance that purported to require verification of those workers was preempted).
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tractors (which Congress expressly sought to avoid, see H.R. Rep. 99-682(I), at 57, 1986 U.S.C.C.A.N. at 5661).
Likewise, Congress’s decisions to auth orize pilot programs for study, and to keep those programs deliberately volun tary, stemmed from a recognition that online verification is extremely burdensome for some employers; that such systems may themselves lead to discrimination; and that further study was needed. See supra at 7, 9; A195-96, 204-06. Simply put, this is not a situation in which Congress “create[d] only a floor” and thereby left state law “room … to operate.” Geier, 529 U.S. at 868; Choate v. Champion Home Builders Co., 222 F.3d 788, 792 (10th Cir. 2000). Rather, it selected the particular regulatory scheme that it determ ined would best accomplish its specified goals.
3. HB 1804, however, would thwart Congress’s goals by enacting substantive requirements and enforcement met hods fundamentally different from Congress’s, thereby shifting t he balance of objectives Congress sought t o achieve. Whereas Congress sought to reconcile numerous goals, Oklahoma pursues only one: keeping undocumented workers out of Oklahoma at all costs. Leaving aside the very real questions about the efficacy of Oklahoma’s chosen method, it is clear that this is the singul ar goal of HB 1804. See supra at 12-13, 38, 43-46; AG Br. 3 (“The Legislature’s purpose in passing HB 1804 was to protect Oklahom a residents from the adverse effects of il legal immigration.”); A698 (HB 1804 “was ap-
61

proved because of the complete failure of the federal government to enforce existing immigration laws”); accord A518, 533, 695-99.
To that end, HB 1804 “would stand as an obstacle to the federal government’s chosen method[s].” Geier v. Am. Honda Motor Co. , 166 F.3d 1236, 1241 (D.C. Cir. 1999), aff’d 529 U.S. 861 (2000). It would effectively make Basic Pilot mandatory for numerous employers, notwithstanding that Congress expressly made it voluntary. (The idea that the Oklaho ma legislature could make Basic Pilot m andatory, where the Secretary of Ho meland Security is forbidden from doing so, is more than passing st range.) Unlike federa l law, Oklahoma attem pts to enforce its conflicting verification requirements by imposing multiple penalties on employers: debarment from public contracts, the crea tion of adm inistrative liability for “discriminatory practices,” and onerous withho lding requirements and penalties. Furthermore, whereas federal law contains a good-faith defense for statut ory violations, HB 1804 does not; the only safe harbor i n Oklahoma law is use of the Basic Pilot Program. Federal law limits liability to “knowing” violations; Oklahoma law requires only the lessened scienter of “reasonably should have known” under Section 7(C). The federal system entrusts the determination of employer violations to an administrative system that observe s numerous procedural protections, and which is rooted in federal ag encies’ specialized expertise to address issues of alienage and employment status, see supra at 6 & n.3; the Oklahoma statute creates
62

no such safeguards, and would have these quintessentially federal determinations handled by the Oklahoma Human Rights Commission, 25 Okla. Stat. §§ 1502, 1502.1, 1506(a).24 Fe deral law excludes the veri fication of independent contractors from its coverage; Section 9 effectively requires it.
The result of this Oklahoma reg ime would be to impose substantial burdens on employers that Congress di d not contemplate, and to upset the careful balance of competing goals Congress sought to ach ieve. Under circum stances like these, where Congress has acted w ith deliberate nuance but th e state “cho[oses] a blunt instrument to further only a single goal,” state law is preempted. Natsios, 181 F.3d at 76; see also Edgar v. Mit e Corp., 457 U.S. 624, 634 (1982) (preemption resul ts when a state “upset[s] the careful balance struck by Congress”). This is im permissible in its own right, and it is made all the worse by the fact that if Oklahoma is permitted to act in this dom ain, so too can every state. See Bonito Boats, 489 U.S. at 161 (considering t he “prospect” of acti on by “all 50 States” in evaluating preemption); Buckman Co. v. Plaintif fs’ Legal Comm. , 531 U.S. 341, 350 (2001)
24 See also Lozano, 496 F. Supp. 2d at 536 (states “ do not have the authority to determine an alien’s immigration status. Federal law makes no pr ovision for a state court to make a decision regarding immigration status. Such status can only be determined by [a federal] immigration judge.”); Gutierrez v. City of Wenatchee, 662 F. Supp. 821, 824 (E.D. W ash. 1987) (“[t]here is simply no jurisdictional authority” for a state court to determine whether an alien is lawfully present in the United States).
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(same).25 T his departure from what Congress contemplated is flatly im permissible. See Offshore Logistics, Inc. v. Tallentire , 477 U.S. 207, 230 (1986) (“i ncongruous is the idea that a Congress seek ing uniformity … would intend to allow widely divergent state law”).
4. Relatedly, the challenged provi sions conflict with federal law because they would limit the options for em ployment verification that specifically are authorized under federal law, thereby “present[ing] an obstacle to the variety and mix of [verification methods] that th e federal regulation sought.” Geier, 529 U.S. at 881. The Suprem e Court long has recogni zed that when Congress has preserved an array of options, a state law lim iting those options is preem pted. In Geier, for instance, a federal motor ve hicle safety standard “d eliberately provided … manufacturer[s] with a range of choices among different passive restraint devices” to install, and did so for a variety of policy r easons: “a mix of devices would help develop data on com parative effectiveness, would allow the indust ry time to overcome the safety problem s and the hi gh production costs associated with airbags, and would facilitate th e development of alternativ e, cheaper, and safer pas-
25 Indeed, such Balkanization already has begun. Ill inois has passed a law forbidding employers from using Basic Pilot. A 416-17. Numerous other states have enacted or are considering a variety of di sparate verification regimes. A381, 385-89 (Nat’l Conf. of State Legis., 2007 Enacted State Legislation Related to Immigrants and Immigration (Nov. 29, 2007)) (reporting th at 244 employer-related immigration bills were introduced in 45 states in 2007, and 20 states en acted legislation). This patchwork is precisely what Congress sought to avoid.
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sive restraint systems.” Id. at 875, 879. The Supreme Court rejected the plaintiffs’
argument that, “the m ore airbags, and the sooner, t he better,” id. at 874, and held
preempted a tort suit for negligent design, precisely because that result would interfere with the choices that federal law d eliberately preserved.26 Num erous deci-
sions hold likewise. See Wissner v. Wissner, 338 U.S. 655 (1950) (California in-
heritance law is preempt ed where federal law granted policyholders the right t o
select a beneficiary and state law did not); Griffith v. Gen. Motors Corp. , 303 F.3d
1276, 1282 (11th Cir. 2002) (where federal law gives choices, “a state suit that de-
pends on foreclosing one or more of those options is preempted”).
Oklahoma law would lim it the choices preserved by federal l aw, as Chief
Judge Cauthron recognized. Section 7(B)(2 ) “attempts to restrict the documents
adequate to verify a potentia l employee[’]s status, [even though] this restriction is
contrary to the instructions set by federal law for using the I-9 Form.” A781. The
process for verifying em ployment eligibility is the I-9 Form process, unless a par-
26 In its recent decision in Chicanos Por La Causa, the Ninth Circuit held Geier inapplicable because it could not find “str ong evidence of Congress’s intent to promote competition and balance federal goals in a co mpetitive environment encouraging alternative systems.” 2008 WL 4225536, at *8. But this is entirely beside the point. The relevant preemption inquir y is whether Congress sought to balance multiple goals and selected an array of op tions to achiev e them, not whether this regulatory regime sought to prom ote the same goals as the regulatory regim e in Geier. And on the proper inquiry, thi s case and Geier are on all fours—just as in Geier, Congress here plainly intended to accomplish and to balance multiple goals, and it preserved a variety of permissible means to reach those ends.
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ticular employer has chosen to use Basic Pilot—a choice that is deliberately reserved to employers, for the reasons we have explained. Supra at 8-12, 23-26, 53. What is more, within the I-9 Form process, IRCA and its implementing regulations guarantee to prospective empl oyees the c hoice of which docum ents to present. Employers may only exam ine whether th e documents presented “reasonably appear on [their] face to be genuine,” 8 U.S.C. § 1324a(b)(1)(A)(ii), and asking for additional documents is forb idden and may be treated as an “unfair imm igrationrelated employment practice,” id. § 1324b(a)(6); supra at 5-7, 29-30. This policy choice, too, was delibe rate—Congress amended IRCA in 1990 and 1996 t o add these provisions, i n order to ensure that requests for additi onal documents could not be used to mask discrim ination. See supra at 5-7, 9. Wh ereas Congress has deliberately preserved these choices for employees and employers, Section 7(B)(2) and Section 7(C) (insofar as it imposes liability on businesses that fail to adopt Basic Pilot) would prevent em ployers and employees from exercising them. For this reason, too, Sections 7(B)(2) and 7(C) are preempted.27
27 The inclusion of SSNVS in Oklahoma’s Status Verification System is preempted for an additional reason: “it is im possible for a private party to com ply with both state and federal requirements.” English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990). SSNVS is not an approved m ethod for verifying work authorization status under 8 U.S.C. § 1324a or its im plementing regulations. Far from it: the Social Security Administration mandates that SSNVS be used solely to assist em ployers in complying with year-end wage reporting requirements, see Agency Information Collection Activities, 70 Fed. Reg. 8125, 8128 (Feb. 17, 2005), it is “illegal” to use the
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Section 9 is preem pted for a different reason. Rather than restricting the range of verification options Congress ap proved (as Section 7(B)(2) and 7(C) do), it would expand the verification requi rement beyond what Congress intended. This is impermissible. When, as here, Congress sought to achieve its objectives by deliberately excluding from regulation a class of businesses, “no such regulation i s appropriate or approved pursuant to the polic y of the statute, [and ] States are not permitted to use their police power to enact such a regulation.” Ray v. Atlantic Richfield Co., 435 U.S. 151, 178 (1978). HB 1804 also purports to impose burdensome withholding requirements and other penalties for failure to comply with those inconsistent state requirements, which is equally preempted. See Takahashi v. Fish & Game Comm’n, 334 U.S. 410, 419-21 (1948) (a state may not enforce penalties for failure to follow preem pted regulations); Hines, 312 U.S. at 73-74 (the enforcement of a state statute that conflicts with the “uniform national system” of immigrant registration is preempted).
D. The Remaining Requirements for a Preliminary Injuncti on Are Satisfied.
Having established a strong li kelihood of prevaili ng on the merits of this preemption case, the rem aining preliminary injunction factors are easily met. As the district court explained, in preem ption cases the merits determ ination largely system for any other purpose, and the syst em “does not make any statement about [an] employee’s immigration status.” A143-44 (SSNVS Handbook).
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subsumes the other factors (irreparable h arm, balance of harm s, and the public interest) relevant to prelim inary relief. A781-82. When plaintiffs are “forced to comply with a law that m ay ultimately be found to be preem pted,” there is irreparable harm. A781; see Trans World Airlines, Inc. v. Mattox , 897 F.2d 773, 785 (5th Cir.), cert. denied, 498 U.S. 926 (1990) (enforcement of state laws regulating airlines “would violate the Supremacy Clause, causing irreparable injury to the airlines” by “depriving [them] of a federally created right to have only one regulator”). Businesses in Oklahoma are entitled to rely on Congress’s weighing of the benefits and burdens of im migration verification and en forcement, and to use the same uniform, nationwide verification syst em Congress created for all em ployers. Moreover, the Chambers submitted am ple evidence—all of it unrebutted and credited by the district court—of t he numerous harms HB 1804 would cause. Supra Section I.A. Many of those har ms are financial, and because the stat e is immune from a suit for m oney damages if the law is deemed unconstitutional, “no method of compensation can remedy these harms.” A781.
Appellants do not c onfront the rule that preem pted legislation im poses irreparable harm, and their so le response to the additional harm s is to call them “speculative” and “not imminently harmful.” AG Br. 51-52. They cite no facts to support these conclusions, which are at odds with the district court’s findings, and their assertions are contrary to the eviden ce. With respect to Section 7(B)(2), fo r
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example, Appellants focus narrowly on the out-of-pocket costs required to operate the Basic Pilot Program , see AG Br. 53, but they ignore the many other costs and harms that the Basic Pilot Program entails , which are set forth in detail in the Chambers’ declarations and the documentary evidence. See supra at 8-12, 23-26. The assertion that “Plaintiff [sic] has not established any other costs” besides these administrative expenses, AG Br. 53, is dem onstrably false. For Section 7(C), their argument hinges on a m isstatement of law—th ey assert that Section 7(C) applies only if a business “knowingly hire[s] illegal aliens in violati on of federal law, ” compare AG Br. 5 4, with supra at 14—and again they ignore the unrebutted documentary and testimonial evidence esta blishing the harms caused by this section. See supra at 27-29. As to Section 9, they offer nothi ng but attorney argument to respond to t he Chambers’ evidence detailing the harms that will necessarily result from this section regardless whether an individual independent contractor is work-authorized. Compare AG Br. 5 2, with supra at 29-31. 28 Mere assertion does not show any abuse of discretion.
28 The Attorney General also argues that S ection 9 went into effect shortl y before the Chambers filed suit, and so asserts th at no harms actually have resulted. AG Br. 52. This argument is contrary to the district court’s find ing that “Plaintiffs have offered evidence through affidavits establishing that [Section 9] is now causing and will likely continue to cause irre parable harm.” A781. Moreover, it ignores that Section 9 was enacted shortly before the end of the taxable year, and that plaintiffs filed suit at the beginning of the next taxable year. Appellants’ real argument is that the Cham bers should not be able to seek a prelim inary injunction
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The balance of harm s and the public in terest likewise weigh in favor of enjoining a preempted statute. As to the fo rmer, when a state st atute is preempted, plaintiffs are “entitled to injunctive relief no matter what th e harm to the State.” Bank One, Utah v. Guttau , 190 F.3d 844, 848 (8t h Cir. 1999); see A781; Mattox, 897 F.2d at 784; Bioganic Safety Brands, Inc. v. Ament , 174 F. Supp. 2d 1168, 1179 (D. Colo. 2001) (“In the context of an application for a preliminary injunction to enforce federal preemption, where a state purports to regulate an area preempted by Congress, there is no injury to the sta te to weigh.”). The assertion t hat an injunction is “a subst antial indignity to t he state,” AG Br. 55, is the refore misplaced.29 Moreover, because f ederal law already prohibits the employment of illegal aliens, and provides comprehensive requirements for verifyi ng work authorization status, any “harm” that the state might claim from a d elay in enforcing its preferred syst em of verification and penalti es is m arginal, as t he district
until the statute is enforced against them —which, as explained above, is not the law. Supra at 28-29. 29 The Attorney General further relies on Barnes v. E-Systems, Inc. Grove Hospital Medical & Insurance Plan , 501 U.S. 1301 (1991) for the proposition that “[i]nterference” with a tax law “will always entail a like lihood of substantial harm to the state.” AG Br. 55. Barnes, however, was merely a one-justice order regarding a stay pending a petition for certio rari, which ultimately was denied, see 502 U.S. 981 (1991). And, m ore fundamentally, that case (unlike this one) did not address whether the relevant provision was a “tax” within the meaning of the TIA. Here, it is not, and so enjoining its enforcement cannot harm the state.
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court found. A781-82. It surely doe s not outweigh the harm caused by havi ng to

comply with an unconstitutional law.

As to the public interest, “[that] element of an application for a prelimi nary

injunction is satisfied when the injunction seeks to enforce express federal preemp-

tion from state encr oachment because Congr ess has already found that exclusive

federal regulation in such matters is in the public interest.” Bioganic, 174 F. Supp.

2d at 1179; Bank One, 190 F.3d at 848 (“the public inte rest will perforce be served

by enjoining the enforcement of the invalid provisions of state law”). The public

interest is never served by enfo rcing an unconstitutional law. See Utah Licensed

Beverage Ass’n v. Leavitt, 256 F.3d 1061, 1076 (10th Cir. 2001).

CONCLUSION For the foregoing reasons, the District Court’s order granting a preliminary

injunction should be affirmed.

October 14, 2008

Respectfully submitted,

Robin S. Conrad Shane Brennan NATIONAL CHAMBER LITIGATION CENTER, INC. 1615 H Street, N.W. Washington, D.C. 20062 (202) 463-5337

/s/ Carter G. Phillips Carter G. Phillips Eric A. Shumsky Robert A. Parker Brian E. Nelson SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, D.C. 20005 (202) 736-8000

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STATEMENT CONCERNING ORAL ARGUMENT Plaintiffs/Appellees respectfully request oral argument in this appeal pursu ant to Tenth Circuit Rule 28.2(C)(4). Th is case involves im portant issues of federal preemption that have nationwide cons equences. Plaint iffs/appellees believe that oral argument will assist the Court in addressing and deciding these issues.

CERTIFICATE OF COMPLIANCE I hereby certify that, pursuant to Fed. R. App. P. 32(a)(7)(B), this Consolidated Brief of Plaintiffs/Appellants is pr oportionally spaced, has a typeface of 14 points or more, and contains 17,480 words as permitted by this Court’s August 29, 2008 order.

October 14, 2008

/s/ Robert A. Parker Robert A. Parker

CERTIFICATE OF DIGITAL SUBMISSION I hereby certify that: (1) There are no privacy redactions made to this Brief; (2) The hard copy and electronic copy of this Brief are identical; and (3) The electronic copy of thi s Brief has been checked for viruses using McAfee VirusScan Enterprise 8.5i, and is free of viruses according to that program.

October 14, 2008

/s/ Robert A. Parker Robert A. Parker

CERTIFICATE OF SERVICE
I hereby certify t hat on O ctober 14, 2008, I caused the foregoing
CONSOLIDATED BRIEF OF PLAINTIFFS/A PPELLEES to be filed with the
United States Court of Appeals for the Te nth Circuit by electronic transm ission to
esubmission@ca10.uscourts.gov, with the original and seven copies fi led with the
Clerk by Federal Express.
On the same dat e, I served the fore going Brief by electronic transm ission
upon the following:
M. Daniel Weitman (dan.weitman@oag.ok.gov) Kevin L. McClure (kevin.mcclure@oag.ok.gov) Sandra D. Rinehart (sandy.reinhart@oag.ok.gov) Oklahoma Attorney General’s Office 313 N.E. 21st Street Oklahoma City, OK 73105
Guy L Hurst (ghurst@tax.ok.gov) Assistant General Counsel Oklahoma Tax Commission 120 North Robinson, Suite 2000W Oklahoma City, OK 73102
/s/ Robert A. Parker Robert A. Parker