Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-02496/USCOURTS-azd-2_07-cv-02496-4/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 28:2201 Constitutionality of State Statute(s)

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

ARIZONA CONTRACTORS

ASSOCIATION, INC., an Arizona nonprofit corporation; ARIZONA

EMPLOYERS FOR IMMIGRATION

REFORM, INC., an Arizona non-profit

corporation; CHAMBER OF

COMMERCE OF THE UNITED

STATES OF AMERICA, a Washington

D.C. non-profit corporation; ARIZONA

CHAMBER OF COMMERCE, an

Arizona non-profit corporation;

ARIZONA HISPANIC CHAMBER OF

COMMERCE, INC., an Arizona nonprofit corporation; ARIZONA FARM

BUREAU FEDERATION, an Arizona

non-profit corporation; ARIZONA

RESTAURANT AND HOSPITALITY

ASSOCIATION, an Arizona non-profit

corporation; ASSOCIATED MINORITY

CONTRACTORS OF AMERICA, an

Arizona non-profit limited liability

company; ARIZONA ROOFING

CONTRACTORS ASSOCIATION, an

Arizona non-profit corporation;

NATIONAL ROOFING

CONTRACTORS’ ASSOCIATION, an

Illinois not-for-profit corporation;

WAKE UP ARIZONA! INC., an

Arizona non-profit corporation; and

ARIZONA LANDSCAPE

CONTRACTORS ASSOCIATION,

INC., an Arizona non-profit corporation, 

Plaintiffs, 

vs.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

No. CV07-02496-PHX-NVW (lead)

No. CV07-02518-PHX-NVW (member)

ORDER

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 1 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 2 -

CRISS CANDELARIA, Apache County

Attorney; ED RHEINHEIMER, Cochise

County Attorney; TERENCE C.

HANER, Coconino County Attorney;

DAISY FLORES, Gila County Attorney;

KENNY ANGLE, Graham County

Attorney; DEREK D. RAPIER, Greenlee

County Attorney; MARTIN BRANNAN,

LaPaz County Attorney; ANDREW P.

THOMAS, Maricopa County Attorney;

MATTHEW J. SMITH, Mohave County

Attorney; JAMES CURRIER, Navajo

County Attorney; BARBARA

LAWALL, Pima County Attorney;

JAMES P. WALSH, Pinal County

Attorney; GEORGE SILVA, Santa Cruz

County Attorney; SHEILA POLK,

Yavapai County Attorney; JON SMITH,

Yuma County Attorney; TERRY

GODDARD, Attorney General of the

State of Arizona; and FIDELIS V.

GARCIA, Director of the Arizona

Registrar of Contractors,

Defendants. 

VALLE DEL SOL, INC.; CHICANOS

POR LA CAUSA, INC.; and SOMOS

AMERICA,

Plaintiffs,

vs.

TERRY GODDARD, in his official

capacity as Attorney General of the State

of Arizona; GALE GARRIOTT, in his

official capacity as the Director of the

Arizona Department of Revenue; and

ANDREW THOMAS, in his official

capacity as Maricopa County Attorney,

Defendants.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Plaintiffs have appealed the February 7, 2008 judgment dismissing Defendant

Arizona Attorney General Terry Goddard without prejudice for lack of subject matter

jurisdiction and entering judgment in favor of all other Defendants. They now seek an

injunction preventing Defendants from implementing or enforcing the Legal Arizona

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 2 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 3 -

Workers Act (“the Act”), A.R.S. §§ 23-211 through 214, for the duration of the appeal. 

Fed. R. Civ. P. 62(c). (Doc. ## 181, 182, and 183.) The court’s findings of fact and

conclusions of law (Doc. # 175) principally concluded: (1) that the Act is not expressly

preempted by the Immigration Reform and Control Act of 1986 (“IRCA”), Pub. L. No.

99-603, 100 Stat. 3359 (employer sanctions provisions codified at 8 U.S.C. § 1324a to

1324c (2000)); (2) that the structure and purpose of IRCA do not clearly indicate

Congressional intent to occupy the field of licensing sanctions for employers of

unauthorized aliens; (3) that the Act does not regulate immigration; (4) that neither the

licensing sanctions provisions of A.R.S. § 23-212, nor the requirement to use E-Verify

found in A.R.S. § 23-214 conflicts with the purposes and objectives of Congress; (5) that

the Act affords employers due process of law; and (6) that the Act does not violate the

Commerce Clause of the U.S. Constitution. 

I. Standards for Injunction Pending an Appeal

An injunction pending appeal under Federal Rule of Civil Procedure 62(c) is an

extraordinary remedy that should be granted sparingly. Reading & Bates Petroleum Co.

v. Musslewhite, 14 F.3d 271, 275 (5th Cir. 1994) (“Stays pending appeal constitute

extraordinary relief.”); United States v. Texas, 523 F. Supp. 703, 729 (E.D. Tex. 1981)

(“Since such an action interrupts the ordinary process of judicial review and postpones

relief for the prevailing party at trial, the stay of an equitable order is an extraordinary

device which should be sparingly granted.”).

Four factors must be considered on Rule 62(c) motions: “(1) whether the stay

applicant has made a strong showing that he is likely to succeed on the merits; (2)

whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the

stay will substantially injure the other parties interested in the proceeding; and (4) where

the public interest lies.” Hilton v. Braunskill, 481 U.S. 770, 776 (1987). 

In general, to prevail on a motion for injunction pending appeal, the moving party

must show either (1) “a strong likelihood of success on the merits” and “the possibility of

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 3 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 4 -

irreparable injury to plaintiff if preliminary relief is not granted” or (2) “that serious legal

questions are raised and that the balance of hardships tips sharply in its favor.” Golden

Gate Restaurant Ass’n. v. City of San Francisco, No. 07-17370, ___ F.3d ___, 2008 WL

90078, at *2, 2008 U.S. App. LEXIS 364, at *4 (9th Cir. Jan. 9, 2008) (quoting Natural

Res. Def. Council, Inc. v. Winter, 502 F.3d 859, 862 (9th Cir. 2007); Lopez v. Heckler,

713 F.2d 1432, 1435 (9th Cir. 1983)). “These two formulations represent two points on a

sliding scale in which the required degree of irreparable harm increases as the probability

of success decreases.” Winter, 502 F.3d at 862. Courts must “consider ‘where the public

interest lies’ separately from and in addition to” the balance of hardships between the

parties. Id. at 863. 

All laws passed by State legislatures are entitled to a presumption of validity. That

presumption is an equity to be considered in favor of the State when balancing hardships.

See Walters v. Nat’l Ass’n of Radiation Survivors, 468 U.S. 1323, 1324 (1984)

(Rehnquist, J., chambers). For that reason, in cases “in which ‘the moving party seeks to

stay governmental action taken in the public interest pursuant to a statutory or regulatory

scheme,’ the injunction should be granted only if the moving party meets the more

rigorous likelihood-of-success standard.” Bery v. City of New York, 97 F.3d 689, 694 (2d

Cir. 1996) (citing Plaza Health Labs., Inc. v. Perales, 878 F.2d 577, 580 (2d Cir. 1989));

Tunick v. Safir, 209 F.3d 67, 70 (2d Cir. 2000). Cf. Golden Gate Restaurant Ass’n., 2008

WL 90078, at *13, 2008 U.S. App. LEXIS 364, at *37 (stating that to overcome the

public interest factor, it must be “obvious” that the law is invalid).

In this case an injunction is not needed to protect appellate jurisdiction and would

upset the status quo. 

II. Plaintiffs are Unlikely to Succeed in Invalidating the Act

Plaintiffs bear a heavy burden to invalidate the Act on appeal. They challenge the

Act on its face, so they must prove that the Act cannot operate validly under any

circumstance. To show that the federal government has occupied the field of licensing

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 4 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 5 -

sanctions laws, Plaintiffs will have to overcome IRCA’s preservation of state authority

for employer sanctions by “licensing and similar laws.” 8 U.S.C. § 1324a(h)(2).

Congress has extensive authority to destroy residual state police powers–to close

the fifty laboratories of experiment. The protection of our federalism lies in Congress

having to do so clearly and having to answer for it. “[T]he structural safeguards inherent

in the normal legislative process operate to defend state interests from undue

infringement.” Geier v. American Honda Motor Co., 529 U.S. 861, 907 (Stevens, J.,

dissenting). But no one answers for it when, from special knowledge of purposes and

proportionalities, the courts attribute preemption to Congress free of its own words that

are plain enough to citizens. This would disarrange our federalism. It would require a

bicameral majority to restore state power, rather than leaving state power as our

constitutional default position in the absence of a federal bicameral majority. Plaintiffs

are unlikely to succeed in reading the express preservation of state licensing sanctions out

of IRCA. 

Plaintiffs’ conflict preemption, due process, and dormant Commerce Clause

arguments are even weaker. To some extent they attack the edges of the Arizona Act, not

its core, on hypothetical facts not shown in this case. To that extent their attacks are

directed at particular applications of the Act and are beyond this facial challenge. 

Further, if any single provision fails, the Act’s severability clause will save the remainder, 

provided that the Act is not entirely preempted.

Plaintiffs do not have a probability of success on appeal, much less a strong

probability. A mere “serious question” is not enough to suspend state action “taken in the

public interest pursuant to a statutory . . . scheme.” Bery v. City of New York, 97 F.3d at

694. This shortfall alone requires denial of the motions for injunction pending appeal.

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 5 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 6 -

III. The Balance of Hardships Favors Defendants

A. Plaintiffs’ Hardship is Minimal

Plaintiffs’ hardship comes down to nothing more than the expense of using EVerify. If the federal government’s statistics hold true for Arizona employers, 85% will

spend less than $100 to set-up E-Verify and 75% will spend less than $100 annually to

operate the system. The average employer will likely spend $125 in set-up and $728 in

maintenance of the system. (Joint Statement of Stipulated Facts (“Facts”), Doc. # 152,

Ex. 52 at 104.) 

The Act’s E-Verify requirement is an increment to the already pervasive regulation

of labor and employment in our society. A complaint that there is more cost to comply

with labor regulation has little purchase. It is difficult to establish irreparable injury

based on prospective monetary damages alone. See Stop H-3 Ass’n v. Volpe, 353 F.

Supp. 14, 18 (D. Haw. 1972) rev’d on other grounds, 533 F.2d 434 (9th Cir. 1976)

(citations omitted) (“Traditionally, the irreparable injury contemplated by Rule 62(c) is

that which will make the appeal moot. Thus, prospective monetary damage is not

irreparable injury.”). While the cost of using E-Verify meets the minimum for standing, it

is not so great as to warrant an injunction. See Yniguez v. Mofford, 730 F. Supp. 309, 317

(D. Ariz. 1990) rev’d on other grounds, 939 F.2d 727 (9th Cir. 1991) (“While Yniguez

has established a sufficient threat of enforcement to provide an actual controversy for

purposes of Article III and the Declaratory Judgment Act, she has not established an

enforcement threat sufficient to warrant injunctive relief.”); Lawson v. Hill, 368 F.3d 955,

959 (7th Cir. 2004) (“Even if we are wrong to suppose the risk of prosecution too remote

to confer standing to sue . . . the district judge was right not to enter an injunction . . . .

[a]n injunction is an extraordinary remedy.”). 

Moreover, complying with E-Verify will have off-setting business benefits for

Plaintiffs. It effectively ensures that they will be virtually immune from licensing

sanction proceedings. Arizona Contractors Ass’n v. Napolitano, No.

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 6 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 7 -

CV07-1355-PHX-NVW, __ F. Supp. 2d ___, 2007 WL 4293641, at *11, 2007 U.S. Dist.

LEXIS 90694, at *34 (D. Ariz. Dec. 7, 2007). Based upon past users’ experiences, an

overwhelming majority of Arizona employers will likely find E-Verify an effective and

convenient tool for employment verification, (Facts, Doc. # 152, Ex. 52 at 140), and will

rate the program “Excellent,” “Very Good,” or “Good” (Facts, Doc. # 149, Ex. 13 at 4). 

Plaintiffs submit two declarations from Arizona employers who assert that they

will have to spend much more than the usual amount to set up E-Verify. (Facts, Doc. #

150, Ex. 26 & 27.) Both are owners of franchise restaurants who allegedly will have to

purchase computer equipment and dedicated Internet connections for each location to

comply with E-Verify. One employer states that he will need to spend more than 82

times the national average to set up the system. Both declarations state bare conclusions. 

Neither displays any of the resourcefulness one expects from business people seeking

efficient solutions to problems. The failure to explain and exclude other solutions leaves

the court unpersuaded that either declaration states a likely true cost. Even if the

declarations are taken at face value, their costs are minor compared to the cost to the

State, others, and to the public interest from suspending the Act, as explained below.

B. An Injunction Will Injure the Direct Financial Interests of the State

The State will suffer monetary damages from an injunction pending appeal. Its

expenditure to inform every employer by October 1, 2007, of the Act and of the

obligation to comply with E-Verify after December 31, 2007, will be wasted. 2007 Ariz.

Sess. Laws, Ch. 279, § 3. (Facts, Doc. # 148, Ex. 6.) Giving individuals actual notice of

the law, when it begins, and how to avoid risk by complying with E-Verify, was critical

to the legislature’s purpose of achieving effective deterrence with the fewest number of

employers suffering actual sanctions. If the Act is suspended by court order, that

legislative purpose of individual fairness will be defeated unless a new notice is sent in

the event that the Act is allowed to go back into effect. Therefore, if an injunction were

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 7 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 8 -

issued, the court would require Plaintiffs to post a bond under Rule 62(c) to cover the cost

of a new notice. 

IV. The Harm to the Public Interest from an Injunction Against Enforcement of

the Act Would Greatly Outweigh Plaintiffs’ Cost of Compliance

A. The Arizona Legislature Has Declared the Public Interest

The parties have submitted a number of expert reports and declarations concerning

the effect of immigration on the Arizona economy and wages. Significantly, Plaintiffs’

studies do not distinguish between the effect of authorized and unauthorized immigration. 

Only Defendants’ expert, Prof. George Borjas, offers a conservative estimate of the effect

of unauthorized alien labor on authorized labor, both alien and citizen. For this and other

reasons discussed below, the court finds Defendants’ expert to be persuasive.

In any event, this is not an appropriate forum for second guessing the Arizona

legislature’s decision that the public interest is best served by strongly deterring the

knowing or intentional employment of unauthorized aliens. This court’s “consideration

of the public interest is constrained in this case, for the responsible public officials in [the

State] have already considered that interest.” Golden Gate Restaurant Ass’n., 2008 WL

90078, at *13, 2008 U.S. App. LEXIS 364, at *37. The Arizona legislature, like the

federal government before it, balanced competing social and economic interests and

decided in favor of an economy for those authorized to work in the United States. “[If it

were obvious that the [Act] was unconstitutional or preempted by a duly enacted federal

law[,]” there might be some basis to conclude that the public interest is not served by the

Arizona legislature’s preferred values. Id. However, one cannot by any stretch of reason

describe the Act as obviously invalid. It is therefore in the public interest that this court

exercise its “discretionary power with proper regard for the rightful independence of state

governments in carrying out their domestic policy.” Id. (quoting Burford v. Sun Oil Co.,

319 U.S. 315, 318 (1943)). Declining an injunction pending appeal will allow the Act’s

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 8 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 9 -

continued application, and therefore will “in a real sense, preserve rather than change the

status quo.” Id. at *3, 2008 U.S. App. LEXIS 364, at *7. 

B. By the Most Conservative of Measures, the Balance of Hardships

Favors the Defendants and the Public Interest

In addition to noting the illegitimacy of disagreeing with the legislative body’s

preferred values, the court of appeals in Golden Gate Restaurant Association did assess

the harm to the public and the beneficiaries of the challenged ordinance. Id. at *13, 2008

U.S. App. LEXIS 364, at* 35–37. Here also, the court is persuaded by Defendants’

expert, Prof. George Borjas, that the number of unauthorized workers in Arizona is very

substantial and that their presence in the work force drives down wages for competing

authorized workers. For high school dropouts alone, wages are depressed by at least

4.7%, or about $950 annually. This exceeds $200 million per year just for those

authorized workers. The numbers are far greater when including all authorized workers. 

(Facts, Doc # 150, Ex. 1 of Ex. 39 at 16.) Again, though these are gross estimates, Prof.

Borjas has favored conservative figures.

Plaintiffs’ experts are unpersuasive. Professor Marc R. Rosenblum, a political

scientist and not an economist, offers general political arguments why employer sanctions

have been ineffective and are a bad idea. While his historical narrative is helpful, his

conclusions are not empirical science. Rather, they are speculations about the effects of

the Arizona employer sanctions law, speculations which the legislature was not bound to

accept. His conclusion that “[e]mployer sanctions depress wages for all US workers” is

not persuasive, and the court does not believe it. (Facts, Doc. # 150, Ex. 36 at 9.)

The conclusions of Judith K. Gans, also not an economist, about the general

benefits of immigration do not address the effects of unauthorized alien labor upon those

whom the legislature chose to protect. (Facts, Doc. # 150, Ex. 35.) The opinions of Prof.

Giovanni Peri (Facts, Doc. # 150, Ex. 38) also do not persuasively undercut the opinions

of Prof. Borjas (Doc. # 159, Borjas Aff.).

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 9 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 10 -

These expert reports include, and therefore inappropriately attempt to give weight

to, the value of benefits produced by unauthorized alien labor. The benefits in fact to

those who come to this country against the law to make better lives for themselves, to

those who save from lower cost labor and general depression of wages from employing

unauthorized aliens, and to those who enjoy the products of unauthorized labor at lower

prices, do not count. The beneficiaries chosen identically by federal and Arizona law

prevail over all who benefit from unauthorized alien labor. They are the authorized

workers in the United States who compete with unauthorized aliens. See Incalza v. Fendi

N. Am., Inc., 479 F.3d. 1005, 1011 (9th Cir. 2007) (quoting H.R. Rep. 99-682(I), at 46, as

reprinted in 1986 U.S.C.C.A.N. at 5650) (“In passing IRCA, Congress wished to stop

payments of wages to unauthorized workers, which act as a ‘magnet . . . attract[ing] aliens

here illegally,’ and to prevent those workers from taking jobs that would otherwise go to

citizens.”). For these reasons, Plaintiffs’ experts’ conclusions are not helpful or

persuasive in balancing the hardships. 

The court finds as a fact that the cost of complying with E-Verify for Plaintiffs and

all other Arizona employers is far less than the wage depression to the poorest Arizona

workers from unauthorized alien labor. This effect on the public interest strongly weighs

in favor of allowing the Act’s continued implementation. Further, as persuasively

detailed by Prof. Borjas, there are other and greater costs to workers from the large

number of unauthorized alien workers in Arizona. An injunction would retreat from a

status quo in which those with the least are getting a fairer chance at a small share of the

prosperity of our Nation. 

C. An Injunction Would Forfeit the Deterrence Already Achieved

There is good reason to think that the Act will significantly stem the increase and

reduce the absolute number of unauthorized alien workers in Arizona. It reduces

employers’ incentive to discriminate against foreign-appearing applicants, as E-Verify

use assures that they are safe in retaining or terminating any new hire. Most frauds are

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 10 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 11 -

easily caught. Unlike IRCA and the I-9 system alone, the Act apparently has a real

deterrent effect. Unauthorized alien workers are more likely to cease their perjured

claims of authorization if they think their efforts will fail. Employers may now accord the

verification process more of the seriousness that Congress originally intended, and even

identity theft may decrease as E-Verify includes photo identification. 

Though no enforcement has begun yet, anecdotal accounts in the press indicate

that pre-enforcement deterrence is occurring; unauthorized aliens are leaving and some

wage levels may be increasing. Of course, anecdotes are not proof of systemic

success—only the future can show that. But an injunction pending appeal would stop the

future before it happens. It would forfeit the momentum of deterrence that the Act

already has achieved. 

D. The Public Interest Favors Learning the Effect of the Arizona

Experiment Before Congress Considers Renewal of E-Verify in

November 2008 

Another factor in the public interest further disfavors an injunction in this case.

Though the Act could survive without E-Verify, that mandatory verification system

greatly aids the Act’s economy and effectiveness, and provides easy avoidance of

liability. The Act directly serves the interests of Congress, which is to experiment with

and refine the employment eligibility verification system. Unless extended, E-Verify’s

authorization will expire in November, 2008. Basic Pilot Program Extension and

Expansion Act of 2003 (“Expansion Act”), Pub. L. No. 108-156, 117 Stat. 1944 (note

following 8 U.S.C. § 1324a (Supp. IV. 2000)). Before then, Congress would benefit from

the experience of Arizona employers under the Act.

V. CONCLUSION

Plaintiffs have shown neither a likelihood of success on the merits nor a balance of

hardships in their favor. An injunction pending appeal is not warranted.

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 11 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 12 -

IT IS THEREFORE ORDERED that the motions for injunction pending appeal

(Doc. ## 181, 182, and 183) are denied.

DATED this 19th day of February, 2008.

Case 2:07-cv-02496-NVW Document 197 Filed 02/19/08 Page 12 of 12