CoreCivic Inc v. Governor of New Jersey

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 23-2598

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CORECIVIC, INC.

v.

GOVERNOR OF NEW JERSEY; ATTORNEY GENERAL

OF NEW JERSEY,

Appellants

_______________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 3:23-cv-00967)

District Judge: Honorable Robert Kirsch

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Argued: May 1, 2025

Before: KRAUSE, BIBAS, and AMBRO, Circuit Judges

(Filed: July 22, 2025)

Jeremy Feigenbaum [ARGUED]

Nathaniel I. Levy

Michael L. Zuckerman

NEW JERSEY ATTORNEY GENERAL’S OFFICE

25 Market Street

Richard J. Hughes Justice Complex

P.O. Box 112

Trenton, NJ 08625

Counsel for Appellants

Alex Hemmer

ILLINOIS ATTORNEY GENERAL’S OFFICE

SOLICITOR GENERAL’S OFFICE

115 S. LaSalle Street, 23rd Floor

Chicago, IL 60603

Counsel for Amici States of Illinois, Colorado, Connecti-

cut, Delaware, Maine, Maryland, Massachusetts, Michi-

gan, Minnesota, Nevada, New York, Oregon, and Washing-

ton, and the District of Columbia in Support of Appellants

Farrin R. Anello

Molly K.C. Linhorst

AMERICAN CIVIL LIBERTIES UNION OF NEW JERSEY

P.O. Box 32159

Newark, NJ 07102

2

Counsel for Amici AAPI New Jersey, American Civil Lib-

erties Union of New Jersey, American Friends Service

Committee, Bayard Rustin Center for Social Justice, Bend

the Arc Jewish Action, Deportation & Immigration Re-

sponse Equipo, Detention Watch Network, El Pueblo

Unido of Atlantic City y Pueblos Cercanos, Faith in New

Jersey, First Friends of New Jersey and New York, Latina

Civic Action, Latino Action Network, Latino Coalition of

New Jersey, LatinoJustice PRLDEF, Law Enforcement Ac-

tion Partnership, Lazos America Unida, Make the Road

New Jersey, New Jersey Alliance for Immigrant Justice,

New Jersey Consortium for Immigrant Children, New Jer-

sey Parents Caucus, Inc., New Jersey Policy Perspective,

New Labor, Northern New Jersey Sanctuary Coalition, Re-

formed Church of Highland Park, Truah Rabbinic Call for

Human Rights, Unitarian Univeralist FaithAction New

Jersey, Volunteer Lawyers for Justice, and Wind of the

Spirit Immigrant Resource Center in Support of Appellants

David N. Cinotti

Dominique Kilmartin

Brendan M. Walsh

PASHMAN STEIN WALDER HAYDEN

21 Main Street

Court Plaza South, Suite 200

Hackensack, NJ 07601

Counsel for Amicus Pax Christi USA in Support of Appellant

David J. Goldsmith

Thomas A. Kissane

3

Bradley D. Simon [ARGUED]

SCHLAM STONE & DOLAN

26 Broadway, 19th Floor

New York, NY 10004

Counsel for Appellee

McKaye L. Neumeister [ARGUED]

UNITED STATES DEPARTMENT OF JUSTICE

CIVIL DIVISION, APPELLATE SECTION

950 Pennsylvania Avenue NW, Room 7231

Washington, DC 20530

Counsel for Amicus United States in Support of Appellee

John M. Miano

IMMIGRATION REFORM LAW INSTITUTE

103 Park Avenue, Suite E101

Summit, NJ 07901

Counsel for Amicus Immigration Reform Law Institute in

Support of Appellee

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OPINION OF THE COURT

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BIBAS, Circuit Judge.

Just as the federal government cannot control a state, so too

a state cannot control the federal government. Each is sover-

eign. Each is “protected from incursion by the other.” U.S.

Term Limits, Inc. v. Thornton, 514 U.S. 779, 838 (1995) (Ken-

nedy, J., concurring). But sometimes their authorities overlap.

In such cases, some state rules may legitimately burden the

4

federal government. That is a “normal incident” in a system

with dual sovereigns. North Dakota v. United States, 495 U.S.

423, 435 (1990) (plurality) (cleaned up). Sometimes, though, a

state goes further, interfering directly with federal policy or

“destroy[ing]” it through “hostile legislation.” McCulloch v.

Maryland, 17 U.S. (4 Wheat.) 316, 400–01, 430 (1819). And

when it crosses that line, it violates the Constitution.

New Jersey is on the wrong side of that line. It dislikes

some of the federal government’s immigration tools, so it

passed a law with the “intent” to forbid new contracts for civil

immigration detention. N.J. Stat. Ann. § 30:4-8.15(d). That law

interferes with the federal government’s core power to enforce

immigration laws. Its construction is admittedly clever: It seeks

to sidestep the usual two-prong test that courts use to enforce

the “bedrock principle” that states may not regulate their fed-

eral counterpart. North Dakota, 495 U.S. at 448 (Scalia, J.,

concurring in the judgment). Still, we see the law for what “it

really is”: a direct regulation on the federal government.

McCulloch, 17 U.S. at 431. Because New Jersey’s law violates

intergovernmental immunity, we will affirm the District

Court’s summary judgment for the contractor.

I. NEW JERSEY INTENDED TO BAN

IMMIGRATION DETENTION

Since 1996, CoreCivic has contracted with the federal gov-

ernment to run a private immigration-detention center in Eliz-

abeth, New Jersey. CoreCivic planned to renew its federal con-

tract in 2023, but New Jersey passed a law (AB 5207) forbid-

ding it to do so.

5

Though New Jersey does not want private immigration-

detention centers, the government often relies on them. U.S.

Immigration and Customs Enforcement (ICE) does not build

its own lockups, and it does not operate them alone. Instead, it

contracts with private companies or local governments to help

run them. See 48 C.F.R. § 3017.204-90; 8 C.F.R. § 235.3(e)

(both providing for federal contracting to hold immigrants).

This approach gives ICE the flexibility it needs to increase or

decrease capacity as the number of deportable aliens fluctuates.

Citing its duty to protect human rights and health, New Jer-

sey passed AB 5207 with the express “intent … to prevent new,

expanded, or renewed agreements to detain people for civil

immigration purposes.” N.J. Stat. Ann. § 30:4-8:15(d). The

law bans the state, its local governments, and private parties

from making, renewing, or extending any contract to detain

people for civil immigration violations. § 30:4-8.16(b)(1)–(2).

CoreCivic’s detention-center contract fell prey to that ban.

So CoreCivic sued New Jersey, claiming that AB 5207 violates

the Supremacy Clause because it (1) violates intergovernmental

immunity and (2) is preempted by federal law. Soon after, the

United States filed a statement of interest in the case. See 28

U.S.C. § 517. That is no surprise. Federal law gives the federal

government discretion to find “appropriate places of detention

for aliens detained pending removal.” 8 U.S.C. § 1231(g)(1).

Exercising this discretion, the government has come to rely

on CoreCivic’s detention center as a “mission critical location

for [federal government] and ICE operations nationwide.”

App. 100 ¶ 8. The center is the only one available in New Jersey

“capable of meeting ICE’s requirements,” and its proximity to

6

JFK and Newark Airports makes it “crucial to effect[ing] remov-

als from field offices nationwide.” App. 97 ¶ 28, 100 ¶ 9. With-

out it, the government would have to take detainees to a center

in the middle of Pennsylvania more than 250 miles (and a four-

hour drive) away. Driving that far would tie up officers for “at

least a full day.” App. 100 ¶ 10. It would also gum up ICE’s

flexibility to grow or shrink capacity as the levels and locations

of immigration shift. It could even force ICE to release aliens

with violent criminal records. So the ban would effectively

“cripple [ICE’s] law-enforcement operations in New Jersey

and the surrounding region.” App. 99–100 ¶ 7.

Based on these facts and concerns, the District Court

granted summary judgment for CoreCivic. It thought that

AB 5207 “evades easy classification under a particular branch

of the Supreme Court’s Supremacy Clause jurisprudence.”

App. 18. Still, it saw that the law takes away the federal gov-

ernment’s choice of how to detain aliens, a restriction that it

held violates intergovernmental immunity and is preempted by

federal law. New Jersey now appeals. We review the District

Court’s ruling de novo. Aleynikov v. Goldman Sachs Grp., Inc.,

765 F.3d 350, 357 & n.2 (3d Cir. 2014).

II. THE LAW VIOLATES INTERGOVERNMENTAL IMMUNITY

BY DIRECTLY REGULATING THE FEDERAL GOVERNMENT

Our Constitution created a legal system “establishing two

orders of government, each with its own direct relationship, its

own privity, its own set of mutual rights and obligations to the

people who sustain it and are governed by it.” Thornton, 514

U.S. at 838 (Kennedy, J., concurring). But when those orders

conflict, the Supremacy Clause makes federal law “the

7

supreme Law of the Land.” U.S. Const. art. VI, cl. 2. States

remain sovereign, but they are “subordinate to, and may be

controlled by the constitution of the United States.” McCul-

loch, 17 U.S. at 427. From this text spring two doctrines: inter-

governmental immunity and preemption. First, the immunity

doctrine shields the federal government from some state regu-

lations. Second, Congress can extend that immunity further by

passing a federal law to preempt state laws. North Dakota, 495

U.S. at 439–40 (plurality). CoreCivic raises both Supremacy

Clause doctrines, but we need not reach preemption. Even

without preemptive legislation, the law violates intergovern-

mental immunity. Though New Jersey advocates forcefully

and ably for its position, its law directly regulates the federal

government.

A. Intergovernmental immunity shields the federal

government from direct or discriminatory state

regulation

Because federal law is supreme, “there is a plain repug-

nance” in letting states “interfer[e] with or control[ ] the oper-

ations of the Federal Government.” McCulloch, 17 U.S. at 431;

United States v. Washington, 596 U.S. 832, 838 (2022). As

McCulloch recognized, “the very essence of supremacy” empow-

ers the federal government to “remove all obstacles to its action

within its own sphere … [and] exempt its own operations from

[state] influence.” 17 U.S. at 427.

To enforce this core principle, known as intergovernmental

immunity, modern courts apply a two-pronged test: States can-

not “[1] regulate the United States [government] directly or

[2] discriminate against” it or its contractors. Washington, 596

8

U.S. at 838 (cleaned up). A state law regulates the United

States directly when it “places [either] a prohibition” or man-

date on the federal government. Hancock v. Train, 426 U.S.

167, 180 (1976); see also Arizona v. California, 283 U.S. 423,

451 (1931) (“The United States may perform its functions

without conforming to the police regulations of a state.”).

Meanwhile, a state law discriminates against the federal gov-

ernment when it “treats similarly situated state and federal

[actors] differently” in a way that cannot be explained by “sig-

nificant differences[s]” between the two. Dawson v. Steager,

586 U.S. 171, 177 (2019) (internal quotation marks omitted).

A state law that violates either prong is invalid unless Congress

has “clearly and unambiguously authorized” it. Washington,

596 U.S. at 840 (cleaned up).

Congress has not authorized state regulations like AB 5207.

But New Jersey claims that the law survives both prongs. It

says the text of the law does not apply to the federal govern-

ment directly. And New Jersey says it does not discriminate

against the federal government because it ties its own hands in

the same way: Its own Department of Corrections cannot hire

private companies to house criminal defendants or convicts.

But we need not decide whether New Jersey is right that it is

a relevant comparator to the federal government or that it in-

deed imposes the same restrictions on itself. Either way, this

law plainly violates the direct-regulation prong.

9

B. Some laws directly regulate the federal government

functionally, even if not literally

AB 5207 falls because it directly regulates the federal gov-

ernment. But to get there, we must first sketch out the contours

of the direct-regulation prong.

New Jersey contends that a law regulates the federal gov-

ernment directly only if the law’s text applies to it. Applying

that test, New Jersey claims that it has not directly barred the

federal government from doing anything. The text of AB 5207

applies only to the state, its municipalities, and private contrac-

tors (the sellers of the contracting service), not to the federal

government (the buyer). It just so happens that AB 5207 has

the exact same effect as a state law that bars the federal gov-

ernment from contracting for private immigration services. But

New Jersey says this does not matter. The direct-regulation

prong does not concern itself with effects, the state says, even

if functionally AB 5207 directly restricts federal power or sub-

stantially interferes with federal operations. But it is wrong.

AB 5207 carries the same sting as a law whose text applies

expressly to the federal government. And the direct-regulation

prong accommodates that functionalist reading of what is really

going on here.

Intergovernmental immunity is not a formalist doctrine. In

gauging intergovernmental immunity, the Court has long

instructed us to “look through form and behind labels to sub-

stance.” City of Detroit v. Murray Corp. of Am., 355 U.S. 489,

492 (1958). We must probe the “purpose or self-evident oper-

ation of a statute” to see if it is used to evade the limits on im-

munity “by indirectly achieving the same result.” Miller v. City

10

of Milwaukee, 272 U.S. 713, 715 (1927). “[W]hat cannot be

done directly cannot be done indirectly. The Constitution deals

with substance, not shadows.” Students for Fair Admissions,

Inc. v. President & Fellows of Harvard Coll., 600 U.S. 181,

230 (2023) (alteration in original) (quoting Cummings v. Mis-

souri, 71 U.S. (4 Wall.) 277, 325 (1867)).

So the Court has long held that, just as states cannot regu-

late the federal government itself, they cannot regulate private

parties in a way that severely undercuts a federal function.

Osborn v. Bank of U.S., 22 U.S. (9 Wheat.) 738, 786–89, 866–

67 (1824) (noting that states cannot “control” federal opera-

tions by regulating its contractors); Crandall v. Nevada, 73

U.S. (6 Wall.) 35, 44–45 (1867) (explaining that the Court has

“uniformly denied” state regulations that “affect[ ] the func-

tions of the Federal government” or “impede or embarrass the

constitutional operations of that government”); Union Pac. R.

v. Peniston, 85 U.S. (18 Wall.) 5, 30 (1873) (states may not

impose regulations “the direct effect of which shall be to hinder

the exercise of any powers which belong to the National gov-

ernment”).

That anti-interference throughline pervades the caselaw to

this day. Smith v. Davis, 323 U.S. 111, 116 (1944) (upholding

nondiscriminatory tax on federal contractor’s profits because

there was “no basis for assuming that contractors will be any

less willing to enter into construction contracts with the United

States,” and the tax was not “likely to affect or impair in any

way their ability to discharge their duties efficiently”); Graves

v. New York ex rel. O’Keefe, 306 U.S. 466, 481 (1939) (holding

that states may not “impose a burden on the national govern-

ment tantamount to an interference … with the … performance

11

of its functions”); Okla. Tax Comm’n v. Tex. Co., 336 U.S. 342,

364 (1949) (explaining that state regulations on third parties

that “actual[ly] interfere[e] [with] or [have] destructive effects

upon the performance of obligations to or work for the govern-

ment” violate intergovernmental immunity); City of Detroit,

355 U.S. at 495 (upholding non-discriminatory state regulation

on federal contractors because there was “no crippling obstruc-

tion of any of the Government’s functions [and] no sinister

effort to hamstring its power”); United States v. Fresno

County, 429 U.S. 452, 463–64, 463 n.11 (1977) (upholding

neutral state tax on federal employees because it did not

“threaten[ ] to obstruct or burden a federal function,” for instance

“by making the Federal Government unable to hire anyone”);

United States v. New Mexico, 455 U.S. 720, 735 & n.11 (1977)

(upholding neutral tax on federal contractors but noting that “of

course … state taxes on contractors are constitutionally invalid

if they … substantially interfere with [the federal govern-

ment’s] activities”); Davis v. Mich. Dep’t of Treasury, 489

U.S. 803, 814 (1989) (noting that intergovernmental immunity

“protect[s] each sovereign’s governmental operations from un-

due interference by the other”); Washington, 596 U.S. at 838

(reasoning that states may not “interfer[e] with or control[ ] the

operations of the Federal Government”).

Still, New Jersey contends that modern intergovernmental-

immunity doctrine long ago jettisoned this functional, effects-

based test. Our dissenting colleague likewise insists that the

many Supreme Court cases embracing a functional view of

direct regulation have been “rejected over and over.” Dissent

at 12. But they misread the arc of the doctrine. True, there was

a time when the Supreme Court stretched the doctrine to bar

12

state regulation of third parties that imposed even an indirect

or conjectural financial burden on the federal government. See,

e.g., New Mexico, 455 U.S. at 731 (describing mid-nineteenth-

century cases striking down neutral state taxes on federal employ-

ees, contractors, and private parties operating on federal land).

Also true, the Court then corrected course, recognizing that

such an “expansive” doctrine was unmoored “both from [its]

constitutional foundations … and from the actual workings of

our federalism.” Id. (internal quotation marks omitted). So it

pared the doctrine back. See, e.g., James v. Dravo Contracting

Co., 302 U.S. 134, 161 (1937) (upholding non-discriminatory

tax as applied to federal contractor because it did “not interfere

in any substantial way with the performance of federal func-

tions”); Penn Dairies, Inc. v. Milk Control Comm’n, 318 U.S.

261, 269–70 (1943) (upholding milk price controls as applied

to a federal milk supplier because even though the regulation

“increase[d] the price which the government must pay for milk,”

it “impose[d] no prohibition on the national government”).

Yet even as the Court narrowed the doctrine’s applicability

to third parties, it never eroded its anti-interference core. Wash-

ington, 596 U.S. at 838 (describing intergovernmental immun-

ity as “prohibiting States from interfering with or controlling

the operations of the Federal Government”). As the doctrine

stands today, nondiscriminatory state laws are no longer un-

constitutional just because they may remotely affect federal

functions. North Dakota, 495 U.S. at 435 (plurality) (summa-

rizing how the doctrine has coalesced around this principle).

But state laws regulating private parties still violate intergov-

ernmental immunity if they “impose a burden on the national

13

government tantamount to an interference … with the … per-

formance of its functions.” Graves, 306 U.S. at 481.

In short, the modern doctrine distinguishes between laws

that merely impose an incidental economic burden on the fed-

eral government and those that subvert federal operations. The

latter trigger immunity; the former do not. See Taber v. Indian

Territory Illuminating Oil Co., 300 U.S. 1, 3–4 (1937) (distin-

guishing a “nondiscriminatory” regulation “where there is only

a remote, if any, influence upon the exercise of governmental

functions” from “one which imposes a direct burden upon the

exertion of governmental powers”); Pub. Utils. Comm’n v.

United States, 355 U.S. 534, 543–44 (1958) (collecting cases

and distinguishing between “nondiscriminatory state taxes on

activities of contractors … who do business for the United

States, as their impact at most is to increase the costs of the

operation” and state laws that “place[ ] a prohibition on the

Federal Government” by regulating third-party activity); see

also GEO Grp., Inc. v. Newsom, 50 F.4th 745, 755 (9th Cir.

2022) (en banc) (noting this material distinction).

Still, the dissent and New Jersey insist that the Supreme

Court has since collapsed this distinction between mere bur-

dens and substantial subversion. New Jersey, for its part, leans

on Washington, which it claims embraced a hyper-formalist

version of direct regulation. But Washington was a discrimina-

tion case, so it did not consider, and had no occasion to con-

sider, the bounds of direct regulation. 596 U.S. at 839. And we

presume that the Court does not “overturn, or so dramatically

limit, earlier authority sub silentio.” Shalala v. Ill. Council on

Long Term Care, Inc., 529 U.S. 1, 18 (2000).

14

New Jersey and the dissent also point to Penn Dairies for

the same point but misread its holding. That case rejected a

challenge to Pennsylvania’s neutral price controls on milk

because the law “at most … increase[d] the costs of [federal]

operation[s]”; it “impose[d] no prohibition” on the federal gov-

ernment. Pub. Utils. Comm’n, 355 U.S. at 543–44 (quoting

Penn Dairies, 318 U.S. at 270). So Penn Dairies said nothing

about the fate of regulations that functionally bar the federal

government from doing something.

But the Supreme Court has since spoken on that issue. It

has explained that the Supremacy Clause does not “bar[ ] all

state regulation which may touch the activities of the Federal

Government.” Hancock, 426 U.S. at 179 (citing Penn Dairies,

318 U.S. at 269–70). But it does draw a line at those that

“place[ ] a prohibition on the Federal Government.” Id. (quot-

ing Pub. Utils. Comm’n, 355 U.S. at 544); see McHenry

County v. Raoul, 44 F.4th 581, 592 (7th Cir. 2022) (drawing

this same distinction). And as we discuss in more detail below,

it has applied that rule to hold that certain state regulations on

federal contractors can effectively “place[ ] a prohibition on the

Federal Government,” thus violating intergovernmental immun-

ity. Pub. Utils. Comm’n, 355 U.S. at 544.

Without Penn Dairies, New Jersey and the dissent are left

to lean on the Supreme Court’s plurality opinion in North Da-

kota. They claim that it persuasively rejected an approach to

intergovernmental immunity focused on substantial interfer-

ence and control. Yet “only the result of North Dakota is bind-

ing.” GEO Grp., 50 F.4th at 759. And even taking the plural-

ity’s reasoning on its own terms, the case is inapt. North Da-

kota addressed whether state reporting and labeling

15

requirements for out-of-state liquor suppliers could be applied

to those supplying liquor to a military base. Crucially, those

regulations did “not restrict the parties from whom the Gov-

ernment may purchase liquor or its ability to engage in com-

petitive bidding,” nor did they “require the military to submit

to state control or to purchase alcoholic beverage from suppli-

ers within the State or prescribed by the State.” 495 U.S. at 441,

443. Instead, those regulations “at worst raise[d] the costs of

selling to the military,” thereby indirectly making it slightly

“more costly for the Government to do its business.” Id. at

434, 441.

True, as our dissenting colleague points out, these descrip-

tions of the law’s minimal burden on the federal government

come from the plurality’s preemption analysis. But that makes

them no less factually accurate. And those facts informed the

intergovernmental-immunity question as much as the preemp-

tion one. The plurality concluded that, like the price controls at

issue in Penn Dairies, North Dakota’s restrictions “regulate[d]

federal activity [only] in the sense that they ma[d]e it more

costly for the Government to do its business.” Id. at 434. Con-

sistent with Penn Dairies, it found that mere economic burden

insufficient to trigger intergovernmental immunity. Id. at 437.

To be sure, the plurality was also wary of adopting an approach

that would invalidate “every state regulation that in any way

touched federal activity,” as the dissent points out. Id. at 437

n.8. But it simply did not have occasion to pass on the validity

of state laws, like New Jersey’s, that do much more than touch

federal activity. So it did not foreclose finding direct regulation

when a novel state law, like New Jersey’s, effectively “oper-

ate[s]” on or “direct[ly] interfere[s]” with a core function of the

16

federal government. Id. at 437. Plus, North Dakota reiterated

that we must take “a functional approach to claims of govern-

mental immunity.” Id. at 435.

So even after North Dakota, state regulations “on contrac-

tors are constitutionally invalid” under the intergovernmental-

immunity doctrine “if they … substantially interfere with [the

federal government’s] activities.” HMO of N.J., Inc. v. Whit-

man, 72 F.3d 1123, 1132 (3d Cir. 1995) (quoting New Mexico,

455 U.S. at 735 n.11). Though the edges of the immunity doc-

trine have “evolved,” its anti-interference and anti-control core

has stayed solid. Washington, 596 U.S. at 838.

C. AB 5207 directly regulates the federal government

by banning contracts that only the federal govern-

ment can make

Applying the functional approach that intergovernmental

immunity demands, this law directly regulates the federal gov-

ernment. True, its text does not apply to the federal govern-

ment. But we can easily see the law for what it really is: a reg-

ulation “laid upon the contract of the government.” Dravo

Contracting, 302 U.S. at 149. The law prevents the federal

government from choosing how and through whom it will

carry out a core federal function. It does so by banning private

parties from selling immigration detention when “the only

entity in the business, so to speak, of [buying private] immi-

gration det[ention] is the federal government.” United States v.

King County, 122 F.4th 740, 757 (9th Cir. 2024) (striking down

a ban on deportation flights as violating both prongs of inter-

governmental immunity). Only the federal government has the

power to decide whether, how, and why to hold aliens for

17

violating immigration law. It alone has the power to make these

contracts in the first place. See DeCanas v. Bica, 424 U.S. 351,

354–55 (1976); see also Arizona v. United States, 567 U.S.

387, 394 (2012) (describing the federal government’s immi-

gration power as “broad [and] undoubted”). So this ban is in

substance a direct regulation; it destroys the federal govern-

ment’s marketplace. Cf. United States v. Town of Windsor, 765

F.2d 16, 19 (2d Cir. 1985) (“Enforcement of the substance of

the permit requirement against the contractors would have the

same effect as direct enforcement against the Government.”).

The Supreme Court has relied on this same rationale to

strike down other regulations of federal contractors that in sub-

stance regulate the federal government. For instance, it invali-

dated a state law that required private common carriers to get

state approval before charging the federal government reduced

rates. Pub. Utils. Comm’n, 355 U.S. at 535, 544. Technically,

the law operated only on contractors and treated the federal

government favorably compared to all other buyers. But the

Court saw it for what it really was: not just a neutral regulation

that affected the federal government but a “prohibition on the

Federal Government.” Id. at 544. That was a “clear” Suprem-

acy Clause violation. Id.

Likewise, the Supreme Court has invalidated state laws that

bar federal contractors from working within the state unless

they meet certain qualifications “in addition to those that the

[Federal] Government has pronounced sufficient.” Johnson v.

Maryland, 254 U.S. 51, 57 (1920); see, e.g., Leslie Miller, Inc.

v. Arkansas, 352 U.S. 187, 188–90 (1956) (per curiam) (inval-

idating a state law that imposed extra licensing requirements

on federal defense contractor on both immunity and

18

preemption grounds); see also United States v. Virginia, 139

F.3d 984, 987 (4th Cir. 1998) (barring the application of state

“licensing and registration requirements to private investiga-

tors working solely for the FBI”). Though such laws techni-

cally apply only to the federal contractor, the Court has treated

them functionally as bans on the federal government because

they restrict its ability to hire whom it chooses.

New Jersey’s law is more intrusive than such state licensing

requirements and the state law that was struck down in Public

Utilities Commission. Those laws just required state approval

before a federal contractor could do business with the federal

government; New Jersey’s law bans such contracts altogether.

So it has the veneer of regulating contractors. But really, it

directly regulates the federal government by telling it how to

carry out a core function. It is a direct regulation in everything

but name. See, e.g., Boeing Co. v. Movassaghi, 768 F.3d 832,

840 (9th Cir. 2014) (holding that a state law that “mandates the

ways in which [a federal contractor] renders services that the

federal government hired [them] to perform” is an improper

direct regulation of the federal government because it effec-

tively regulates the “terms of [the] federal contract itself”).

New Jersey and the dissent try to distinguish Public Utili-

ties Commission and the state-licensing case Leslie Miller as

turning on preemption, not intergovernmental immunity. Dis-

sent at 12. True, those cases noted “conflicts between federal

and state law.” GEO Grp., 50 F.4th at 760. But they also “un-

doubtedly drew on principles of intergovernmental immunity.”

Id. (noting Public Utilities Commission’s reliance on McCul-

loch and other intergovernmental immunity cases); see also

United States v. City of Philadelphia, 798 F.2d 81, 89 (3d Cir.

19

1986) (describing Leslie Miller and Public Utilities Commis-

sion as “involving questions of governmental immunity”).

Prominent constitutional law scholars agree with this reading.

See, e.g., Laurence Tribe, American Constitutional Law 393 &

nn.11–12 (1978) (listing Public Utilities Commission and

Leslie Miller as intergovernmental-immunity cases); Laurence

H. Tribe, Intergovernmental Immunities in Litigation, Taxa-

tion, and Regulation: Separation of Powers Issues in Contro-

versies About Federalism, 89 Harv. L. Rev. 682, 702 & nn.91–

92 (1976) (same); Gerald Gunther, Constitutional Law 309

(10th ed. 1991) (treating Leslie Miller as intergovernmental-

immunity case).

The Ninth Circuit likewise relied on both cases to strike

down a state ban on private detention contracts on intergovern-

mental-immunity grounds. GEO Grp., 50 F.4th at 752, 757–

58; cf. McHenry, 44 F.4th at 593 (upholding law in which state

refused to detain immigrants on federal government’s behalf—

but which left “the federal government … free to … contract

with private parties” for detention). We thus align ourselves

with our sister circuit in adopting this approach.

D. AB 5207 also directly regulates the federal govern-

ment by substantially interfering with a core federal

function

We could stop there. But the law directly regulates the fed-

eral government twice over by substantially interfering with its

operations. Though the Supreme Court has not had to strike

down a state law on these grounds recently, it has noted that

some restrictions on federal contractors may violate intergov-

ernmental immunity because they “substantially interfere

20

with” or control federal functions. New Mexico, 455 U.S. at

735 & n.11; see Fresno County, 429 U.S. at 463 n.11 (noting

that a state tax or regulation that “destroy[s] the federal func-

tion” would violate intergovernmental immunity). Indeed, it

has implied that courts should treat such laws as regulating the

federal government directly. See Goodyear Atomic Corp. v.

Miller, 486 U.S. 174, 181 (1988) (explaining that “the federal

function must be left free of … state regulation” even when

“the federal function is carried out by a private contractor”

(cleaned up)); Fresno County, 429 U.S. at 460, 464 (conclud-

ing that a non-discriminatory tax on federal employees did not

violate intergovernmental immunity because it did not

“threaten[ ] to obstruct or burden a federal function” and at

most “impose[d] an economic burden”); Taber, 300 U.S. at 3

(noting that the degree of “influence upon the exercise of gov-

ernmental functions” is relevant to this inquiry).

For instance, in Public Utilities Commission, the Court re-

lied on such reasoning to explain why a state law violated in-

tergovernmental immunity. The law barred federal officials

from exercising their “discretion” to hire shipping contractors

without state approval. 355 U.S. at 543. That restriction would

have “delay[ed] … shipment[s]”, thus “seriously hamper[ing]

or disrupt[ing] the military mission[s]” for which the ship-

ments were made. Id. at 545 (internal quotation marks omit-

ted). And if every state enacted similar restrictions, they would

cripple national policy. Id. at 546. As one military officer tes-

tified in that case: “We would find ourselves in an administra-

tive morass out of which we would never fight our way, we

would never win the war.” Id. (cleaned up).

21

AB 5207 suffers the same flaw. Federal law gives federal

officials discretion to contract for immigration detention.

8 U.S.C. § 1231(g); 48 C.F.R. § 3017.204-90; 8 C.F.R. § 235.3.

New Jersey’s law destroys that discretion. By barring all con-

tractors from the market, it substantially interferes with federal

immigration policy. It would shutter CoreCivic’s “mission crit-

ical” detention center, undermining ICE operations “nation-

wide.” App. 100 ¶ 8. ICE would have to tie up time and money

building and running lockups itself, change its operations, and

risk compromising national security. And if every state enacted

such bans, they would “destroy the federal function.” Fresno

County, 429 U.S. at 463 n.11.

In response, New Jersey tries to frame its law’s effect as

just a burden, not a ban. The federal government, it stresses,

can still buy or lease its own detention centers. But that response

fails. Unlike a broad-based tax or workplace-safety rule, this

law altogether bans a type of contract, and it does so in a market

that exclusively serves a federal power. The Founding genera-

tion “surely … did not intend” for federal operations and the

exercise of federal powers to “depend upon the discretion of

the state governments.” McCulloch, 17 U.S. at 362. Although

the reach of intergovernmental immunity has fluctuated over

time, that core principle has remained steady from McCulloch

to the present day.

*****

At bottom, this law is an “effort to hamstring [the federal

government’s immigration] power,” making it as hard as pos-

sible for it to hold aliens in New Jersey. City of Detroit, 355

U.S. at 495. That is a big step down a slippery slope. If we

22

accepted New Jersey’s logic, consider what else states might

be able to do. As New Jersey conceded at oral argument, under

its logic, all fifty states could pass laws banning federal con-

tractors from building weapons for the federal military. Such

bans would cripple national defense. Cf. Osborn, 22 U.S. at 867

(“Can a contractor for supplying a military post with provi-

sions, be restrained from making purchases within any State,

or from transporting the provisions to the place at which the

troops were stationed? or could he be fined or taxed for doing

so? We have not yet heard these questions answered in the

affirmative.”). Even a patchwork of such state laws “would

defeat all the ends of government.” McCulloch, 17 U.S. at 432.

States may not do that. Crandall, 73 U.S. at 46. Though “[t]he

Framers split the atom of sovereignty,” they also put the Su-

premacy Clause at the constitutional nucleus, shielding federal

power from disruptive state collision. Thornton, 514 U.S. at

838 (Kennedy, J., concurring).

E. New Jersey’s two remaining counterarguments fail

Resisting the conclusion that the law directly regulates the

federal government, New Jersey replies in two ways. Neither

persuades.

First, New Jersey and the dissent insist that federal contrac-

tors’ immunity is “narrow” and cannot be expanded unless

Congress chooses to do so. New Mexico, 455 U.S. at 737. Because

Congress could preempt the New Jersey law if it wanted to,

they argue that we should stay our hands. We agree that

preemption lets Congress “confer immunity from state regula-

tion on Government suppliers beyond that conferred by the

Constitution alone.” Dissent at 15 (quoting North Dakota, 495

23

U.S. at 439). But a statute preempting New Jersey’s law is “un-

necessary” here; the Supremacy Clause itself invalidates state

regulations of contractors that “substantially interfere with” the

Federal Government’s activities. Whitman, 72 F.3d at 1132.

New Jersey’s logic would defang the direct-regulation prong

of intergovernmental immunity and collapse intergovernmen-

tal immunity into the preemption doctrine. Yet intergovern-

mental immunity has independent bite, and courts must apply

it to referee “clashing sovereignty.” McCulloch, 17 U.S. at 430.

To be sure, CoreCivic is asserting that immunity on the fed-

eral government’s behalf. But private parties are protected by

intergovernmental immunity when the state law substantially

interferes with their ability to carry out their work on behalf of

the government. Okla. Tax Comm’n, 336 U.S. at 364. And both

the Supreme Court and our sister circuit have let contractors

assert this immunity. See Dravo Contracting, 302 U.S. at 149

(considering intergovernmental-immunity challenge brought

by federal contractor); Boeing, 768 F.3d at 839–40 (holding

that a state law binding a private contractor “directly interferes

with the functions of the federal government” and so “violates

intergovernmental immunity”). What is more, the federal gov-

ernment is here as a friend of the court, agreeing with Core-

Civic that New Jersey’s law will hobble federal immigration

enforcement.

Second, New Jersey protests that a ruling against it would

open the door to far more claims of immunity. But our holding

is narrow. We address only a state ban on contracting in a mar-

ket where the federal government is the only available coun-

terparty for services implementing a core federal power. Reg-

ulations that merely burden contractors without substantially

24

interfering with the federal government’s operations, or those

that impose neutral conditions on contracts rather than bans,

may pose different intergovernmental-immunity questions.

See, e.g., Nwauzor v. GEO Grp., Inc., 127 F.4th 750, 756–67,

771 (9th Cir. 2025) (rejecting intergovernmental-immunity

challenge to applying state minimum-wage law to inmates at

a private immigration-detention center). We leave such cases

open.

*****

“[T]he National Government is, and must be, controlled by

the people without collateral interference by the States.”

Thornton, 514 U.S. at 841 (Kennedy, J., concurring). Because

New Jersey knew that it could not openly bar the federal gov-

ernment from contracting to detain immigrants, it instead elim-

inated everyone with whom the federal government might con-

tract within its borders. It asks us not to notice the federal ele-

phant in the room. Yet we can see the law for what it really is,

“claiming the authority to dictate the manner in which the fed-

eral [immigration] function is carried out.” Goodyear Atomic,

486 U.S. at 181 n.3. Letting states do that would “chang[e]

totally the character of” our federal system by “transfer[ring]

the supremacy, in fact, to the states.” McCulloch, 17 U.S. at

432. The U.S. Constitution is supreme, and intergovernmental

immunity protects that supremacy. New Jersey’s law directly

regulates the federal government, so it is unconstitutional as

applied to CoreCivic. We will affirm.

25

AMBRO, Circuit Judge, dissenting

In 2021, New Jersey enacted AB 5207, N.J. Stat. Ann.

§§ 30:4-8.15–8.16. That law prohibits state, local, and private

entities from engaging in civil immigration detention within

the State. CoreCivic, which operates the lone private immigra-

tion-detention facility in New Jersey, and the Federal

Government argue that AB 5207 offends the Constitution’s Su-

premacy Clause for two reasons. First, it violates intergov-

ernmental immunity, which bars states from regulating the

Federal Government. And second, it is preempted by various

federal statutes that empower the Department of Homeland Se-

curity to manage how it detains immigrants.

New Jersey’s law no doubt affects the Federal Govern-

ment’s civil immigration-detention operations. But neither

intergovernmental immunity nor preemption invalidates

AB 5207 in my view. Intergovernmental immunity covers only

those state laws that either directly regulate or discriminate

against the United States. AB 5207 does neither. It applies only

to state, local, and private entities. And New Jersey also pro-

hibits private general criminal detention, thus imposing the

same restriction on itself. CoreCivic’s preemption argument

fares no better. The main federal law it invokes—8 U.S.C.

§ 1231(g)(1)—provides only that the Department of Homeland

Security must consider leasing or buying detention facilities

before constructing its own. AB 5207 thus obstructs no federal

statute.

Fortunately, the Constitution provides a solution in net-

tlesome federalism cases like this one: Congress can act. If it

wants the Federal Government to retain the ability to contract

with private detention companies, it may pass legislation say-

ing so. Because the majority would instead force courts to

make unguided decisions about when states interfere exces-

sively with undefined federal interests, I respectfully dissent.

I. BACKGROUND

A. Federal Statutory Background

Congress has given certain executive agencies, includ-

ing the Department of Homeland Security (DHS) and U.S.

Immigration and Customs Enforcement (ICE), significant dis-

cretion in managing civil immigration detention. This

discretion, mainly codified in the Immigration and Nationality

Act (INA), 8 U.S.C. § 1101 et seq., includes deciding how and

where to house immigration detainees. For example, Congress

has provided that “[t]he [Secretary of Homeland Security] shall

arrange for appropriate places of detention for aliens detained

pending removal or a decision on removal.” Id. § 1231(g)(1).

Before “initiating any project for the construction of any new

detention facility,” DHS and ICE “shall consider the availabil-

ity for purchase or lease of any existing prison, jail, detention

center, or other comparable facility suitable for such use.” Id.

§ 1231(g)(2). But if existing “Government facilities … or

[other] facilities adapted or suitably located for detention are

unavailable for rental,” DHS may “expend … amounts neces-

sary to acquire land and to acquire, build, remodel, repair, and

operate” such facilities. Id. § 1231(g)(1).

Congress has also authorized DHS to “make con-

tracts … as may be necessary and proper to carry out the

Secretary’s responsibilities.” 6 U.S.C. § 112(b)(2). DHS has

promulgated regulations permitting ICE to enter contracts with

detention facilities to house and detain immigrants as long as

those facilities meet certain requirements. See 48 C.F.R.

§ 3017.204-90; 8 C.F.R. § 235.3(e).

2

ICE primarily houses civil immigration detainees in one

of four kinds of facilities: “(1) Service Processing Centers;

(2) Contract Detention Facilities; (3) Intergovernmental Ser-

vice Agreement facilities; and (4) [spaces provided by] riders

on U.S. Marshals Service … or Federal Bureau of Prisons

(BOP) contracts.” App. 91. “Service Processing Centers are

owned by ICE and staffed by a combination of federal employ-

ees (who mainly provide medical care) and contract employees

(who provide detention services).” App. 91. Contract Deten-

tion Facilities, as the name implies, are “owned by private

companies that contract directly with the government and are

predominantly staffed by contract employees.” App. 91. Inter-

governmental Service Agreement facilities involve agreements

between ICE and state or local governments. And riders are

interagency agreements between ICE and other federal agen-

cies that directly manage their own detention facilities.

B. Immigration Detention in New Jersey and AB 5207

In 2021, ICE had entered into four contracts to house

detainees in New Jersey: two intergovernmental service agree-

ments with Essex and Hudson Counties; one U.S. Marshals’

agreement involving Bergen County; and one agreement with

CoreCivic, which privately owned and operated the Elizabeth

Detention Center (EDC). ICE entered into its contract with

CoreCivic to operate EDC in 2005 for three years. It has since

renewed that contract five times. EDC has the capacity to hold

304 detainees, and in aggregate housed more than 2,000 immi-

gration detainees annually in 2022 and 2023.

In 2021, New Jersey’s legislature passed and its Gover-

nor signed AB 5207, N.J. Stat. Ann. §§ 30:4-8.15–8.16. It

prohibits state and local agencies from engaging in civil immi-

gration detention, id. § 30:4-8.16(b)(1), and prohibits any

“private detention facility” in New Jersey from entering,

3

renewing, or extending any contract to provide private immi-

gration detention, id. § 30:4-8.16(b)(2). The law does not affect

existing contracts to provide immigration detention. Id.

§ 30:4-8.16(b)–(c). New Jersey enacted AB 5207 after finding

that “[d]etention centers and correctional facilities in New Jer-

sey have a history of poor conditions, including inadequate

medical and mental health care, use of isolated confinement,

and incidents of violence and retaliation against people in de-

tention.” Id. § 30:4-8.15(c).

After AB 5207 went into effect, Bergen, Essex, and

Hudson Counties all announced that they would no longer con-

tract with DHS or ICE to detain civil immigration violators. By

the end of 2021, EDC became the only facility housing ICE

detainees within 60 miles of New York City.

C. Procedural Background

CoreCivic challenged AB 5207 on the ground that it

violates the Supremacy Clause and sought an injunction

against New Jersey’s Governor and Attorney General. The

District Court agreed and entered summary judgment for

CoreCivic. In its view, AB 5207 violates the Supremacy

Clause in two ways: (1) it impermissibly interferes with the

immigration-detention functions of the Federal Government,

which are protected under intergovernmental immunity, and

(2) it is preempted by Congress’s delegation of authority to

DHS and ICE to consider leasing existing facilities. New

Jersey timely appealed.

4

II. INTERGOVERNMENTAL IMMUNITY

DOES NOT APPLY TO AB 5207 .

The Supremacy Clause of the Constitution provides that

federal law “shall be the supreme Law of the Land.” U.S.

Const. art. VI, cl. 2. “State laws may violate the Supremacy

Clause in two ways.” Treasurer of N.J. v. U.S. Dep’t of Treas-

ury, 684 F.3d 382, 406 (3d Cir. 2012). First, “under the

doctrine of intergovernmental immunity, states may not ‘regu-

late the Government directly or discriminate against it.’” Id.

(quoting North Dakota v. United States, 495 U.S. 423, 434

(1990) (plurality)). Second, “[u]nder the doctrine of federal

preemption, state laws are invalid if they ‘conflict with an af-

firmative command of Congress.’” Id. (quoting North Dakota,

495 U.S. at 434).

The key difference between intergovernmental immun-

ity and preemption is that the former applies irrespective of

congressional direction. Immunity flows directly from the

Supremacy Clause itself. In a world without federal statutes,

intergovernmental immunity would still invalidate offending

state regulations. Because intergovernmental immunity is such

a powerful constraint on states, basic federalism and separa-

tion-of-powers principles limit its application to the clearest

state intrusions on federal sovereignty: direct regulations on

the Federal Government itself and anti-federal discrimination.

Preemption, by contrast, “provides Congress with the power to

preempt state legislation if it so intends.” Treasurer of N.J.,

684 F.3d at 406 (quoting Roth v. Norfalco LLC, 651 F.3d 367,

374 (3d Cir. 2011)) (internal alteration omitted). In other

words, Congress gets to identify through legislation which fed-

eral interests are important enough to override otherwise valid

state law.

5

My colleagues never consider whether any congres-

sional command preempts AB 5207. They instead rest entirely

on intergovernmental immunity to strike it down. But using

immunity to invalidate a law like AB 5207, which neither

applies to nor discriminates against the United States, is like

using a hammer to pound in a screw. To make it work, my

colleagues create a new and problematic definition of “direct

regulation.” I first address what I believe to be their

misunderstanding. In my view, preemption, not immunity, is

the proper tool for addressing neutral state laws that substan-

tially but indirectly burden the Federal Government. Then,

once we have the correct test in mind, I believe it becomes clear

that AB 5207 satisfies the intergovernmental-immunity

analysis.

A. Neutral State Laws that Apply Only to Private

Parties Are Not Direct Regulations on the Federal

Government.

The first question is what constitutes a direct regulation.

In the majority’s view, the test is “functional,” Maj. Op. 12,

and we must “look through form and behind labels to sub-

stance,” id. at 9 (quoting City of Detroit v. Murray Corp. of

Am., 355 U.S. 489, 492 (1958)). To my colleagues, AB 5207

is apparently a “functional” direct regulation because it im-

poses a “ban” in a market in which the Federal Government is

the sole buyer and substantially interferes with a core federal

function. I disagree with this argument for three reasons.

First, as a matter of both language and law, a functional

direct regulation is a contradiction in terms. A regulation is di-

rect only when it applies to the object of regulation. A state law

that does not apply to the United States or some entity “so

closely connected to the [Federal] Government that the two

cannot realistically be viewed as separate,” United States v.

6

New Mexico, 455 U.S. 720, 735 (1982), is not a direct regula-

tion, and its downstream effects cannot transform it into one.

State laws that apply only to private contractors but still affect

the Federal Government, even substantially, are indirect regu-

lations.

Second, the majority’s “functional” direct-regulation

test undermines bedrock federalism and separation-of-powers

principles. Preemption, not immunity, is the appropriate limi-

tation on neutral state laws that do not apply to the Federal

Government yet still affect it. That is because preemption is

more “accommodating of the full range of each sovereign’s

legislative authority and respectful of the primary role of Con-

gress in resolving conflicts between the National and State

Governments.” North Dakota, 495 U.S. at 435. Congress, after

all, has superior institutional capacity to identify which federal

interests are so strong that they displace a state’s otherwise

valid exercise of its police powers.

And third, the majority’s limiting principles—that its

rule applies only to regulations that (1) affect markets in which

the United States is the sole buyer, (2) impose bans, and (3) in-

terfere with core federal functions—are inadministrable.

1. State Laws Must Apply to the Federal

Government to Regulate It Directly.

The majority’s main argument is that state laws that do

not apply to the Federal Government may still count as direct

regulations on the United States for immunity purposes be-

cause states “cannot regulate private parties in a way that

severely undercuts a federal function.” Maj. Op. 11. In my col-

leagues’ view, it is a state regulation’s ultimate effect, not its

legal application, that makes it direct.

7

But that is not the law, and it has not been for some time.

A state law directly regulates the Federal Government only if

it applies to the United States or some entity standing in its

shoes. Regulations on private contractors that only collaterally

affect the Federal Government are indirect.

The cases my colleagues cite for the proposition that

regulations on private parties count as direct regulations on the

United States itself are from the nineteenth century. Id. at 11

(citing Osborn v. Bank of U.S., 22 U.S. (9 Wheat.) 738 (1824);

Crandall v. Nevada, 73 U.S. (6 Wall.) 35 (1867); Union Pac.

R. v. Peniston, 85 U.S. (18 Wall.) 5 (1873)). Far more recently,

however, the Court reined in the excesses of its early immunity

doctrine. And it told us so in no uncertain terms. “At one time,

[it] struck down many” state regulations on the ground that

they “interfered with ‘the constitutional means which have

been legislated by the government of the United States to carry

into effect its powers.’” North Dakota, 495 U.S. at 434 (quot-

ing Dobbins v. Commn’rs of Erie Cnty., 16 Pet. 435, 449

(1842)). But “that view has now been ‘thoroughly repudi-

ated.’” Id. (quoting South Carolina v. Baker, 485 U.S. 505, 520

(1988)).

The modern cases the majority should rely on tell us that

a direct regulation governs “the performance, by federal offic-

ers and agencies, of governmental functions.” Penn Dairies,

Inc. v. Milk Control Comm’n of Pa., 318 U.S. 261, 269 (1943)

(emphasis added). But make no mistake: “[T]hose who con-

tract to furnish supplies or render services to the government

are not such agencies and do not perform governmental func-

tions.” Id. (emphasis added). So when a state “regulation

operate[s] against suppliers, not the Government,” then “con-

cerns about direct interference with the Federal Govern-

ment … are not implicated.” North Dakota, 495 U.S. at 437

8

(citations omitted). After all, if the Federal Government “de-

liberately opt[s] for the ‘genius’ of private enterprise in the

operation of its” federal functions, it “enjoys the benefits that

are derived from private operations, but by the same measure,

it must also suffer any reciprocal burdens.” United States v. Pa.

Env’t Hearing Bd., 584 F.2d 1273, 1279 (3d Cir. 1978).

The majority insists, however, that “even as the Court

narrowed the doctrine’s applicability to third parties, it never

eroded its anti-interference core.” Maj. Op. 13. I agree that pre-

venting state interference with federal functions is the principle

animating intergovernmental immunity. But intergovernmen-

tal immunity is not responsible for—or even capable of—

carrying that burden on its own. When a state law neutrally ap-

plies only to private contractors, then it is preemption, not

immunity, that takes over as the main anti-interference doc-

trine. The very cases the majority cites underscore how ill-

suited intergovernmental immunity is to the task of policing

state laws that regulate private contractors.

For instance, the majority claims that United States v.

New Mexico upheld a “neutral tax on federal contractors” be-

cause it did not “substantially interfere with [the federal gov-

ernment’s] activities.” Maj. Op. 12 (quoting 455 U.S. at 735

n.11) (alterations in original). But New Mexico explains that

regulations on federal contractors only rarely count as direct

regulations on the Federal Government itself. The United

States in that case tried to extend intergovernmental immunity

to certain national laboratories by designating them federal

agents. 455 U.S. at 737. The Court rejected that effort as a

“wooden formalism” that would overextend immunity. Id.

When a state law is neutral, intergovernmental “[i]mmunity is

appropriate in only one circumstance: when the levy falls on

the United States itself, or on an agency or instrumentality so

9

closely connected to the Government that the two cannot real-

istically be viewed as separate entities.” Id. at 735. To enjoy

immunity, a private contractor “must actually ‘stand in the

Government’s shoes.’” Id. at 736 (quoting Murray Corp., 355

U.S. at 503).

The majority likewise relies on United States v. Fresno

County, claiming that it upheld a “state tax on federal employ-

ees because it did not ‘threaten[] to obstruct or burden a federal

function.’” Maj. Op. 12 (quoting 429 U.S. 452, 464 (1977)).

Not quite. Fresno explains that private parties, even ones serv-

ing federal functions, ordinarily do not enjoy intergovern-

mental immunity. “The ‘legal incidence’ of the tax in-

volved … [fell] neither on the Federal Government nor on

federal property.” Fresno, 429 U.S. at 464 (emphasis added).

It was “imposed solely on private citizens who work for the

Federal Government.” Id. So the tax was invalid “only if it dis-

criminate[d] against the Forest Service or other federal em-

ployees.” Id. Although the tax “threaten[ed] to interfere with

federal laws relating to the functions of the Forest Service,” it

did so by “removing an advantage otherwise enjoyed by the

Federal Government in the employment market”—not enough

to count as a direct regulation. Id.

The majority cites footnote 11 of Fresno for, I presume,

its discussion of how a state could hypothetically levy a tax on

federal employees at a rate so high it would “destroy the federal

function performed by” the Federal Government. Id. at 463

n.11. But the Court explained only sentences later that the safe-

guard against that kind of tax would not be the bar on direct

regulations, but the antidiscrimination principle. To pass con-

stitutional muster, a federal-function-destroying tax would

need to apply neutrally. But that “danger would never arise”

because democratic political pressure would discourage

10

elected officials from “impos[ing]” such a tax “on the income

and property interests of all other residents and voters of the

[s]tate.” Id. “The political check against abuse of the taxing

power found lacking in McCulloch [v. Maryland, 17 U.S. 316

(1819)], where the tax was imposed solely on the Bank of the

United States, is present where the State imposes a nondiscrim-

inatory tax ….” Id. at 463. The Fresno Court never suggested

that such a tax would be unconstitutional on the ground that it

somehow directly regulated the United States.

To recap: the Supreme Court tells us that a state law di-

rectly regulates the United States only when that law applies to

the Federal Government or private entities that cannot realisti-

cally be viewed as separate from the Federal Government

itself. It is not direct when it applies only to private contractors,

even those performing federal functions. And a state law that

does not apply to the Federal Government but collaterally af-

fects it is not a “functional” direct regulation. It is an indirect

regulation.

2. The Majority’s Effects-Based Test Forces Courts

to Make Judgment Calls Better Left to Congress

and Cannibalizes Preemption.

To be sure, New Jersey has not discovered a loophole

in the Supremacy Clause. States do not have free rein to “un-

dercut[] a federal function” through neutral indirect regulation.

Maj. Op. 11. Preemption—a doctrine that courts apply far

more often than intergovernmental immunity—fills that gap.

Yet the majority tries to jam neutral indirect regulations that

burden the Federal Government into the intergovernmental-

immunity framework rather than analyzing them through

preemption.

11

The Supreme Court’s decision in North Dakota, which

considered how to treat nondiscriminatory state laws that indi-

rectly burden the Federal Government, illustrates the

majority’s error. Justice Stevens, writing for the plurality, con-

cluded that “[a] state regulation is invalid only if it regulates

the United States directly or discriminates against the Federal

Government or those with whom it deals.” 495 U.S. at 435.

“Whatever burdens are imposed on the Federal Government by

a neutral state law regulating its suppliers ‘are but normal inci-

dents of the organization within the same territory of two gov-

ernments.’” Id. (quoting Helvering v. Gerhardt, 304 U.S. 405,

422 (1938)). “Claims to any further degree of immunity must

be resolved under principles of congressional pre-emption.” Id.

(citing Penn Dairies, 318 U.S. at 271).

Justice Brennan, by contrast, would have looked to the

regulation’s effect on the Federal Government’s operations:

“[C]ontrary to the plurality’s view, … those dealing with the

Federal Government enjoy immunity from state control not

only when a state law discriminates but also when a state law

actually and substantially interferes with specific federal pro-

grams.” Id. at 451–52 (Brennan, J., concurring in the judgment

in part and dissenting in part). Like my colleagues in the ma-

jority, Justice Brennan would have extended federal immunity

to nondiscriminatory state regulations that “substantially ob-

struct[] … affirmative federal policies.” Id. at 452.

In the decades leading up to North Dakota, Justice

Brennan’s view had been rejected over and over, making it

clear that Justice Stevens, even in a non-binding plurality opin-

ion, had the better of the debate. The majority’s holding here,

just like Justice Brennan’s theory on which it relies, is incom-

patible with bedrock principles of federalism. The Court in

Penn Dairies held outright that “[s]ince the Constitution has

12

left Congress free to set aside local … regulation of govern-

ment contractors which burden the national government, [there

is] no basis for implying from the Constitution alone a re-

striction upon such regulations which Congress has not seen fit

to impose ….” 318 U.S. at 271. The Court similarly held in

New Mexico that a state tax on national laboratories did not

trigger freestanding constitutional immunity, regardless of its

effect on federal functions, because “[s]uch complex problems

are ones which Congress is best qualified to resolve.” New

Mexico, 455 U.S. at 744 (quoting United States v. City of De-

troit, 355 U.S. 466, 474 (1958)) (alteration in original).

The plurality in North Dakota in my view correctly syn-

thesized these cases to explain that intergovernmental

immunity does not extend to neutral and indirect regulations

on the United States. This approach is more “accommodating

of the full range of each sovereign’s legislative authority and

respectful of the primary role of Congress in resolving conflicts

between the National and State Governments.” North Dakota,

495 U.S. at 435.

My colleagues claim that Penn Dairies is distinguisha-

ble because the state law there merely “burdened the federal

government incidentally”; it “‘impose[d] no prohibition’ on the

federal government.” Maj. Op 15 (quoting Pub. Utils. Comm’n

v. United States, 355 U.S. 534, 543–44 (1958)) (alterations in

original). In their view, “Penn Dairies said nothing about the

fate of regulations that functionally bar the federal government

from doing something.” Id. This argument fails for two rea-

sons.

First, it tries to draw a legally administrable distinction

between a burden and a ban. As I explain below, even the

United States conceded at oral argument that it could not define

when a state law crosses that line. We were told that we will

13

know one when we see one. See infra at 19–21. The majority

appears stumped too because it also fails to supply any frame-

work.

But second, and more important, my colleagues are

simply wrong about what Penn Dairies says. I grant them that

the Court did not use the phrase “regulations that functionally

bar the federal government from doing something.” Maj.

Op. 15. But Penn Dairies did say that “governmental immun-

ity from state taxation and regulation” does not extend “beyond

the national government itself” and the “governmental func-

tions performed by its officers and agents.” Penn Dairies, 318

U.S. at 270 (emphasis added). Today, the majority cries foul

over the same kind of state regulations that Penn Dairies dis-

regarded, those that “inevitably impose[] some burdens on the

national government of the same kind as those imposed on cit-

izens of the United States within the state’s borders.” Id. at 271.

But “those burdens, save as Congress may act to remove them,

are to be regarded as the normal incidents of the operation

within the same territory of a dual system of government,

and … no immunity of the national government from such bur-

dens is to be implied from the Constitution which established

the system.” Id. I do not know how to read this language as

saying anything but that state regulations on private parties that

burden the Federal Government are for Congress to manage.

The majority nonetheless insists that the Court has “spo-

ken” on this issue in Public Utilities Commission, which

supposedly held that state regulations on federal contractors

that “effectively ‘place[] a prohibition on the Federal Govern-

ment’” violate intergovernmental immunity. Maj. Op. 15

(quoting Pub. Utils. Comm’n, 355 U.S. at 544) (emphasis

added). One problem: Public Utilities Commission dealt with

preemption, not immunity. And you need not take my word for

14

it. The Court tells us that it “put to one side ‘cases where, ab-

sent a conflicting federal regulation, a State seeks to impose

safety or other requirements on a contractor who does business

for the United States.’” North Dakota, 495 U.S. at 435 n.7

(quoting Pub. Utils. Comm’n, 355 U.S. at 543) (emphasis

added). It “invalidated the state law because there was a clear

conflict between the state policy of regulation of negotiated

rates and the federal policy, expressed in statute and regula-

tion, of negotiated rates.” Id. (emphases added). The same was

true of another case the majority relies on, Leslie Miller, Inc. v.

Arkansas, 352 U.S. 187 (1956): “the state licensing law came

into direct conflict with ‘the action which Congress … ha[d]

taken to insure the reliability of persons and companies con-

tracting with the Federal Government.” North Dakota, 495

U.S. at 435 n.7 (quoting 352 U.S. at 190) (emphases added).

That, it bears repeating, is about preemption.

The majority also believes that I misread the plurality

opinion in North Dakota. In my colleagues’ view, that case is

distinguishable because the state regulations there did “not re-

strict the parties from whom the Government may purchase

liquor or its ability to engage in competitive bidding,” nor did

they “require the military to submit to state control or to pur-

chase alcoholic beverage[s] from suppliers within the State or

prescribed by the State.” Maj. Op. 16 (quoting North Dakota,

495 U.S. at 441, 443).

Without a hint of irony, the majority recites the North

Dakota Court’s discussion of preemption, not immunity. The

plurality there begins the discussion the majority quotes by not-

ing that “[t]he conclusion that the labeling regulation does not

violate the intergovernmental immunity doctrine does not end

the inquiry into whether the regulation impermissibly inter-

feres with federal activities.” 495 U.S. at 439. Why? Because

15

“Congress has the power,” by preemption, “to confer immunity

from state regulation on Government suppliers beyond that

conferred by the Constitution alone.” Id. For the reasons the

majority now parrots, the Court concluded that Congress had

“not … spoken with sufficient clarity to pre-empt North Da-

kota’s attempt to protect its liquor distribution system.” Id.

at 440 (emphasis added).

In fact, when the North Dakota plurality did discuss im-

munity, it rejected the very premise of my colleagues’ holding:

that courts, without congressional direction, can distinguish be-

tween incidental economic burdens and excessive interference

with federal interests. North Dakota’s labeling requirement

stopped five out of six alcohol suppliers from selling to an in-

state military base. Id. at 437 n.8. The sixth raised its prices by

as much as $20.50 per case. Id. That seems awfully close to a

“regulation[] that functionally bar[s] the federal government

from doing something.” Maj. Op. 15. Yet even though the state

regulation functionally barred a United States military base

from purchasing alcohol, the plurality “decline[d] to embark

on an approach that would either result in the invalidation or

the trial, by some undisclosed standard, of every state regula-

tion that in any way touched federal activity.” North Dakota,

495 U.S. at 437 n.8. It did not, as my colleagues seem to be-

lieve, contemplate an exception for when courts think they

know better. The majority takes an opinion that stands for the

opposite proposition, quotes it selectively, and holds it out as

supporting their novel test. I would admire the alchemy if I

were not so alarmed by the product.

Last, the majority claims that Justice Stevens’s ap-

proach in North Dakota would “collapse intergovernmental

immunity into the preemption doctrine.” Maj. Op. 24. Alt-

hough this argument is hard to follow, I understand my

16

colleagues to mean that a more tailored conception of direct

regulation would make that prong of the analysis a dead letter,

leaving everything to preemption. I disagree. Justice Stevens’s

test would not “defang the direct-regulation prong,” as the ma-

jority claims. Id. It would invalidate all state laws that apply to

the United States—for example, those that would prohibit any

party from printing money or detaining immigrants in New Jer-

sey.

It is the majority’s view, not mine, that would merge

preemption and immunity. Indeed, the majority’s test would

seem to make it easier to invoke freestanding constitutional im-

munity than preemption, which does not permit this kind of

“freewheeling judicial inquiry into whether a state statute is in

tension with federal objectives.” Chamber of Com. v. Whiting,

563 U.S. 582, 607 (2011) (internal quotation marks omitted).

3. The Majority’s Limiting Principles Are

Unworkable.

Perhaps recognizing the gravity of the task it has set for

courts, the majority tries to characterize today’s decision as a

ticket for one ride only. On its telling, “[w]e address only a

state ban on contracting in a market where the federal govern-

ment is the only available counterparty for services implement-

ing a core federal power.” Maj. Op. 24–25. I count three sup-

posed limiting principles: that the majority’s expanded direct-

regulation test applies only to state laws that (1) regulate mar-

kets in which the United States is the sole buyer, (2) impose

bans, and (3) limit core federal functions. But on closer inspec-

tion, these limitations provide little direction. Each is

unworkable, forcing judges to draw their own politically sen-

sitive conclusions. When faced with these deficiencies, the

majority has nothing to say. Unfortunately, they leave it to a

future court to sort out the mess.

17

i. Markets in which the United States is the sole

buyer.

The first limitation the majority identifies is that

AB 5207 applies to a market in which the United States is the

only buyer. This seems persuasive at first blush. After all, if a

state purports to regulate a market in which the United States

is the sole buyer, then we may have a strong indication that the

state is targeting the Federal Government indirectly. The ma-

jority stumbles, however, in characterizing that kind of state

law as a direct regulation. The immunity test already accounts

for state laws that single out the Federal Government: they are

unconstitutional because they are discriminatory. By calling its

single-market-participant claim a direct-regulation argument

rather than a discrimination one, the majority capitalizes on the

intuition that New Jersey is discriminating, but without identi-

fying someone treated better. A state, however, “does not

discriminate against the Federal Government and those with

whom it deals unless it treats someone else better than it treats

them.” United States v. Washington, 460 U.S. 536, 544–45

(1983). And as New Jersey has repeatedly explained, it takes

its own medicine by separately banning private general crimi-

nal detention.

The majority’s argument also forces us to grapple with

complex questions about how to define the relevant market.

My colleagues claim that New Jersey regulates private immi-

gration detention, a market from which only the United States

buys. But that is true only if you ignore New Jersey’s separate

prohibition on general private detention. For the majority’s test

to make sense, my colleagues must accept one of two proposi-

tions. First, AB 5207 would have been constitutional if it had

instead been passed in a single statute banning all private de-

tention in New Jersey. It is unlawful here because it was passed

18

separately, even though the substantive effect is the same. Or

second, even a statute like the one I described would be partly

unconstitutional because every neutral statute that applies gen-

erally to contractual relationships could be recharacterized as a

partial direct regulation on the United States. Neither makes

sense.

Even the United States agreed that the framing endorsed

by the majority is a discrimination argument. When asked

whether it matters if we define the market as private immigra-

tion detention or private detention generally, the Government

demurred, stating that it does not “understand that framing to

be very important when … talking about the regulation prong.”

Tr. 72:3–5. When pressed on whether the market definition

“bear[s] on how much we look through form to substance,” the

United States responded that “it’s definitely relevant, I think,

for the discrimination prong.” Tr. 72:13–14, 22–23.

If a state law targets a market in which the United States

is the sole buyer but without applying to the United States, it

may be unconstitutional. But if it is, that is because that law

discriminates against, not because it directly regulates, the Fed-

eral Government.

ii. Bans.

The majority’s second limitation is that its test applies

only to bans, not burdens or taxes. But the difference between

a ban and a burden is one of degree, not kind. At oral argument,

the United States essentially conceded that this distinction is

unstable and declined to provide a framework for how to dis-

tinguish a ban from a burden. When asked how we “know

when something goes from incidental to impermissible, func-

tionally or otherwise,” the Government admitted that “that will

be a difficult question in some circumstances for courts to con-

sider.” Tr. 73:14–17. When pressed on whether the difficulty

19

of this question is what motivated the plurality in North Dakota

to reject a substantial-burden test, the United States “agree[d]

there will be difficult line-drawing problems.” Tr. 69:20–21.

These cases will present “very, very fact-specific inquiries that

[will be] impossible to pre-determine in advance.”

Tr. 73:21–23. Rather than supplying a framework, the Govern-

ment told us that we will know a ban when we see one:

“[W]hatever difficult line-drawing there might be in other

cases, this is a clear case where the Supremacy Clause does not

permit that kind of obstruction.” Tr. 84:20–22. It cannot be that

clear, however, because I see a limitation of discretion, not a

ban. See Tr. 86:13–16 (United States acknowledging that

“[t]he effects on the [F]ederal [G]overnment and the prohibi-

tion to which [it] keep[s] referring” can also be “framed” as

“just a curtailing of discretion”).

An example illustrates the point. Suppose New Jersey

did not stop private entities from entering into immigration-

detention contracts but uniformly taxed them for each immi-

grant they detain. Is that a ban or a burden? If the tax is low,

the majority would probably characterize it as an incidental

burden that does not directly regulate the United States. But

what if it were so high that doing business in New Jersey be-

came impossible for private immigration-detention

companies? Then perhaps the majority would say it is effec-

tively a ban, and thus a “functional” direct regulation. But at

what point does the tax cross the line? The majority not only

fails to tell us—it does not even explain how we would go

about figuring it out.

The plurality in North Dakota anticipated this problem.

It acknowledged that “Justice Brennan’s test contains no stand-

ard by which ‘burdensomeness’ may be measured.” 495 U.S.

at 437 n.8. Determining when a regulation goes from burden to

20

ban implicates thorny questions about federal interests that

courts are ill-equipped to resolve without congressional guid-

ance. To keep courts out of that mire, the plurality chose to

“rely upon our traditional standard of ‘burden’—that specified

by Congress and, in its absence, that which exceeds the burden

imposed on other comparably situated citizens of the State.”

Id. I would follow Justice Stevens and keep courts out of this

thicket.

iii. Core federal functions.

The majority’s final limitation is that immigration de-

tention implicates core federal functions. On its telling, the

Supreme Court has “implied that courts should treat such laws

as regulating the federal government directly.” Maj. Op. 21.

But the cases the majority cites do not say that.1 Worse yet, my

colleagues fail to mention the cases that hold the opposite.

Penn Dairies considered and rejected the argument that

a neutral, indirect state law that substantially affects important

federal operations nevertheless triggers immunity. Pennsylva-

nia’s price control on milk passed constitutional muster

because it “impose[d] no prohibition on the national govern-

ment or its officers,” only private sellers. Penn Dairies, 318

U.S. at 270. Sure, “[b]y the exercise of control over the seller,

1

As I explain above, New Mexico and Fresno County reject the

majority’s test. See supra at 9–10. The other case the majority

cites for this proposition is Goodyear Atomic Corp. v. Miller,

486 U.S. 174, 181 (1988). It should come as no surprise that

this case is also distinguishable. Ohio tried to apply its work-

ers’ compensation safety requirements to “a federally owned

facility performing a federal function.” Id. Of course, that state

law was a classic direct regulation because it applied by its

terms to the Federal Government.

21

the regulation impose[d] or may [have] impose[d] an increased

economic burden on the government,” forcing the United

States to “procure a supply from without the state.” Id. “But in

this burden,” absent congressional action to forbid it, Pennsyl-

vania’s law was “no different or greater [an] impairment of

federal authority” than a “state regulation of the operations of

a trucking company in performing its contracts with the gov-

ernment to transport workers employed on a Public Works

Administration project,” or “local building regulations applied

to a contractor engaged in constructing a postoffice building

for the government”—state laws the Court had blessed. Id.

(first citing United States v. Baltimore & A.R. Co., 308 U.S.

525 (1939) (mem.) (per curiam); and then citing James Stewart

& Co. v. Sadrakula, 309 U.S. 94 (1940)). “The trend” of the

Court’s decisions, even then, was “not to extend governmental

immunity from state … regulation beyond the national govern-

ment itself and governmental functions performed by its

officers and agents.” Id.

Perhaps my colleagues in the majority believe private

immigration detention is more important than transporting

workers employed for federal projects or building post offices.

Indeed, maybe everyone can agree, at a high level of abstrac-

tion, that “immigration” is a core federal function. But we

inevitably must draw lines within the immigration domain be-

tween core and non-core functions. And that exercise is fraught

with political judgments. Is supplying the food and bedding for

immigration-detention facilities core? What about deciding the

wages paid to workers at those facilities? What about their san-

itation standards? Or the taxes they must pay? These questions

now matter because the majority has given constitutional sig-

nificance to the answers.

22

My colleagues would have us make our own unguided

decisions about whether private ownership of immigration de-

tention facilities falls on the right side of the line. But

Congress, not courts, is supposed to determine which federal

functions are sufficiently important that they displace other-

wise valid state law. And we properly analyze those cases

under the rubric of preemption; we do not contort ourselves to

explain how they are somehow direct regulations on the Fed-

eral Government.

B. Applying the Correct Test: AB 5207 Does Not

Violate Intergovernmental Immunity.

Above, I explained the distinction between a direct reg-

ulation and a neutral, indirect regulation that nevertheless

substantially affects the United States. With the right test in

mind, the conclusion is easy: AB 5207, whatever its effects,

does not violate intergovernmental immunity.

1. AB 5207 does not directly regulate the Federal

Government.

CoreCivic argues that AB 5207 is a direct regulation on

the United States because it ultimately affects the Federal Gov-

ernment’s ability to contract with private parties. Even though

the statute applies only to private entities, CoreCivic, like the

majority, insists that we should look past form to substance,

and focus on the regulation’s functional effect rather than its

legal application. But as noted above, a regulation is not direct

just because it affects the Federal Government, even signifi-

cantly. It must regulate “the performance, by federal officers

and agencies, of governmental functions.” Penn Dairies, 318

U.S. at 269 (emphasis added).

23

The Seventh Circuit’s recent decision in McHenry

County v. Raoul, 44 F.4th 581 (7th Cir. 2022), is instructive.

Illinois prohibited local and municipal governments from en-

tering into contracts with the United States to detain immi-

grants. Several Illinois counties sued, arguing that the law vio-

lated intergovernmental immunity by, among other things,

directly regulating the United States. After all, if a county can-

not contract with ICE, that means ICE cannot contract with that

county.

A unanimous panel of the Seventh Circuit dismissed

that argument in short order. In its view, “the Illinois

Act … impose[d] no direct regulation on any federal official or

agency.” Id. at 593. It reached that conclusion even though “a

consequence of the Act—the intended consequence of the

Act—[wa]s that the federal government will not be able to use

cooperative agreements to house immigration detainees in Illi-

nois State or county facilities.” Id. (emphasis in original). Even

when a state law’s purpose and effect are to burden the Federal

Government, that state law “does not directly regulate the

[F]ederal [G]overnment” if it merely “appl[ies] non-discrimi-

natory regulations to private entities or local

governments … that contract with the [G]overnment.” Id.

at 593 n.6.

2. AB 5207 does not discriminate against the

Federal Government or those with whom it deals.

The discrimination prong of intergovernmental immun-

ity prohibits states from singling out the Federal Government

or its contractors “for less favorable ‘treatment’” or regulating

them “unfavorably on some basis related to their governmental

‘status.’” United States v. Washington, 596 U.S. 832, 839

(2022) (first quoting Washington, 460 U.S. at 546; and then

quoting North Dakota, 495 U.S. at 438 (plurality)). The

24

District Court did not reach this prong of the analysis. Core-

Civic and the United States nevertheless argue that we can

affirm on this ground because AB 5207 discriminates against

the Federal Government and its contractors in two ways.

The challengers first argue that AB 5207 is discrimina-

tory because only the United States engages in civil

immigration detention. In their view, a restriction on entities

that engage in civil immigration detention necessarily targets

the Federal Government. This is the majority’s argument that

New Jersey targets a market in which the United States is the

sole buyer. See supra at 18–19. As noted already, and as the

parties all agree, this argument sounds in discrimination. But it

fails when analyzed as such because nobody identifies a com-

parator treated better. “Differential treatment is critical to a

discrimination-based intergovernmental immunity claim.” Ra-

oul, 44 F.4th at 594. “The mere fact that [AB 5207] touches on

an exclusively federal sphere is not enough to establish dis-

crimination.” Id.

CoreCivic and the United States also argue that

AB 5207 is discriminatory because New Jersey allows private

entities to detain certain categories of state prisoners. They

note that New Jersey’s Department of Corrections has limited

authority to “authorize the confinement of eligible inmates in

private facilities.” N.J. Stat. Ann. §§ 30:4-91.9–10. The United

States also claims that New Jersey permits counties to “‘con-

fin[e] inmates who are in need of and receiving rehabilitative

and similar services in private facilities’ operated by for-profit

entities.” U.S. Br. 17 (quoting Essex Cnty. Corr. Officers PBA

Loc. No. 382 v. Cnty. of Essex, 106 A.3d 1238, 1248 (N.J. Su-

per. Ct. App. Div. 2014)).

The challengers mischaracterize those laws. Sec-

tions 30:4-91.9–10 permit the Department of Corrections to

25

transfer a limited number of low-security prisoners to “non-

profit” “residential center[s]”—also known as “halfway

houses”—to finish their sentences. App. 110. Another statute,

§ 30:4-27.2, allows specialized psychiatric facilities to provide

involuntary mental-health services. And in Essex County, the

New Jersey Superior Court acknowledged that state law ordi-

narily forbids private companies from performing the “core

governmental function” of “confining … inmates.” 106 A.3d

at 1249. Such facilities are permissible only when they serve

the “purposes of providing substance abuse, rehabilitative, and

similar services to inmates,” and not merely as “alternative jail

facilities” for “incarceration.” Id. at 1250.

Private immigrant-detention facilities are unlike half-

way houses, psychiatric prisons, and special-purpose

rehabilitative facilities. CoreCivic does not claim to provide

those services. Immigrant detention is more like general pri-

vate criminal detention, which New Jersey also prohibits.

* * *

I recognize that ICE wants private immigration-deten-

tion facilities in New Jersey. AB 5207 will require ICE to

spend more money either to buy or lease existing facilities or

to build new ones. And I understand the majority’s discomfort

with allowing New Jersey to affect federal immigration deten-

tion. In fact, I share that discomfort. But our duty as

intermediate appellate court judges is to follow the doctrine as

it exists, even when it leads to results that make us uncomfort-

able. My colleagues disfigure a clear rule—states cannot

directly regulate the Federal Government—to alleviate their

discomfort. I cannot follow them.

26

III. NO FEDERAL LAW PREEMPTS AB 5207 .

The majority does not address preemption. But as I

stated at the outset, I believe its substantial-interference argu-

ment goes to preemption, not immunity. The preemption

doctrine “provides Congress with the power to preempt state

legislation if it so intends.” Treasurer of N.J., 684 F.3d at 406

(brackets and internal quotation marks omitted). “There are

three types of preemption: express preemption … , field

preemption[,] and conflict preemption.” Id. The United States

and CoreCivic invoke only conflict and field preemption. Alt-

hough it is a closer call, both arguments fail.

A. AB 5207 Is Not Conflict Preempted.

Conflict preemption is a kind of implied preemption

that displaces a state law when that law “stands as an obstacle

to the accomplishment and execution of the full purposes and

objectives of Congress.”2 Arizona v. United States, 567 U.S.

387, 399 (2012) (internal quotation marks omitted). A conflict-

preemption argument, “like all preemption arguments, must be

grounded in the text and structure of the statute at issue.” Kan-

sas v. Garcia, 589 U.S. 191, 208 (2020) (internal quotation

marks omitted). “Our ultimate task in any pre-emption case is

to determine whether state regulation is consistent with the

structure and purpose of the [federal] statute as a whole.” Gade

v. Nat’l Solid Wastes Mgmt., 505 U.S. 88, 98 (1992) (internal

quotation marks omitted). As I previewed above, this is not “a

2

Conflict preemption can also occur if “compliance with both

federal and state regulations is a physical impossibility,” Ari-

zona v. United States, 567 U.S. 387, 399 (2012) (internal

quotation marks omitted), but no one argues that is the case

here.

27

freewheeling judicial inquiry into whether a state statute is in

tension with federal objectives.” Whiting, 563 U.S. at 607 (in-

ternal quotation marks omitted). Rather, “a litigant must point

specifically to … a federal statute that does the displacing or

conflicts with state law.” Va. Uranium, Inc. v. Warren, 587

U.S. 761, 767 (2019) (internal quotation marks omitted).

Under the INA, Congress requires ICE to detain noncit-

izens, e.g., 8 U.S.C. § 1231(a)(2), and granted DHS discretion

in deciding how to do so, see id. § 1231(g)(1). The Secretary

of Homeland Security must “arrange for appropriate places of

detention for aliens detained pending removal or a decision on

removal.” Id. § 1231(g)(1). The INA also contemplates the

possibility that spaces may be “unavailable for rental.” Id.

When that is so, the Secretary “may expend … amounts neces-

sary to acquire land and to acquire, build, remodel, repair, and

operate facilities … necessary for detention.” Id. (emphasis

added). Before “initiating any project for the construction of

any new detention facility,” the INA directs that ICE “shall

consider the availability for purchase or lease of any existing

prison, jail, detention center, or other comparable facility suit-

able for such use.” Id. § 1231(g)(2) (emphasis added).

Regulations implementing the INA provide that ICE may “en-

ter into contracts of up to fifteen years’ duration for detention

or incarceration space or facilities, including related services.”

48 C.F.R. § 3017.204–90.

AB 5207 prohibits New Jersey, local government agen-

cies, and “privately owned or operated [detention] facilit[ies]”

from “enter[ing] into, renew[ing], or extend[ing] any immigra-

tion detention agreement,” defined as any “contract,

agreement, intergovernmental service agreement, or memoran-

dum of understanding that authorizes the State, local

government agency, or private detention facility to house or

28

detain individuals for civil immigration violations.” N.J. Stat.

Ann. § 30:4‑8.16. As the United States puts it, this “eliminates

the possibility of choice,” requiring the Federal Government to

own and operate its own facilities. U.S. Br. 6.

Section 1231 does not evince a clear congressional in-

tent that ICE be permitted to use private immigration detention.

Nor does it contemplate that private facilities must be a part of

the detention scheme. And it does not impose a scheme on pri-

vate and public detention facilities or indicate the way it wishes

the system to work. Rather, it leaves the Secretary with discre-

tion to consider and choose from what is available. “[A] high

threshold must be met if a state law is to be preempted for con-

flicting with the purposes of a federal Act,” Whiting, 563 U.S.

at 607 (internal quotation marks omitted), and this case does

not meet the threshold set by our precedent.

For example, this case is distinguishable from Leslie

Miller and Public Utilities Commission. In Leslie Miller, Con-

gress instructed that the United States “shall” award the

relevant contract to the bidder whose bid “w[ould] be most ad-

vantageous to the Government, price and other factors

considered.” 352 U.S. at 188 (internal quotation marks omit-

ted). Arkansas law imposed on contractors additional

requirements for obtaining a license to perform such activity.

Id. The Court concluded that this was enough to create a con-

flict because it “frustrate[d] the expressed federal policy of

selecting the lowest responsible bidder.” Id. at 190.

In Public Utilities Commission, Congress had adopted a

“comprehensive policy governing procurement” that explained

how “the head of an agency” would “negotiate such a purchase

or contract.” 355 U.S. at 540–41. Federal law mandated select-

ing the least costly means. Id. at 542. Under California law,

that discretion could “be exercised and reduced rates used”

29

only if California approved. Id. at 543. The “conflict between

the federal policy of negotiated rates and the state policy of

regulation of negotiated rates” was “clear.” Id. at 544. In those

cases and elsewhere, the “principal indication that Congress in-

tended to pre-empt state law” was its use of “shall.” Gade, 505

U.S. at 99.

But nothing in the INA requires the Secretary to con-

tract with privately operated detention facilities. Even if ICE

were to lease a privately owned building, it could operate that

building itself. I agree with the Seventh Circuit that the statu-

tory language “demonstrates at most a general preference to

use existing facilities when they are available.” Raoul, 44

F.4th at 591 (emphasis added).

B. AB 5207 Is Not Field Preempted Either.

State law is also preempted “when federal law occupies

a field of regulation so comprehensively that it has left no room

for supplementary state legislation.” Murphy v. NCAA, 584

U.S. 453, 479 (2018) (internal quotation marks omitted). We

can infer congressional intent to displace state law altogether

from a framework of regulation “so pervasive that Congress

left no room for the States to supplement it or where there is a

federal interest so dominant that the federal system will be as-

sumed to preclude enforcement of state laws on the same

subject.” Arizona, 567 U.S. at 399 (internal quotation marks

and alterations omitted).

Federal law does not so wholly and exclusively occupy

the field of private immigration detention. Certainly “[t]he

Government of the United States has broad, undoubted power

over the subject of immigration and the status of aliens.” Id.

at 394, 400 (applying the preemption analysis to the “field of

alien registration”). For example, “[p]olicies pertaining to the

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entry of aliens and their right to remain here are … entrusted

exclusively to Congress.” Galvan v. Press, 347 U.S. 522, 531

(1954). And “[t]he authority to control immigration—to admit

or exclude aliens—is vested solely in the Federal Govern-

ment.” Truax v. Raich, 239 U.S. 33, 42 (1915). But just because

a state law touches on immigration law does not mean field

preemption applies. See Ocean Cnty. Bd. of Comm’nrs v. Att’y

Gen. of N.J., 8 F.4th 178 (3d Cir. 2021) (finding no preemption

of a law barring local law enforcement from assisting federal

immigration authorities in certain ways); Lozano v. City of

Hazleton, 724 F.3d 297, 304 (3d Cir. 2013) (explaining that in

Whiting “the Supreme Court upheld an Arizona statute that al-

lowed state courts to suspend or revoke the business licenses

of employers who knowingly or intentionally employ unau-

thorized aliens”).

CoreCivic hardly develops this argument, but it seems

to suggest that the field of “immigration detention” is off lim-

its. AB 5207, however, says nothing about who can be

detained, why, for how long, or even where. It regulates only

whether private entities can operate immigration detention fa-

cilities in the State. This is not the stuff field preemption is

made of.

IV. CONCLUSION

AB 5207 applies only to private, local, and state parties,

not the United States. And New Jersey does not single out im-

migration detention—it prohibits itself from using private

general criminal detention too. The majority nonetheless in-

sists that AB 5207 violates intergovernmental immunity be-

cause it is “functionally” a direct regulation on the United

States. But as a matter of both doctrine and plain language,

state laws that do not apply to the Federal Government are not

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direct regulations—they are indirect because it is their down-

stream consequences that burden the United States. Case law,

basic separation-of-powers principles, and common sense all

tell us that Congress, not courts, should decide when those

spillover effects are so substantial that they violate the Suprem-

acy Clause. And the proper doctrinal method for determining

whether Congress intends to displace a neutral indirect state

law is preemption, not intergovernmental immunity. Because

the majority would have judges rather than legislators make

politically sensitive judgments about when a neutral state law

that does not apply to the United States interferes too much

with federal interests, I respectfully dissent.

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