State and Local Restrictions on Employing, Renting Property to, or Providing Services for Unauthorized Aliens: Legal Issues and Recent Judicial Developments
Released: 2010-12-20T00:00:00

Introduction

In recent years, some states and localities have considered, and in a few cases enacted, measures intended to deter the presence of aliens who entered and/or remain in the United States without legal authorization. Typically, these measures have sought to (1) limit the hiring and employment of unauthorized aliens, including through the denial of permits to persons that employ unauthorized aliens and the regulation of day labor centers; (2) restrict the ability of unlawfully present aliens to rent or occupy dwellings within a state or locality's jurisdiction; and/or (3) deny unlawfully present aliens access to state or local services or benefits. More recently, some states have arguably gone further by imposing criminal or civil penalties upon activities that may facilitate unauthorized immigration.

Several such measures have been challenged in court, including on federal preemption and Fourteenth Amendment grounds. Legal challenges brought in federal court concerning restrictions on employment, in particular, have led to conflicting court rulings. In some cases, the relevant state or local measure has been upheld as constitutionally and legally valid. In other cases, the measure has been struck down. In still other instances, the parties have reached a settlement agreement that precludes enforcement of the contested law; the government has repealed the challenged provision; or the presiding court has enjoined the enforcement of the challenged provisions pending trial.

These cases illustrate the difficulties that states and localities face in attempting to regulate the presence and rights of aliens within their jurisdictions in a manner consistent with federal law. Over time, the courts have narrowed the legal bases upon which states and localities may enact legislation affecting aliens. State and local authority to regulate aliens has also been limited, directly or impliedly, by the growing scope of federal immigration law. With the enactment of federal employer sanctions, welfare reform, and other recent immigration laws, Congress has left increasingly few opportunities for states and localities to legislate. Significantly, these laws have not only broadened the substantive regulation of aliens (e.g., employment eligibility), but also established discrete procedures for determining alien eligibility for employment and certain benefits. Perhaps ironically then, even as new state and local measures to deter illegal immigration are motivated in part by a perceived lack of federal enforcement of immigration law, the degree to which states and localities may regulate immigration-related matters has arguably been curbed by the growing breadth of federal immigration law. Conflicting court rulings regarding the permissibility of state and local measures targeting unlawfully present aliens have further contributed to this legal ambiguity. In particular, the U.S. Courts of Appeals for the Third, Ninth, and Tenth Circuits have reached differing conclusions as to whether federal law preempts state or local measures that would require employers within their jurisdiction to use E-Verify, the online federal employment eligibility verification system, to check the work authorization of employees. This term, the Supreme Court is considering the case of Chamber of Commerce v. Whiting , which involves arguments as to whether federal law preempts an Arizona statute that requires employers to use the federal government's E-Verify system to determine the work eligibility of employees and suspends or revokes the business licenses of entities found to have hired unauthorized aliens.

This report discusses the constitutional issues raised by state and local laws intended to deter the presence of unauthorized aliens by limiting their access to housing, employment, and public benefits, as well as the implications that federal civil rights statutes might have for the implementation and enforcement of these laws. It also discusses recent federal court cases addressing the constitutionality of such measures. A separate report, CRS Report R41221, State Efforts to Deter Unauthorized Aliens: Legal Analysis of Arizona's S.B. 1070 , by [author name scrubbed], [author name scrubbed], and [author name scrubbed], discusses state laws that require state and local police to enforce federal immigration law or criminalize conduct that may facilitate unauthorized immigration.

Factual Background

An estimated 37 million foreign-born persons currently reside in the United States, almost a third of whom may be present without authorization. Over the past two decades, the number of aliens who unlawfully reside in the United States has grown significantly, from an estimated 3.2 million in 1986 to a high of more than 11 million in 2008. While this number dropped to 10.8 million in 2009 and the level of unauthorized migration into the United States has declined in recent years, some states and localities, concerned about the perceived negative effects of illegal immigration, have enacted measures intended to deter the presence of unauthorized aliens within their jurisdiction.

Since early 2006, some states and localities have considered legislation that would (1) limit the hiring and employment of unauthorized aliens, including through the denial of permits to persons that employ unauthorized aliens and the regulation of day labor centers; (2) restrict the ability of unlawfully present aliens to rent or occupy dwellings within a state or locality's jurisdiction; and/or (3) deny unlawfully present aliens access to state or local services or benefits. Although local measures to restrict unlawfully present aliens' access to employment or housing have received considerable attention, relatively few of the measures reportedly introduced appear to have been enacted. State action on these matters has arguably been more significant, with several states adopting measures that restrict employers from hiring or employing unauthorized aliens or aliens' eligibility for public benefits. No state appears to have enacted legislation specifically barring unlawfully present aliens from renting private dwellings, although such measures have been enacted by some localities.

Relevant Immigration-Related Legal Issues

State or local restrictions upon unlawfully present aliens' access to employment or housing and eligibility for public benefits have been challenged upon various grounds. Among other things, plaintiffs challenging such restrictions have alleged that they: (1) are preempted by federal immigration law and thus unenforceable by federal or state courts; (2) deprive persons of equal protection of the law in violation of the Fourteenth Amendment to the U.S. Constitution; and/or (3) deprive persons of property or liberty interests without providing them due process of law in violation of the Fourteenth Amendment.

The following sections describe the legal concepts of preemption, equal protection, and procedural due process in more detail, particularly as they may apply to state and local regulation of unlawfully present aliens within their jurisdiction.

Preemption

The doctrine of preemption derives from the Supremacy Clause of the Constitution, which establishes that federal law, treaties, and the Constitution itself are "the supreme Law of the Land." Thus, one essential aspect of the federal structure of government is that states can be precluded from taking actions that are otherwise within their authority if federal law is thereby thwarted. "States cannot, inconsistently with the purpose of Congress, conflict or interfere with, curtail or complement, the federal law, or enforce additional or auxiliary regulations." An act of Congress may preempt state or local action in a given area in any one of three ways: (1) the statute expressly states preemptive intent (express preemption); (2) a court concludes that Congress intended to occupy the regulatory field, thereby implicitly precluding state or local action in that area (field preemption); or (3) state or local action directly conflicts with or otherwise frustrates the purpose of the federal scheme (conflict preemption). The delineation between these categories, particularly between field and conflict preemption, is not rigid.

The power to set rules for which aliens may enter and remain in the United States is undoubtedly federal, and the breadth and detail of regulation Congress has established in the Immigration and Nationality Act (INA) of 1952, as amended, precludes substantive state regulation concerning which noncitizens may enter or remain. With the INA, Congress established a comprehensive framework to regulate the admission and removal of aliens, as well as the conditions of aliens' continued presence in the United States. Later, Congress enacted the Immigration Reform and Control Act (IRCA) of 1986, which amended the INA to establish a system to combat the employment of unauthorized aliens. The Supreme Court has characterized this system as "central to the policy of immigration law." On the one hand, the INA sets forth various categories of legal aliens and grants certain rights to aliens falling within those categories. On the other hand, the INA establishes an enforcement regime to deter the unlawful presence of aliens, including through the use of employer sanctions, criminal and/or civil penalties, and deportation.

Nevertheless, the Supreme Court has 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 this constitutional power, whether latent or exercised." In the 1976 case of De Canas v. Bica , the Court held that state regulation of matters within their jurisdiction that were only tangentially related to immigration would, "absent congressional action[,] ... not be an invalid state incursion on federal power." The Court further indicated that field preemption claims against state action that did not conflict with federal law could only be justified when the "complete ouster of state power ... was the clear and manifest purpose of Congress." Still, the De Canas Court recognized that, even in situations where federal immigration law "contemplates some room for state legislation," a state measure might nonetheless be unenforceable on conflict preemption grounds if it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress in enacting the INA."

Equal Protection

The Equal Protection Clause of the Fourteenth Amendment provides that no state shall "deny to any person within its jurisdiction the equal protection of the laws." However, being entitled to "equal protection" does not mean that persons are entitled to "equal treatment," and not all classifications distinguishing between persons are invalid under the Equal Protection Clause. Generally, the standard of judicial review applied to state and local laws that treat different categories of persons differently—the "rational basis" test—is highly deferential to the government. Under this test, persons challenging the constitutionality of a law must show that it is not rationally related to a legitimate government interest. In contrast, if a distinction disadvantages a "suspect class" or relates to a "fundamental right," a reviewing court will apply "strict scrutiny." Under strict scrutiny, the state or locality must demonstrate that the distinction is justified by a compelling government interest. Other tests falling between rational basis review and strict scrutiny have also been applied on occasion, depending upon the nature of the classifications involved.

All persons in the United States are entitled to equal protection under the Fourteenth Amendment, and states are limited in the degree to which they may restrict persons' rights and privileges because they are unauthorized aliens. In the 1982 case of Plyler v. Doe , the Supreme Court held that a Texas statute that would have prohibited students who were unauthorized aliens from receiving free public elementary and secondary education violated the Constitution. The Court first determined that the Equal Protection Clause of the Fourteenth Amendment protects unlawfully present aliens. Then, finding that unauthorized immigrants are not a "suspect class" and education is not a "fundamental right," but also sensitive to the hardship that could result to a discrete class of children who were not accountable for their being present in the United States without authorization, the Court evaluated the Texas statute under an "intermediate" standard of review, requiring that the statute further a "substantial state interest." Ultimately, it found that none of the interests alleged by the state as justifications for the statute—which included conserving the state's educational resources, preventing an influx of illegal immigrants, and maintaining high-quality public education—constituted such an interest. As a result, the Court struck down the Texas statute.

Procedural Due Process

The Fourteenth Amendment provides that no state may "deprive any person of life, liberty, or property, without due process of law." The Supreme Court has long recognized that the Due Process Clause contained in the Fifth and Fourteenth Amendments "applies to all 'persons' within the United States, including aliens, whether their presence here is lawful, unlawful, temporary, or permanent."

Procedural due process operates to ensure that states and localities do not arbitrarily interfere with certain key interests (i.e., life, liberty, and property). However, procedural due process rules are not meant to protect persons from the deprivation of these interests, per se . Rather, they are intended to prevent the " mistaken or unjustified deprivation of life, liberty, or property" by ensuring that states and localities use fair and just procedures when taking away such interests. The type of procedures necessary to satisfy due process can vary depending upon the circumstances and interests involved. In Mat hews v. Eldridge , the Supreme Court announced the prevailing standard for assessing the requirements of due process, finding that:

Identification of the specific dictates of due process generally requires consideration of three distinct factors: first , the private interest that will be affected by the official action; second , the risk of erroneous deprivation of such interest through the procedures used, and probable value, if any, of additional or substitute procedural safeguards; and finally , the Government's interest, including the function involved and the administrative and fiscal burdens that the additional or substitute procedural requirements would entail.

Although the requirements of due process may vary depending on the particular context, states and localities must provide persons with the ability to contest the basis upon which they are to be deprived of a protected interest. This generally entails notice of the proposed deprivation and a hearing before an impartial tribunal. Additional procedural protections, such as discovery of evidence or an opportunity to confront adverse witnesses, may also be required in certain circumstances to minimize the occurrence of unfair or mistaken deprivations of protected interests.

The procedural protections of the Due Process Clause apply only to direct government action that deprives a person of a protected interest. They "do[] not apply to the indirect adverse effects of governmental action." While persons who are indirectly affected by government action may, in some cases, possess a legal cause of action against the government or another party, this cause of action generally would not be based upon a procedural due process claim.

Issues Raised by State or Local Restrictions on the Employment of Unauthorized Aliens

The ability of states and localities to restrict the hiring or employment of unauthorized aliens may depend upon the form that those restrictions take, although any such restrictions could potentially be subject to preemption and procedural due process challenges.

Preemption

With IRCA, Congress amended the INA to establish a comprehensive federal scheme regulating the employment of unauthorized aliens. Section 274A of the INA generally prohibits the hiring, referring, recruiting for a fee, or continued employment of aliens who lack legal authorization to work in the United States. Violators may be subject to cease and desist orders, civil monetary penalties or, in the case of serial offenders, criminal fines and/or imprisonment for up to six months. Subsection (h)(2) of INA § 274A, in particular, 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 employment, unauthorized aliens.

This provision means that states and localities cannot constitutionally enact measures that would impose "civil or criminal sanctions"—other than through "licensing and similar laws"—upon employers of unauthorized aliens.

Neither "civil or criminal sanctions" nor "licensing and similar laws" is defined by IRCA. However, courts have found that state and local measures creating a private right of action against employers who discharge authorized workers while retaining unauthorized workers impose civil sanctions and are expressly preempted. They have also found that "licensing and similar laws" include laws pertaining to the issuance of business licenses, not just those pertaining to the issuance of professional licenses. Such laws have, thus, been found not to be expressly preempted, although they could potentially be impliedly preempted, as discussed below. The "inclusion of an express pre-emption clause does not bar the ordinary working of [implied] pre-emption principles," and measures that fall within the savings clause of an express preemption provision could still potentially be found unconstitutional either because Congress has evidenced an intent to occupy the field or because the state or local enactment conflicts with or otherwise frustrates the purpose of federal law. It is also possible that state and local measures could be found to be expressly preempted if they would sanction employers who purportedly employ unauthorized aliens, but have not been found by federal authorities to have violated the INA. However, most courts to date appear to have addressed this as conflict preemption, rather than express preemption.

In determining whether state and local measures targeting employers of unauthorized aliens through "licensing and similar laws" are constitutional, courts generally apply a presumption against preemption because the regulation of employment has traditionally been within states' police powers. This presumption appears to apply even though federal regulation of the employment of unauthorized aliens expanded significantly with the enactment of IRCA. As the Third Circuit recently noted:

We are aware, of course, that the landscape of federal immigration law has changed dramatically since the Court decided De Canas . In enacting IRCA, Congress clearly made the regulation of the employment of unauthorized aliens a central concern of federal immigration policy. However, while this sea change in the federal regulatory scheme is incredibly important for purposes of our substantive analysis, it does not negate the operation of the presumption against pre-emption. The applicability of the presumption turns on a state's historic police powers. By definition, that means that the presumption depends on the past balance of state and federal regulation, not the present.

Notwithstanding this presumption, depending upon their terms and the jurisdiction of any reviewing courts, state or local measures could still potentially be found to be impliedly preempted. The "pervasiveness" of the INA's provisions regarding employment of unauthorized aliens could potentially lead a court to find that Congress has preempted the field. However, the exclusion of "licensing and similar laws" from the express preemption of INA § 274A(h)(2) could perhaps be said to indicate that Congress has not evidenced an intent to wholly occupy the regulatory field with respect to alien employment, and, thus far, few courts have found that state or local restrictions on the employment of unauthorized aliens are precluded on field preemption grounds.

Conflict preemption, in contrast, has been the primary focus of parties' arguments and judicial analysis to date. State and local measures could potentially be found to be unconstitutional on conflict preemption grounds if their requirements can be characterized as inconsistent or incompatible with federal law. Preemption challenges might, thus, be raised against state or local measures that (1) establish standards independent from those contained in the INA for determining whether a person has employed an unauthorized alien, and impose sanctions upon persons who violate these standards; (2) rely on state or local determinations that employers have violated the INA requirements concerning work eligibility, instead of relying upon federal determinations; (3) establish state and local procedures for verification of employees' work eligibility that differ from federal procedures (e.g., giving employers less time to resolve the status of an employee whose eligibility has been questioned than is provided for in federal law); (4) sanctioning persons for employing unauthorized aliens using a lower scienter (i.e., degree of awareness) threshold than provided for in federal law; or (5) imposing verification requirements upon persons who would not qualify as "employers" under federal law. However, it should be noted that not all differences between state and local measures and federal law would necessarily constitute grounds for finding conflict preemption, and reviewing courts could potentially interpret the relevant provisions of federal law differently in determining whether state and local measures are preempted on conflict grounds.

Courts have, for example, reached differing conclusions as to the constitutionality of state and local measures requiring employers to use E-Verify, the online federal employment eligibility verification system, to check the work authorization of employees, because of their differing interpretations of federal law. The U.S. Court of Appeals for the Third Circuit has held that such measures are preempted on conflict grounds because, when Congress enacted the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996 and established the pilot program that developed into E-Verify, it expressly prohibited the Secretary of Homeland Security from "requir[ing] any person or other entity to participate" in the program. Because of this prohibition, the Third Circuit found that state and local measures requiring the use of E-Verify conflict with federal law and frustrate congressional intent regarding the use of E-Verify. In contrast, the U.S. Courts of Appeals for the Ninth and Tenth Circuits have found that state and local measures requiring use of E-Verify are not conflict preempted because Congress intended for E-Verify to be used widely and/or did not prohibit states and localities from requiring the use of E-Verify. The Supreme Court heard oral arguments on this issue, as well as whether measures that would suspend or revoke the licenses of businesses that hire unauthorized aliens are preempted, this term.

Additionally, even when state or local measures requiring employers to verify the work authorization of employees mirror the specific provisions of federal law, there is also the possibility that these measures could nonetheless be found to be preempted on conflict grounds if the broader policies they would promote are inconsistent with federal policies, or if the proliferation of similar local measures would have effects that are inconsistent with federal policies. The Third Circuit, in particular, recently found that the federal verification requirements established in IRCA reflect a deliberate balancing by Congress of policies relating to (1) deterring undocumented immigration (through the imposition of sanctions upon employers who hire unauthorized aliens); (2) minimizing the burdens imposed upon employers by the employment verification process; and (3) protecting aliens who are authorized to work and others who might be perceived as "foreign" from discrimination. It thus found that a local verification requirement, which it viewed as imposing additional burdens upon employers and which failed to provide its own protections against discrimination, was conflict preempted because it promoted deterrence over minimizing the burdens on employers and preventing discrimination. While the ordinance in question also diverged from federal law in its requirements, the Third Circuit's view that Congress intended all three policies to be promoted equally when it enacted IRCA could, if widely adopted, potentially lead courts to strike down state and local verification requirements that do not conflict with federal law in their provisions regarding deterrence, but that do not include protections against discrimination. Similarly, state or local measures could also be found to be conflict preempted if a court determines that the enactment of similar measures by other jurisdictions would have effects that are inconsistent with federal policy. It is also possible that a statute which is not unconstitutional on its face could be found to be unconstitutional as applied.

Moreover, there is the possibility that, because of its terms, a state or local measure could be found to constitute a "regulation of immigration," rather than a regulation affecting aliens. In De Canas , the Supreme Court noted that while the latter may be permissible, the former is always preempted because the power to regulate immigration is exclusively federal. Some plaintiffs and commentators have asserted that state and local licensing and/or verification requirements constitute impermissible regulations of immigration because they would deter the employment of aliens, and persons generally cannot enter or remain in the United States without the ability to earn a livelihood. Courts have, thus far, declined to adopt this reasoning, and may be unlikely to do so given the precedent of De Canas . The De Canas Court rejected arguments that a California statute restricting the employment of unlawfully present aliens was per se preempted as a regulation of immigration, and instead suggested that states and localities could have legitimate interests in restricting employment of unauthorized aliens within their jurisdiction. However, the INA's regulation of the employment of aliens has expanded since De Canas was decided, and arguments that licensing and/or verification provisions constitute impermissible regulations of immigration could perhaps be made with more success in future litigation, especially in situations where the state or local measure is not narrowly tailored and/or based on legitimate purposes.

In contrast, state or local regulations prohibiting or establishing day labor centers would, on their face, appear to raise fewer preemption issues. Nothing in federal law addresses day labor centers, much less expressly preempts state or local measures concerning them, and both zoning and employment matters are within states' historical police powers. Moreover, certain restrictions upon the operation of day labor centers, in particular, could plausibly be characterized as targeting "essentially local problems" and tailored to "combat effectively the perceived evils," as would appear to be permitted under De Canas . Depending upon their implementation, however, particular state or local measures could potentially be subject to preemption challenges on an as-applied basis. Restrictions upon day labor centers or solicitations of or by day laborers could also raise other constitutional issues that are outside the scope of this report, such as infringement of the rights to freedom of speech and association provided for in the First Amendment.

Procedural Due Process

State and local restrictions on the hiring and employment of unauthorized aliens could also be challenged on procedural due process grounds, depending upon the form such restrictions take. If, for example, a state or locality revoked the business permit of an entity that employed or hired unauthorized aliens, the employer's interests under the Due Process Clause would be implicated. The granting of a business license can accord the licensee a property interest that may not be revoked unless certain procedural due process requirements are met, although no such property interest exists which guarantees the issuance of a license. Additionally, the liberty interest protected by the Due Process Clause extends to the "right of the individual to contract, to engage in any of the common occupations of life," and this interest would appear to be abridged by state and local measures penalizing employers on account of the employment contracts they enter.

State and local measures could be found unconstitutional if they fail to provide employers with the ability to contest the basis upon which they are to be deprived of protected property or liberty interests. This would generally entail notice of the proposed deprivation and a hearing before an impartial tribunal, during which they could challenge state or local findings regarding their employment practices. Additional procedural protections could potentially also be required. However, based upon the case law to date, employers would not necessarily be found to have been denied procedural due process if the state or local measure does not (1) provide employers with guidance on how to determine employees' work eligibility; (2) give employers the opportunity to review the contents of any third-party complaints against them which trigger state or local investigations; or (3) afford the employer a chance to contest, before state or local officials, any federal determinations that an employee is not authorized to work. State and local measures that provide employers with procedural protections similar to those accorded to businesses by the federal government under INA § 274A may be more likely to withstand a procedural due process challenge than those measures that do not.

Issues Raised by State or Local Restrictions upon Tenancy or Dwelling

State and local measures barring unlawfully present aliens from renting or occupying private dwellings raise issues under both the preemption doctrine and the Fourteenth Amendment. These issues are, however, potentially more significant than those raised by state or local restrictions on employment because denial of housing can be seen as a regulation of immigration.

Preemption

State or local measures barring unlawfully present aliens from renting or occupying private dwellings within the jurisdiction could be susceptible to preemption challenges. Some have argued that such measures constitute impermissible "regulation of immigration" and are thus, per se , preempted. The De Canas Court described a "regulation of immigration" as one that attempts to determine "who should and should not be admitted into the country, and the conditions under which a legal entrant may remain," and at least one court has noted that it is "difficult to conceive of a more effective method of ensuring that persons do not enter or remain in a locality than by precluding their ability to live in it." Some courts have found that state or local measures constitute impermissible regulations of immigration because they classify persons using their own categories, instead of those used in the INA, when determining which aliens may rent housing, and/or they rely upon state or local personnel to determine individuals' immigration status. Other courts have found that such measures are impermissible regulations of immigration because denying persons an abode is tantamount to denying them permission to remain in the country. This argument might have less force in situations where the state or local measure relies on federal classifications and authorities in determining eligibility. However, the potential effects of similar restrictions in other areas could raise additional concerns.

Even if state or local measures barring unlawfully present aliens from renting or occupying private dwellings do not constitute regulations of immigration that are, per se , preempted, they could still be found to be unconstitutional because of field or conflict preemption. The INA, particularly its provisions regarding harboring, could potentially be seen as preempting the field. Section 274 of the INA criminalizes various activities relating to the bringing in and harboring of aliens who are not authorized to enter or remain in the United States, as well as certain other activities related to the transportation of unlawfully present aliens or the encouragement or inducement of unlawfully present aliens to reside in the United States. Courts have generally interpreted this provision broadly, and it could be construed to cover renting property to an illegal alien or otherwise permitting him to dwell in a residence, at least when it is done in knowing or reckless disregard of the alien's illegal status. There is also the possibility of conflict preemption because of the broad discretion that the federal government has regarding which aliens to remove and/or the burden that state or local verification requirements would place on the federal government. Imposing burdens on aliens whose unauthorized presence the federal government has declined to sanction could be said to frustrate the federal scheme, as could "requiring" the federal government to devote resources to activities based upon state or local—as opposed to federal—priorities.

Equal Protection

State or local measures could also potentially be challenged on the grounds that they deprive prospective tenants, in particular, of equal protection in violation of the Fourteenth Amendment, although the outcome of such challenges remains somewhat uncertain, at least where no U.S.-born children of unlawfully present aliens are involved. The degree to which states and localities may restrict persons' ability to obtain private housing on account of alienage remains unsettled. As early as 1886, the Supreme Court recognized that the Equal Protection Clause applied to state classifications based on alienage. Nevertheless, during the early part of the twentieth century, the Supreme Court upheld a number of state laws denying rights and privileges to persons on account of their alienage (regardless of whether such aliens were lawfully present in the United States), in part because states were able to demonstrate a "special public interest" that was advanced through such measures.

However, these decisions came at an earlier period of Fourteenth Amendment jurisprudence, and over time "the [Supreme] Court's decisions gradually have restricted the activities from which States are free to exclude aliens." Although none of the Court's earlier decisions has been expressly overruled, in at least some cases their precedential value has been questioned. Nevertheless, it appears well established, even following the Court's decision in Plyler , that states may impose greater restrictions upon the rights of unauthorized aliens than may be imposed upon citizens or legal immigrants, at least where the direct subjects of regulation are not children. At least one federal district court has found that an ordinance regulating the leasing of housing to unauthorized aliens did not violate the Equal Protection clause because it did not facially discriminate against a suspect class because of race, ethnicity, or national origin, and it was otherwise rationally related to a legitimate government interest in reducing crime by unauthorized immigrants and safeguarding community resources. This decision was not appealed.

In contrast, alienage-based restrictions that directly or indirectly affect the legal rights of those children or spouses of unlawfully present aliens who lawfully reside in the United States might face more significant legal challenges. In the 1948 case of Oyama v. California , the Supreme Court found that a California statute banning alien landholding impermissibly discriminated against the citizen child of an alien, because it required the child to prove that his alien parent did not purchase property in the child's name to circumvent alien ownership restrictions—a burden not imposed upon the children of U.S. citizens. Depending on the manner and scope of a state or local housing restriction on unlawfully present aliens, the measure could trigger an Oyama -like challenge by a U.S. citizen directly or indirectly affected by the rule, such as a citizen child or spouse of an illegal immigrant whose property rights are impaired on account of family membership.

Procedural Due Process

Additionally, state or local measures that would bar unlawfully present aliens from renting or occupying private dwellings could implicate property interests of landlords and/or tenants that are affected by the Due Process Clause. The right to "maintain control over ... [one's] home, and to be free from governmental interference, is a private interest of historic and continuing importance." A government measure requiring the termination of a lease between a property owner and lessee deprives one or both of the parties of several property-related interests, including "the right of sale, the right of occupancy, the right to unrestricted use and enjoyment, and the right to receive rents." In addition, some measures barring persons from leasing real property to unlawfully present aliens are enforced through the imposition of monetary penalties upon offenders. Those who are compelled to pay such fines are deprived of an additional property interest. Ordinances that subject violators to incarceration would also deprive offenders of a liberty interest. State or local measures prohibiting the rental of housing to unlawfully present aliens therefore appear likely to deprive property owners and/or tenants of an interest protected by the Fourteenth Amendment's Due Process Clause. Accordingly, states and localities enacting such measures must provide procedural protections to minimize the occurrence of unfair or mistaken deprivations of protected interests, such as providing landlords with notice and an opportunity for a hearing before suspending their licenses and providing tenants with the opportunity to challenge their designation as unlawfully present.

Issues Raised by State or Local Restrictions on Public Benefits or Services

Some localities have attempted to deter the presence of illegal aliens within their borders via the denial of services and/or benefits. Such denials may be less prone to legal challenges than measures pertaining to employment and housing, partly because such measures appear less likely to raise preemption and equal protection challenges and partly because federal law expressly requires or authorizes states and localities to deny certain benefits to unlawfully present aliens. The outcome of any such challenge thus seems likely to hinge upon the scope of the benefits being denied, as well as whether the state or local measure in question would involve state or local personnel making independent assessments of persons' immigration status when determining whether to deny benefits.

The degree to which states and localities may deny services or benefits based on unlawful presence in the United States remains unclear. During the 1970s and early 1980s, the U.S. Supreme Court decided a series of cases on governmental authority to discriminate against aliens in providing government benefits. Collectively, these cases set forth the following basic constitutional principles: state governments generally cannot discriminate between aliens who are authorized to live here indefinitely and U.S. citizens when setting eligibility requirements for state benefits; states have broader, but still limited, authority to discriminate against aliens who are here without authorization; and the federal government, by contrast, has wide discretion to discriminate both between citizens and legal aliens, as well as between classes of legal aliens.

After these cases were decided, Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which both established a general rule as to which benefits must be denied to aliens unlawfully residing in the United States and delineated which local public benefits must be provided regardless of immigration status. PRWORA prohibits many classes of noncitizens, legal and illegal alike, from receiving assistance. Generally, unlawfully present aliens are denied federal benefits and may qualify for state benefits only under laws passed by the states after the PRWORA's enactment. The class of benefits denied is broad and includes: (1) grants, contracts, loans, and licenses, and (2) retirement, welfare, health, disability, housing, food, unemployment, postsecondary education, and similar benefits. There are, however, exceptions to the aforementioned bars, including exceptions for:

treatment under Medicaid for emergency medical conditions (other than those related to an organ transplant); short-term, in-kind, emergency disaster relief; immunizations against immunizable diseases and testing for and treatment of symptoms of communicable diseases; and services or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelters) designated by the Attorney General as: (i) delivering in-kind services at the community level, (ii) providing assistance without individual determinations of each recipient's needs, and (iii) being necessary for the protection of life and safety.

The PRWORA also expressly bars unlawfully present aliens from most state and locally funded benefits. The restrictions on these benefits parallel the restrictions on federal benefits. As such, unauthorized aliens are generally barred from state and local government contracts, licenses, grants, loans, and assistance. However, states and localities are prohibited from denying benefits and/or services for emergency medical care, disaster relief, and immunizations.

Although federal law has established a general framework as to what services may or may not be denied to unlawfully present aliens, courts have generally yet to weigh in on the issue of when localities may make lawful presence a requirement for services to be made available. Some of the services states and localities may attempt to deny to unlawfully present aliens could include bus tours for senior citizens, leadership training programs for adults, rental and mortgage assistance, drug treatment, health care for the uninsured, access to libraries and parks, and use of day labor centers. Courts will have to interpret how broadly the term "local public benefit" should be interpreted and whether denial of particular benefits is consistent with congressional purpose. This interpretation may depend on which services can be construed as encouraging illegal immigration. While services such as health care for the uninsured or rental assistance arguably fall within the purview of "local public benefit," others such as access to parks or libraries are less clear cut. Implementation of the denial of services to unlawfully present aliens could also raise issues, particularly if state or local personnel would determine alien eligibility for benefits by means other than that provided for in federal law.

Potential Limitations Imposed by Federal Civil Rights Statutes

Some state and local measures restricting the hiring or housing of unauthorized aliens could also potentially conflict with existing federal anti-discrimination laws. Under Title VII of the Civil Rights Act, employers are prohibited from discriminating on the basis of race, color, religion, sex, or national origin. The Supreme Court has ruled that, with respect to Title VII, "the term 'national origin' does not embrace a requirement of United States citizenship." In reaching this result, the Court reasoned that national origin refers to the country in which someone is born or from which his or her ancestors came. Because individuals who share the same national origin do not necessarily share the same citizenship status, the Court determined that Title VII's prohibition on national origin discrimination does not necessarily make it illegal for employers to discriminate on the basis of citizenship status or alienage. Any state or local measure restricting the hiring or employment of unauthorized aliens must comply with Title VII requirements. Thus, for example, a local ordinance that authorized the enforcement of an employment complaint that alleged violations solely on the basis of an employee's race or national origin would not be legally enforceable.

However, it is possible that an ordinance restricting the employment of unauthorized aliens could, when implemented, encourage violations of Title VII in situations where discrimination on the basis of citizenship would have the purpose or effect of discriminating on the basis of national origin. For example, employers who are concerned about inadvertently hiring unlawful workers may become reluctant to hire individuals from certain ethnic backgrounds, and such reluctance could have the unlawful effect of discriminating on the basis of national origin. In other cases, an employer might use a citizenship test as a pretext to disguise what is in fact national origin discrimination. As the Court has noted, "Title VII prohibits discrimination on the basis of citizenship whenever it has the purpose or effect of discriminating on the basis of national origin." In an effort to comply with such ordinances, therefore, some employers may engage in practices that could give rise to legal challenges under Title VII.

Like Title VII, the Fair Housing Act (FHA) prohibits discrimination in the sale or rental of housing on a number of grounds, including national origin. In the housing context, as in the employment context, courts have found that citizenship discrimination does not automatically constitute national origin discrimination under the FHA, although they have held that the FHA would prohibit citizenship discrimination if such discrimination had the purpose or effect of discriminating on the basis of national origin. As a result, any state or local measure that authorizes the enforcement of housing complaints based solely on the national origin of a dwelling's inhabitants would be impermissible. Further, if landlords who are attempting to comply with an ordinance barring the tenancy of unlawfully present aliens engage in national origin discrimination, then such actions may give rise to legal challenges under the FHA.

Thus far, only one federal court appears to have directly addressed whether a local ordinance intended to deter the housing of unlawfully present aliens constitutes a violation of the FHA. In Lozano v. City of Hazleton , the district court dismissed the plaintiffs' facial challenge, concluding that the plaintiffs had failed to show that there was no set of circumstances under which the ordinance would be valid. The court did, however, leave the door open to a possible "as applied" challenge to the local ordinances in question, noting, "Because the statutes have not yet gone into effect, we cannot know whether they would have the discriminatory effect that plaintiffs claim." The plaintiffs did not appeal.

It is also possible that an employment or housing ordinance aimed at unauthorized aliens could give rise to violations of 42 U.S.C. § 1981. This provision, which was originally enacted as part of the Civil Rights Act of 1870, states that:

All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.

Although the Supreme Court has held that an alien is a "person" for purposes of § 1981, the Court has not addressed whether unauthorized aliens are encompassed within the statute's definition of "person." The Court, however, has held that unauthorized aliens are "persons" in the context of the Fourteenth Amendment, and, therefore, might be inclined to make a similar finding with respect to the definition of "person" under § 1981. If unauthorized aliens are protected from discrimination by governmental actors under the statute, then states or localities that pass employment or housing ordinances aimed at unauthorized aliens may be liable for violations of § 1981. Indeed, a federal district court held in the Lozano case that a local ordinance intended to deter the employment and housing of unauthorized aliens was a violation of § 1981. The Third Circuit did not address this issue on appeal.

In addition, although the Supreme Court has held that § 1981 prohibits alienage discrimination by governmental actors, the Court has never addressed the question of whether § 1981 bars alienage discrimination by private actors. Until 1991, when Congress amended § 1981, the federal courts of appeals that had considered the issue were split with regard to this question. Since the amendments to § 1981, some courts have confirmed that the statute applies to private discrimination against aliens. As a result, it is possible, but not certain, that a court might find that an employer or landlord who, in complying with a state or local measure, refused to employ or rent to an unauthorized alien was in violation of § 1981.

Recent Developments in Arizona

The State of Arizona has enacted several measures that place it in the vanguard of recent attempts to test the legal limits of state and local measures intended to deter unauthorized immigration. The Legal Arizona Workers Act of 2007 would, among other things, require employers to use E-Verify to check the work authorization of employees and suspend or revoke the licenses of employers found to have hired unauthorized aliens. It has been challenged by several parties on various grounds, including that it is preempted by federal law and deprives employers of due process. Its E-Verify and licensing provisions, in particular, have been upheld by the district court and the U.S. Court of Appeals for the Ninth Circuit. The plaintiffs appealed to the Supreme Court, which granted certiorari. Oral arguments in the case were heard on December 8, 2010, on the issue of whether these provisions are expressly or impliedly preempted.

More recently, Arizona has arguably gone further in seeking to deter the presence of unauthorized aliens by enacting a measure in April 2010 that is commonly referred to as S.B. 1070. In addition to requiring state and local police to facilitate the detection of unauthorized aliens in their daily enforcement activities, S.B. 1070 would also criminalize certain conduct that may help bring about the presence of unlawfully present aliens within the state, including: willful failure to complete or carry an alien registration document; certain activities relating to the transport or harboring of unlawfully present aliens; and the application for, solicitation of, or performance of work within the state by unauthorized aliens. A federal district court has enjoined enforcement of many provisions of S.B. 1070—including those requiring state and local law enforcement to attempt to ascertain the immigration status of certain persons within their custody reasonably suspected to be unlawfully present—in response to the federal government's suit alleging that these provisions are preempted. A decision on the merits in this suit is still pending, as is the State of Arizona's appeal to the Ninth Circuit of the district court's grant of a preliminary injunction barring enforcement of many provisions of S.B. 1070. Private parties have also filed suit challenging S.B. 1070, including on the grounds that it would "cause widespread racial profiling." For more on S.B. 1070 see CRS Report R41221, State Efforts to Deter Unauthorized Aliens: Legal Analysis of Arizona's S.B. 1070 , by [author name scrubbed], [author name scrubbed], and [author name scrubbed].