Lozano v. City of Hazleton

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 07-3531

_____________

PEDRO LOZANO; HUMBERTO HERNANDEZ; ROSA

LECHUGA; JOHN DOE 1; JOHN DOE 2; JOHN DOE 3, a

Minor, by His parents; JANE DOE 1; JANE DOE 2; JANE DOE

3; JOHN DOE 4, a Minor by His parents, BRENDA LEE

MIELES; CASA DOMINICANA OF HAZLETON, INC.;

HAZLETON HISPANIC BUSINESS ASSOCIATION;

PENNSYLVANIA STATEWIDE LATINO COALITION; JANE

DOE 5; JOHN DOE 7; JOSE LUIS LECHUGA

v.

CITY OF HAZLETON,

Appellant

Appeal from the United States District Court

for the Middle District of Pennsylvania

(No. 3:06-cv-01586)

District Judge: Honorable James M. Munley

Argued October 30, 2008

Before: McKEE, Chief Judge, and NYGAARD and SILER,*

Circuit Judges

(Opinion filed September 9, 2010)

Witold J. Walczak, Esq. (ARGUED)

American Civil Liberties Union of Pennsylvania

313 Atwood Street

Pittsburgh, PA 15213

Omar Jadwat, Esq. (ARGUED)

Lee P. Gelernt, Esq.

American Civil Liberties Union

Immigrant Rights’ Project

125 Broad Street

18 th Floor

New York, NY 10004-2400

Jennifer Chang, Esq.

Lucas Guttentag, Esq.

American Civil Liberties Union Foundation

39 Drumm Street

San Francisco, CA 94111

Jackson Chin, Esq.

Foster Maer, Esq.

*

Honorable Eugene E. Siler, Jr., Senior Judge of the United

States Court of Appeals for the Sixth Circuit, sitting by

designation.

2

Ghita Schwarz, Esq.

Puerto Rican Legal Defense & Education Fund

99 Hudson Street

14 th Floor

New York, NY 10013

Thomas B. Fiddler, Esq.

White & Williams

1650 Market Street

One Liberty Place, Suite 1800

Philadelphia, PA 19103

Elena Park, Esq.

Cozen & O’Connor

200 Four Falls Corporate Center

P.O. Box 800, Suite 400

West Conshohocken, PA 19428-0800

Ilan Rosenberg, Esq.

Thomas G. Wilkinson, Jr., Esq.

Cozen & O’Connor

1900 Market Street

3 rd Floor

Philadelphia, PA 19103

Shamaine A. Daniels, Esq.

Community Justice Project

118 Locust Street

Harrisburg, PA 17101

Counsel for Plaintiffs-Appellees

3

Kris W. Kobach, Esq. (ARGUED)

Professor of Law

University of Missouri (Kansas City)

5100 Rockhill Road

Kansas City, MO 64110-2499

Harry G. Mahoney, Esq.

Carla P. Maresca, Esq.

Andrew B. Adair, Esq.

Deasey Mahoney, Valentini & North

1601 Market Street

Suite 3400

Philadelphia, PA 19103-2978

Elizabeth S. Gallaway, Esq.

Mountain States Legal Foundation

2596 South Lewis Way

Lakewood, CO 80227

Michael M. Hethmon, Esq.

Immigration Reform Law Institute

25 Massachusetts Avenue, N.W.

Suite 330 B

Washington, DC 20001

Counsel for Defendant-Appellant

Damon Scott

1446 Fair Oaks Lane

Florence, SC 29506-5733

4

Paul J. Orfanedes, Esq.

James F. Peterson, Esq.

Judicial Watch, Inc.

501 School Street, S.W.

Washington, DC 20024

Richard A. Samp, Esq.

Washington Legal Foundation

2009 Massachusetts Avenue, N.W.

Washington, DC 20036

Andrew L. Schlafly, Esq.

17th Floor

521 Fifth Avenue

New York, NY 10175

Counsel for Amicus Appellants

Robin S. Conrad, Esq.

National Chambers Litigation Center

1615 H Street, N.W.

Washington, DC 20062

Carter G. Phillips, Esq.

Eric A. Shumsky, Esq.

Sidley Austin

1501 K Street, N.W.

Washington, DC 20005

Burt M. Rublin, Esq.

Ballard Spahr

1735 Market Street

51st Floor

Philadelphia, PA 19103

5

Diana S. Andsager, Esq.

Mayer Brown

71 South Wacker Drive

Chicago, Il 60603

Nancy Winkelman, Esq.

Schnader Harrison Segal & Lewis

1600 Market Street

Suite 3600

Philadelphia, PA 19103

Kenneth J. Pfaehler, Esq.

Sonnenschein, Nath & Rosenthal

1301 K Street, N.W.

Suite 600 East Tower

Washington, DC 20005

Charles D. Weisselberg, Esq.

Berkley Law School

688 Simon Hall

Berkley, CA 94720

Jacob S. Pultman, Esq.

Allen & Overy

1221 Avenue of the Americas

New York, NY 10020

John W. West, Esq.

Bredhoff & Kaiser

805 Fifteenth Street, N.W.

Suite 1000

Washington, DC 20005

6

Mark D. McPherson, Esq.

Morrison & Foerster

1290 Avenue of the Americas

New York, NY 10104

Counsel for Amicus Appellees

OPINION

McKEE, Chief Judge.

TABLE OF CONTENTS

I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

II. FACTUAL AND PROCEDURAL BACKGROUND. . . . . . . 10

A. Hazleton and its Ordinances. . . . . . . . . . . . . . . . . . . . 10

1. The Illegal Immigration Relief Act Ordinance. 14

2. The Rental Registration Ordinance.. . . . . . . . . 21

B. The Plaintiffs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

C. Procedural History. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

III. JURISDICTION AND STANDARD OF REVIEW. . . . . . . . 26

IV. SEVERABILITY AND STANDING. . . . . . . . . . . . . . . . . . . 26

A. General Principles of Standing.. . . . . . . . . . . . . . . . . . 30

B. Constitutional Standing. . . . . . . . . . . . . . . . . . . . . . . . 33

1. The Employment Provisions.. . . . . . . . . . . . . . 33

2. Private Cause of Action. . . . . . . . . . . . . . . . . . 41

3. Housing Provisions. . . . . . . . . . . . . . . . . . . . . . 43

a. Landlord Plaintiffs.. . . . . . . . . . . . . . . . 44

b. Tenant Plaintiffs. . . . . . . . . . . . . . . . . . 52

C. Prudential Standing. . . . . . . . . . . . . . . . . . . . . . . . . . . 56

7

V. ANONYMITY AND CONFIDENTIALITY.. . . . . . . . . . . . . 62

VI. DISCUSSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

A. Federal Immigration Law.. . . . . . . . . . . . . . . . . . . . . . 67

1. The Immigration and Nationality Act. . . . . . . . 67

2. The Immigration Reform and Control Act. . . . 73

3. The Illegal Immigration Reform and Immigrant

Responsibility Act. . . . . . . . . . . . . . . . . . . 78

B. State and Local Immigration Laws.. . . . . . . . . . . . . . . 81

C. Pre-emption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

1. Employment Provisions. . . . . . . . . . . . . . . . . . 94

a. Presumption Against Pre-emption. . . . 94

b. Express Pre-emption. . . . . . . . . . . . . . . 97

c. Conflict Pre-emption.. . . . . . . . . . . . . 105

2. Housing Provisions. . . . . . . . . . . . . . . . . . . . . 132

VII. CONCLUSION .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

VIII. APPENDIX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

A. The Illegal Immigration Relief Act Ordinance. . . . . 147

B. Rental Registration Ordinance. . . . . . . . . . . . . . . . . . 167

I. INTRODUCTION

“Since the late 19th century, the United States has

restricted immigration into this country. . . . But despite the

existence of these legal restrictions, a substantial number of

persons have succeeded in unlawfully entering the United

8

States, and now live within [the] various States.” Plyler v. Doe,

457 U.S. 202, 205 (1982). The dispute we are now called upon

to address is one of an increasing number of cases that have

arisen from actions that state and local governments have taken

because of illegal immigration.

The City of Hazleton, Pennsylvania (“Hazleton” or the

“City”) is appealing a permanent injunction that the district

court entered prohibiting Hazleton’s enforcement of two local

ordinances that attempt to regulate employment of, and

provision of rental housing to, certain aliens. Several

individuals and organizations sued to enjoin enforcement of the

ordinances arguing that they violate the United States

Constitution, as well as federal and state statutes. The district

court agreed and enjoined Hazleton from enforcing the

ordinances in their entirety.

We now hold that the district court erred in reaching the

9

merits of the challenge to the private cause of action provision

because no plaintiff has standing to challenge that provision.

Accordingly, that portion of the district court’s order will be

vacated. However, although our reasoning differs somewhat

from the analysis used by the district court, we conclude that it

correctly enjoined the rest of the challenged ordinances. We

will therefore affirm the district court’s order in all other

respects.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. Hazleton and its Ordinances

The City of Hazleton is located in Luzerne County in

northeastern Pennsylvania. Lozano v. City of Hazleton, 496 F.

Supp. 2d 477, 484 (M.D. Pa. 2007). Under Pennsylvania law,

Hazleton is classified as a City of the Third Class and operates

under an “Optional Plan B” form of government. Id. Its

executive is a mayor, and its legislature is a city council. Id.

10

Hazleton's population was only 23,000 in 2000. Id.

Between 2000 and the time of trial, however, its population

increased to between 30,000 and 33,000. Id. Much of this

growth was due to an influx of Latino families who migrated

from New York and New Jersey to Pennsylvania in the early

2000s. Id. These newcomers included United States citizens

and lawful permanent residents, as well as persons lacking

lawful immigration status, who are often referred to as

“undocumented immigrants” or “illegal aliens.” 1 Id.

1

Hazleton refers to persons who are not lawfully present

within the United States as “illegal aliens.” Plaintiffs refer to them

as “undocumented immigrants.” We recognize that there are

significant criticisms of each term. See, e.g., Beth Lyon, When

More “Security” Equals Less Workplace Safety: Reconsidering

U.S. Laws that Disadvantage Unauthorized Workers, 6 U. Pa. J.

Lab. & Empl. L. 571, 576 (2004) (“Scholarly and popular concerns

about the phrase ‘illegal alien’ abound, pointing out that the phrase

is racially loaded, ambiguous, imprecise, and pejorative.”);

Martinez v. Regents of the Univ. of Cal., 83 Cal. Rptr. 3d 518, 522

n.2 (Cal. Ct. App. 2008) (“[T]he term ‘illegal alien’ [is] less

ambiguous [than the term ‘undocumented immigrant.’]”), rev.

granted, 198 P.3d 1 (Cal. 2008).

(continued...)

11

Hazleton’s mayor, as well as other local officials,

subsequently concluded that aliens lacking lawful status were to

blame for certain social problems in the City, see J.A. 1672-85,

and that the federal government could not be relied upon to

prevent such aliens from moving into the City, or to remove

them, see Lozano, 496 F. Supp. 2d at 522 n.44. Accordingly,

City officials decided to take independent action to regulate the

local effects of unlawful immigration. See J.A. 1385, 1486-87.

1

(...continued)

Federal immigration law defines an “alien” as “any person

not a citizen or national of the United States.” 8 U.S.C. §

1101(a)(3). “Immigrant” is defined as “every alien except an alien

who is within [certain specified] classes of nonimmigrant aliens,”

and generally refers only to lawful permanent residents. 8 U.S.C. §

1101(a)(15). Congress has preferred the term “alien” to describe

those persons who lack lawful immigration status, see, e.g., 8

U.S.C. §§ 1182, 1227, 1228. We will use the word “alien” rather

than “immigrant” because “alien” is more precise, and precision is

important to discussions in this area. When discussing issues of

employment, we will use the official term: “unauthorized alien.” 8

U.S.C. § 1324a. However, when discussing issues of immigration

status, we will use either: “aliens not lawfully present” or “aliens

lacking lawful immigration status,” rather than “illegal aliens.”

12

Beginning on July 13, 2006, Hazleton’s City Council began

enacting a series of ordinances designed to address these

concerns. Lozano, 496 F. Supp. 2d at 484.

This litigation concerns two of those ordinances: the

Illegal Immigration Relief Act Ordinance (“IIRAO”), which

consists of Ordinance 2006-18, as amended by Ordinance 2006-

40 and Ordinance 2007-6; and the Rental Registration

Ordinance (“RO”), which consists of Ordinance 2006-13.2

These ordinances attempt to regulate the employment of

unauthorized aliens, and the provision of rental housing to aliens

2

On July 13, 2006, Hazleton enacted Ordinance 2006-10,

the first version of the IIRAO. On August 15, 2006, the City

enacted Ordinance 2006-13, the RO. On September 21, 2006,

Hazleton enacted Ordinance 2006-18, a revised version of the

IIRAO, which replaced Ordinance 2006-10 in its entirety. On

December 28, 2006, Hazleton enacted Ordinance 2006-40, which

amended the IIRAO by adding an “implementation and process”

section. Finally, during trial, the City enacted Ordinance 2007-6,

which again amended the IIRAO to provide that complaints based,

in full or in part, on national origin, ethnicity, or race, would be

considered invalid. The full-text of these ordinances is attached as

an Appendix.

13

lacking lawful immigration status, within Hazleton.

1. The Illegal Immigration Relief Act Ordinance

The IIRAO begins with a statement of findings and a

declaration of purpose, which asserts:

[t]hat unlawful employment, the harboring of illegal aliens in dwelling units

in the City of Hazleton, and crime committed by illegal aliens harm the health,

safety and welfare of authorized US workers and legal residents in the City of

Hazleton. Illegal immigration leads to higher crime rates, subjects our

hospitals to fiscal hardship and legal residents to substandard quality of care,

contributed to other burdens on public services, increasing their cost and

diminishing their availability to legal residents, and diminishes our overall

quality of life.

IIRAO § 2C.3 In response to these concerns, the IIRAO:

seeks to secure to those lawfully present in the United States and this City,

whether or not they are citizens of the United States, the right to live in peace

free from the threat [of] crime, to enjoy the public services provided by this

city without being burdened by the cost of providing goods, support and

services to aliens unlawfully present in the United States, and to be free of the

debilitating effects on their economic and social well being imposed by the

influx of illegal aliens to the fullest extent that these goals can be achieved

consistent with the Constitution and Laws of the United States and the

Commonwealth of Pennsylvania.

3

It is important to note that the parties hotly contest

whether aliens in Hazleton actually caused any of these purported

problems and whether Hazleton officials had any valid reason to

think they did. The district court did not make any factual findings

about the cause of any social or fiscal problems Hazleton may be

facing, and our discussion should not be interpreted as supporting

either side of that debate.

14

IIRAO § 2F.

Section 4 of the IIRAO asserts that it is unlawful “for any

business entity” to “recruit, hire for employment, or continue to

employ” or “permit, dispatch, or instruct any person” who is an

“unlawful worker” to perform work within Hazleton.4 IIRAO

§ 4A. Under the IIRAO, an “unlawful worker” is defined as: “a

person who does not have the legal right or authorization to

work due to an impediment in any provision of federal, state or

local law, including but not limited to a minor disqualified by

nonage, or an unauthorized alien as defined by [8 U.S.C. §

1324a(h)(3)].” IIRAO § 3E. Section 4A requires “[e]very

business entity that applies for a business permit” to “sign an

4

The IIRAO defines “business entity” broadly to mean

“any person or group of persons performing or engaging in any

activity, enterprise, profession, or occupation for gain, benefit,

advantage, or livelihood, whether for profit or not for profit.”

IIRAO § 3A. The term encompasses (but is not limited to) “self-

employed individuals, partnerships, corporations, contractors, and

subcontractors.” IIRAO § 3A(1). It includes “any business entity

that possesses a business permit, any business entity that is exempt

by law from obtaining such a business permit, and any business

entity that is operating unlawfully without such a business permit.”

IIRAO § 3A(2).

15

affidavit . . . affirming that they do not knowingly utilize the

services or hire any person who is an unlawful worker.” IIRAO

§ 4A.

Section 4 also provides for public monitoring,

prosecution, and sanctions. Any City resident may submit a

complaint to Hazleton’s Code Enforcement Office alleging that

a local business entity is violating the section’s prohibition on

utilizing the services of an unlawful worker. IIRAO § 4B(1).

Upon receipt of such complaint, the Code Enforcement Office

requests identity information about the alleged unlawful worker

from the employing business, and that business must provide the

information within three business days, or Hazleton will suspend

its business license. IIRAO § 4B(3). If the worker is alleged to

be an unauthorized alien, the Code Enforcement Office submits

any identity information received from the business to the

federal government, pursuant to 8 U.S.C. § 1373, for

verification of “the immigration status of such person(s).” 5 Id.

5

8 U.S.C. §1373(c) states: “The Immigration and

(continued...)

16

If the Code Enforcement Office confirms that the worker

lacks authorization to work in the United States, the business

must terminate that person within three business days or the City

will suspend its business license.6 IIRAO § 4B(4). Safe harbor

from this sanction is provided to businesses that verify the work

authorization of its workers through use of the “Basic Pilot

Program” (which has since been named “E-Verify”). IIRAO §

4B(5). E-Verify is a federal program for verifying work

authorization which Congress has authorized for use on a trial

basis.

A business whose license is suspended under the IIRAO

5

(...continued)

Naturalization Service shall respond to an inquiry by a Federal,

State, or local government agency, seeking to verify or ascertain

the citizenship or immigration status of any individual within the

jurisdiction of the agency for any purpose authorized by law, by

providing the requested verification or status information.”

6

This three business day period is tolled if the business

entity acquires further information about the worker and requests a

secondary verification from the federal government of the worker’s

authorization, or if the business entity tries to terminate the worker

and that worker challenges the termination in Pennsylvania state

court. IIRAO § 7C.

17

regains its license one business day after it submits an affidavit

affirming that it has terminated the unlawful worker. IIRAO §

4B(6). If a business is found to have employed two or more

unauthorized aliens at one time, it must also confirm its

enrollment in E-Verify in order to recover its license.7 IIRAO

§ 4B(6)(b). If a business entity violates the IIRAO a second

time, Hazleton suspends its license for a minimum of twenty

days and reports the violation, whether or not eventually

corrected, to the federal government. IIRAO § 4B(7).

The IIRAO further creates a private cause of action

against businesses that employ unlawful workers. Section 4E of

the IIRAO makes it “an unfair business practice” for a business

entity to discharge “an employee who is not an unlawful

worker,” if, on the date of the discharge, “the business entity

was not participating in [E-Verify] and the business entity was

employing an unlawful worker.” IIRAO § 4E(1). An employee

7

City agencies and business that contract with the City for

amounts greater than $10,000 are also required to enroll in E-

Verify. IIRAO § 4C-D.

18

discharged under these conditions may sue the business entity

under the IIRAO for treble actual damages, as well as

reasonable attorney’s fees and costs.8 IIRAO § 4E(2).

The IIRAO also addresses the “harboring” of persons

lacking lawful immigration status. Section 5 makes it “unlawful

for any person or business entity that owns a dwelling unit in the

City to harbor an illegal alien in the dwelling unit, knowing or

in reckless disregard of the fact that an alien has come to,

entered, or remains in the United States in violation of law.” 9

IIRAO § 5A. “Harboring” is broadly defined. The ordinance

states: “to let, lease, or rent a dwelling unit to an illegal alien .

. . shall be deemed to constitute harboring.” IIRAO § 5A(1).

Additionally, Section 7 of the IIRAO makes legal immigration

status a condition precedent to entering into a valid lease.

IIRAO § 7B. All leases entered into by persons lacking lawful

status are deemed breached. Id.

8

Even an employee who is properly terminated for cause

(or without cause in the case of an employee at will) has a cause of

action under this provision. The ordinance uses “lost” wages as a

measure of “damages.” IIRAO § 4E(2).

9

The IIRAO defines an “illegal alien” as “an alien who is

not lawfully present in the United States, according to the terms of

United States Code Title 8, section 1101 et seq.” IIRAO § 3D.

19

The mechanisms for enforcing the housing provisions of

the IIRAO are similar to those set forth above for enforcing the

employment provisions. Thus, any City resident may file a

complaint with Hazleton’s Code Enforcement Office alleging

that a property owner is illegally “harboring” a tenant who is an

“illegal alien.” IIRAO § 5B(1). Once such a complaint is

received, the Code Enforcement Office may request identifying

information about the named tenant from the property owner,

and the property owner must provide that information within

three days. IIRAO § 5A(3). The City then verifies the legality

of the tenant’s immigration status with the federal government,

pursuant to 8 U.S.C. § 1373(c). IIRAO § 5B(3).

If the federal government confirms that the tenant lacks

lawful immigration status, the IIRAO gives the property owner

five business days to evict that tenant. IIRAO § 5B(4). If the

owner fails to do so, the City suspends the owner’s rental license

and bars the owner from collecting any rent for the applicable

dwelling unit.10 IIRAO § 5B(4)-(5). These sanctions end one

10

This five business day period is tolled if the property

owner acquires further information about the tenant and requests a

secondary verification from the federal government of the tenant’s

immigration status, or if the property owner tries to evict the tenant

(continued...)

20

business day after the owner submits an affidavit affirming that

s/he has corrected the violation. IIRAO § 5B(6). Any

subsequent violation subjects the owner to a fine of $250.00 per

day per “adult illegal alien” harbored in a dwelling unit, as well

as suspension of her/his rental license. IIRAO §§ 5A(2), 5B(8).

2. The Rental Registration Ordinance

The RO operates in conjunction with the anti-harboring

provisions of the IIRAO. Section 7 of the RO requires that any

prospective occupant of rental housing over the age of eighteen

apply for and receive an occupancy permit. RO §§ 1m, 7b. To

receive that permit, the prospective occupant must pay a ten-

dollar fee and must submit certain documents, including

“[p]roper identification showing proof of legal citizenship

and/or residency” to Hazleton’s Code Enforcement Office. RO

§ 7b. Hazleton landlords are required to inform all prospective

occupants of this requirement, and they are prohibited from

allowing anyone over the age of eighteen to rent or occupy a

rental unit, unless that person has a permit. Id.

Section 10 of the RO provides that a landlord found

10

(...continued)

and that tenant challenges the eviction in Pennsylvania state court.

IIRAO § 7D.

21

guilty of renting to someone without a permit must pay an initial

fine of $1000 per unauthorized occupant, and an additional fine

of $100 per day per unauthorized occupant until the violation is

corrected. RO § 10b. An authorized occupant of rental housing

who is found guilty of permitting someone without a rental

permit to live in her/his apartment must pay the same fine. Id.

B. The Plaintiffs

The following six plaintiffs claim that they have standing

to bring this suit: Pedro Lozano, John Doe 1, John Doe 3, John

Doe 7, Jane Doe 5, and the Hazleton Hispanic Business

Association (“Plaintiffs”).11 These Plaintiffs include Hazleton

business entities, landlords, and tenants, as well as an

organization whose members include Hazleton business entities

and landlords. We briefly describe these Plaintiffs, and the

basic facts underlying each Plaintiff’s claim to standing.

Pedro Lozano is a lawful permanent resident who

immigrated to the United States from Colombia in January 2002.

Lozano, 496 F. Supp. 2d at 485-86. He owns a duplex in

11

Eleven plaintiffs filed the operative complaint. The

district court dismissed three of them for lack of standing, and that

portion of the district court’s decision is not being appealed. Of

the eight plaintiffs the district court found to have standing, only

six press their cases on appeal.

22

Hazleton and rents out half of it to help pay his mortgage. Id. at

488. He hires contractors to perform repairs on his property as

needed. Id. at 489.

John Doe 1 was born in Mexico, and had lived in

Hazleton for six years at the time of trial. Id. at 486. He is

unsure of his immigration status, but believes that he could be

removed from the United States. Id. He is similarly unsure of

his work authorization. Id. John Doe 1's landlord evicted him

because of the risk of being fined pursuant to the

aforementioned provisions of the IIRAO and the RO. Id. at 497.

John Doe 3 had lived in Hazleton for four years at the

time of trial. Id. at 486. He understands his immigration status

to be “illegal,” and he rents an apartment within Hazleton. Id.

at 497.

John Doe 7 and Jane Doe 5 were born in Columbia and

had lived in Hazleton for more than five years at the time of

trial. Id. at 486. They rent a house in Hazleton, but fear

eviction and being forced to leave Hazleton if the ordinances are

enforced. Id. at 497.

The Hazleton Hispanic Business Association (“HHBA”)

is an organization of business owners from the Hazleton area

23

that exists to “promote the interest of [its] business members and

to project the image of the Hispanic business community.” Id.

at 492 (internal quotation marks omitted). HHBA’s president,

Rudolfo Espinal, owns three rental properties in Hazleton and

hires contractors to perform repairs on those properties as

needed. Id. at 492-93.

C. Procedural History

As noted above, numerous plaintiffs filed this action for

injunctive relief based upon challenges to the validity of the

IIRAO and the RO. Lozano, 496 F. Supp. 2d at 485. The

district court granted these plaintiffs’ motion for a temporary

restraining order, and the parties agreed to extend that order

until the case could be resolved on its merits. Id. These

ordinances have never been enforced, and the challenges

asserted are facial.

The amended complaint alleges that the ordinances

violate the Supremacy Clause, the Due Process Clause, and the

Equal Protection Clause of the United States Constitution; 42

U.S.C. § 1981; the federal Fair Housing Act, 42 U.S.C. §§ 3601-

31; plaintiffs' privacy rights; Pennsylvania’s Home Rule Charter

Law, 53 Pa. Cons. Stat. §§ 2961-67; Pennsylvania’s Landlord

24

and Tenant Act, 68 Pa. Cons. Stat. §§ 250.101-50.602; and the

limits of Hazleton’s police powers. Id.

At the conclusion of a nine-day bench trial, the district

court issued a thorough opinion and order permanently enjoining

the City from enforcing the ordinances. The court concluded

that eight of the eleven plaintiffs had standing to challenge the

IIRAO and the RO, and that it was appropriate for the John and

Jane Doe Plaintiffs to proceed anonymously. The court held

that the IIRAO and the RO violate the Supremacy and Due

Process Clauses of the United States Constitution, as well as 42

U.S.C. § 1981. The court also held that Hazleton, as a City of

the Third Class, lacked authority under Pennsylvania’s Home

Rule Charter Law to create the IIRAO’s private cause of action,

and that it exceeded its police powers in enacting these

ordinances.12

This appeal followed. Hazleton argues that Plaintiffs

lack standing, and that the district court abused its discretion

both in permitting the John and Jane Doe Plaintiffs to proceed

anonymously and in issuing a confidentiality order prohibiting

12

The district court dismissed the Equal Protection, Fair

Housing Act, privacy, and Pennsylvania Landlord and Tenant Act

claims, and those portions of its order have also not been appealed.

25

Hazleton from disclosing the Doe Plaintiffs’ identity

information to the federal government. Hazleton further

contends that Plaintiffs’ claims are meritless, and that the

ordinances are valid under federal and state law.

III. JURISDICTION AND STANDARD OF REVIEW

The district court had jurisdiction pursuant to 28 U.S.C.

§§ 1331 and 1367. We have jurisdiction pursuant to 28 U.S.C.

§ 1291.

We review a district court’s conclusions of law de novo

and its factual findings for clear error. See, e.g., McCutcheon v.

Am.’s Servicing Co., 560 F.3d 143, 147 (3d Cir. 2009). We

review a district court’s grant of a motion to proceed

anonymously and grant of a confidentiality order for abuse of

discretion. Doe v. C.A.R.S. Prot. Plus, Inc., 527 F.3d 358, 371

& n.2 (3d Cir. 2008).

IV. SEVERABILITY AND STANDING

We first address the threshold question of Plaintiffs’

standing. Here, however, standing implicates the issue of

severability – an issue which has yet to be explicitly discussed

in this suit. As we explained in Contractors Ass’n v. City of

Philadelphia, “[c]ourts considering constitutional challenges to

26

statutes often analyze standing problems in terms of the

severability doctrine. . . . The severability doctrine governs

whether [plaintiffs] have standing to challenge [an] entire

[o]rdinance, or just [certain provisions].” 6 F.3d 990, 996 (3d

Cir. 1993).

Severability, however, like any non-jurisdictional issue,

can be waived, and it is clear that Hazleton has, with one

exception, waived issues of severability here. The district court

considered whether Plaintiffs have standing to challenge the

“employment provisions” and the “housing provisions” of these

ordinances as collective wholes, and conducted its merits

inquiries accordingly. See, e.g., Lozano, 496 F. Supp. 2d at 518

(“[T]he ordinances at issue have two distinct provisions, one

directed to employment issues and one aimed at landlord/tenant

issues, [and] we will discuss each topic separately with regard

to pre-emption.”). On appeal, Hazleton does not contest the

district court’s failure to further sever the ordinances. Rather,

Hazleton’s brief characterizes the ordinances the same way the

district court did. Thus, Hazleton argues that Plaintiffs lack

standing to challenge the “employment provisions” and the

“housing provisions,” and that the “employment provisions” and

27

the “housing provisions” are not pre-empted, without further

differentiating among those provisions.13

The sole severability issue Hazleton has not waived

concerns the IIRAO’s private cause of action. Hazleton has

argued that the private cause of action is severable from the rest

of the IIRAO’s “employment provisions” both in its brief and at

oral argument. Severability of a local ordinance is a question

of state law, and Pennsylvania law favors severability.

Contractors Ass’n, 6 F.3d at 997. Additionally, there is a

presumption in favor of severability where, as here, the

ordinances contain a severability provision. Id. For an

ordinance to be severable, “[t]he legislating body must have

intended that the act or ordinance be separable and the statute or

ordinance must be capable of separation in fact. The valid

portion of the enactment must be independent and complete

within itself.” Saulsbury v. Bethlehem Steel Co., 196 A.2d 664,

667 (Pa. 1964) (emphasis omitted).

13

We note that Hazleton’s waiver of this issue likely speaks

to the merits of a severability analysis as well, as severability often

turns significantly on intent. If Hazleton had truly intended each

provision of the IIRAO and the RO to operate independently, and

to stand or fall independently of the other provisions of this

regulatory scheme, it surely would have pressed that point

sometime during this litigation. It has not done so.

28

Here the IIRAO’s severability provision indicates that

Hazleton’s City Council did intend the private cause of action

provision to be severable from the balance of its regulatory

scheme. Furthermore, the private cause of action is not

intertwined with the other “employment provisions,” most of

which concern business licensing requirements. It can operate

independently and is “capable of separation in fact.” Id. We

therefore conclude that it is severable. Accordingly, we will

evaluate Plaintiffs’ standing to challenge the IIRAO’s private

cause of action independently of their standing to challenge the

other “employment provisions” and the “housing provisions.”

In essence, the question of standing asks “whether the

litigant[s] [are] entitled to have the court decide the merits of the

dispute.” Warth v. Seldin, 422 U.S. 490, 498 (1975). As we

will explain, we conclude that there is at least one Plaintiff with

standing to challenge the employment and housing provisions of

these ordinances. Accordingly, we must consider the merits of

the challenges to those provisions. See Rumsfeld v. Forum for

Academic and Institutional Rights, Inc., 547 U.S. 47, 53 n.2

(2006) (“[T]he presence of one party with standing is sufficient

to satisfy Article III’s case-or-controversy requirement.”).

29

However, as we will also explain, we find that no Plaintiff has

standing to challenge the IIRAO’s private cause of action.

Accordingly, review of the legality of that provision must await

a challenge by a plaintiff who can establish an Article III injury.

A. General Principles of Standing

The irreducible minimum of any standing inquiry derives

directly from Article III of the United States Constitution. See

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).

Article III limits the jurisdiction of federal courts to “Cases” and

“Controversies.” U.S. Const. art. III, § 2; see also Lujan, 504

U.S. at 559-60. The judicial power established by Article III is

therefore not “an unconditioned authority to determine the

constitutionality of legislative or executive acts.” Hein v.

Freedom From Religion Found., Inc., 551 U.S. 587, 598 (2007)

(internal quotation marks omitted). Rather, federal courts are

permitted to address these questions only if actually adjudicating

“the rights of individuals.” Id. (internal quotation marks

omitted). Thus, the inquiry into standing must focus on whether

a claim is being brought “by a party whose interests entitle him

to raise it.” Id. (internal quotation marks omitted). A plaintiff’s

“interests” satisfy Article III when the following three elements

30

are present:

First, the plaintiff must have suffered an injury in

fact – an invasion of a legally protected interest

which is (a) concrete and particularized, and (b)

actual or imminent, not conjectural or

hypothetical. Second, there must be a causal

connection between the injury and the conduct

complained of – the injury has to be fairly

traceable to the challenged action of the

defendant, and not the result of the independent

action of some third party not before the court.

Third, it must be likely, as opposed to merely

speculative, that the injury will be redressed by a

favorable decision.

Lujan, 504 U.S. at 560-61 (internal citations, quotation marks,

and alterations omitted).

In addition to these constitutionally required elements of

standing, federal courts have developed a body of self-imposed

limitations on the exercise of their judicial power. See Elk

Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11 (2004); see

also Oxford Assocs. v. Waste Sys. Auth., 271 F.3d 140, 145 (3d

Cir. 2001). Accordingly, “[e]ven in cases concededly within our

jurisdiction under Article III,” we will decline to decide the

merits of a case when these “prudential standing” requirements

are not satisfied. Elk Grove Unified Sch. Dist., 542 U.S. at 11.

Prudential standing encompasses: “the general prohibition on a

litigant's raising another person's legal rights, the rule barring

31

adjudication of generalized grievances more appropriately

addressed in the representative branches, and the requirement

that a plaintiff's complaint fall within the zone of interests

protected by the law invoked.” Allen v. Wright, 468 U.S. 737,

751 (1984).

An organization wishing to bring suit on behalf of its

members must satisfy a specific combination of constitutional

and prudential standing requirements. See United Food and

Commercial Workers Union Local 751 v. Brown Grp., Inc., 517

U.S. 544, 556-57 (1996) (explaining that the first two prongs of

the associational standing test are constitutional, while the third

prong is prudential). To establish that it has “associational

standing” and can represent its members’ interests in federal

court, an organization must show that:

(a) its members would otherwise have standing to

sue in their own right; (b) the interests it seeks to

protect are germane to the organization’s purpose;

and (c) neither the claim asserted nor the relief

requested requires the participation of individual

members in the lawsuit.

Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343

(1977).

Here, Plaintiffs claim that Lozano and the HHBA have

32

standing to challenge the employment provisions of the IIRAO,

and that Lozano, the HHBA, and the Doe Plaintiffs have

standing to challenge the housing provisions of the IIRAO and

the RO.

B. Constitutional Standing

1. The Employment Provisions

As discussed above, the IIRAO’s employment provisions

require businesses to submit affidavits affirming that they do not

utilize the services of unlawful workers; incentivize, and in

certain circumstances mandate, the use of E-Verify; create

procedures for adjudicating independently of federal law

whether a business has employed an unauthorized alien; and

penalize a business for doing so by suspending its business

license.

The district court held that Lozano had standing to

challenge these provisions for himself, and that the HHBA had

standing to challenge them on behalf of its member, Rudolfo

Espinal.14 Lozano is a landlord, and Espinal is a landlord and

14

Assuming the other requirements of associational

standing are met, one member with standing is sufficient for an

organization to have standing. See Hunt, 432 U.S. at 342 (“[A]n

association may have standing solely as the representative of its

(continued...)

33

owner of a real estate agency. Both are business entities under

the IIRAO,15 and both sometimes hire contractors to perform

work on their rental properties. Accordingly, the district court

found that they faced imminent concrete injury, because if the

IIRAO were enforced, they would be compelled “to comply

with [its] employer requirements . . . adding a burden of time

14

(...continued)

members. . . . The association must allege that its members, or any

one of them, are suffering immediate or threatened injury as a

result of the challenged action of the sort that would make out a

justiciable case had the members themselves brought suit.”)

(alteration in original) (internal quotation marks omitted)

(emphasis added).

15

The employment provisions of the IIRAO regulate the

behavior of all “business entities,” a term which as we noted

above, is defined expansively and includes even those entities that

do not have or need business licenses. At the same time,

compliance with these provisions is primarily, although not

entirely, coerced through regulating the provision of business

licenses. Lozano and Espinal are plainly business entities under

the IIRAO; however, neither has testified as to whether he has a

business license.

We agree with the Court of Appeals for the Eighth Circuit

when faced with the same issue in Gray v. City of Valley Park, 567

F.3d 976 (8th Cir. 2009), that this does not deprive them of

standing. Regardless of whether these Plaintiffs have business

licenses, the IIRAO applies to them as business entities, and they

“must, as law-abiding citizens, comply and conform their conduct

according to [the ordinance’s] directives.” Id. at 985; see also id.

at 986 (“At the very least, as a business entity covered by the

ordinance, [plaintiffs] may not knowingly recruit, hire for

employment, or continue to employ, an unlawful worker to

perform work within the City. And, when a valid complaint is

lodged, [plaintiffs] would be required to . . . provide identity

information to the . . . Code Enforcement Office.”) (internal

citation omitted).

34

and expense to [their] operations.” See Lozano, 496 F. Supp. 2d

at 489. Hazleton challenges the district court’s conclusion on

several grounds.

Hazleton’s primary argument on appeal is that the

“injury” these Plaintiffs face is nothing more than the “cost of

compliance” with the IIRAO, and that this is a generalized

burden insufficiently particularized to satisfy the injury-in-fact

requirement of Article III. It is well-established that an injury

must be particularized to support standing. A “particularized”

injury is one that “affect[s] the plaintiff in a personal and

individual way,” Alston v. Countrywide Fin. Corp., 585 F.3d

753, 763 (3d Cir. 2009) (quoting Lujan, 504 U.S. at 560 n.1)

(internal quotation marks omitted), and is established when a

plaintiff shows that s/he has “sustained or is immediately in

danger of sustaining some direct injury . . . and not merely that

[s/]he suffers in some indefinite way in common with people

generally,” Ams. United for Separation of Church & State v.

Reagan, 786 F.2d 194, 199 (3d Cir. 1986) (internal quotation

marks omitted).

Thus, the Supreme Court has rejected attempts by

taxpayers to bring suits challenging the government’s use of tax

35

dollars. For instance, in Frothingham v. Mellon, 262 U.S. 447

(1923), the Supreme Court held that a taxpayer lacked standing

to challenge a federal appropriations act that she alleged

violated the Tenth Amendment. The Court explained that the

harm a taxpayer suffers when the government unlawfully uses

taxpayer funds is “shared with millions of others [and]

comparatively minute and indeterminable.” Id. at 487. Because

such an injury is a matter “of public and not of individual

concern,” it is not particularized, and therefore insufficient to

give rise to Article III standing. Id. The Court has reaffirmed

this conclusion many times since, explaining that:

a plaintiff raising only a generally available

grievance about government – claiming only harm

to his and every citizen’s interest in proper

application of the Constitution and laws, and

seeking relief that no more directly and tangibly

benefits him than it does the public at large – does

not state an Article III case or controversy.

Lujan, 504 U.S. at 573-74.

Hazleton attempts to transpose these principles into a

quite different context. Hazleton suggests that because all

business entities in Hazleton are required to comply with the

IIRAO, the burden of complying with the ordinance is

“generalized” and not “particularized.” Accordingly, it argues

36

that Lozano and Espinal – and presumably all business entities

in Hazleton – lack standing to challenge the IIRAO’s provisions

affecting them. The argument could not be more misguided.

Plaintiffs here are not members of the general public

complaining of some indefinite and indeterminable harm, such

as the unconstitutional expenditure of their tax-dollars. Rather,

Lozano and Espinal are direct targets of an ordinance they allege

to be unconstitutional, complaining of what that ordinance

would compel them to do. Thus, the appropriate comparison is

not to taxpayers seeking invalidation of government

expenditures, but to taxpayers seeking invalidation of taxes

imposed on them. As the Supreme Court explained in Hein, 551

U.S. at 599, it is incontrovertible that taxpayers in this second

category have standing: “[o]f course, a taxpayer has standing to

challenge the collection of a specific tax assessment as

unconstitutional; being forced to pay such a tax causes a real and

immediate economic injury to the individual taxpayer.”

Furthermore, Hazleton’s insistence that these Plaintiffs

lack standing because their injuries are widely-shared (at least

among business entities in Hazleton) is misplaced. The fact that

an injury is widely-shared is not the primary focus of the

37

particularized inquiry. See Fed. Election Comm’n v. Akins, 524

U.S. 11, 23-24 (1998). As the Supreme Court explained in

United States v. Students Challenging Regulatory Agency

Procedures (“SCRAP”), 412 U.S. 669, 688 (1973), “[t]o deny

standing to persons who are in fact injured simply because many

others are also injured, would mean that the most injurious and

widespread Government actions could be questioned by nobody.

We cannot accept this conclusion.” The question of particularity

turns on the nature of the harm, not on the total number of

persons affected.

Lozano and Espinal will not suffer in some “indefinite

way in common with people generally” if the IIRAO is

enforced. Frothingham, 262 U.S. at 488. Rather, they will be

affected in a “personal and individual way” by what the IIRAO

requires of them. Lujan, 504 U.S. at 561 n.1. Enforcement of

the IIRAO would create coercive pressures compelling them to

investigate the work authorization status of the prospective

contractors they seek to hire. Additionally, they would be

required to submit affidavits to Hazleton’s Code Enforcement

Office affirming that they do not knowingly utilize the services

of “unlawful workers.” Failure to comply with either directive

38

could result in significant sanctions. These costly requirements,

imposed directly and purposefully on these Plaintiffs, are a

particularized injury-in-fact.

Hazleton also argues that even if the “cost of

compliance” is a theoretically sufficient injury under Article III,

these Plaintiffs fail to show that the cost of compliance with the

IIRAO is greater than the cost of compliance with federal law.

Thus, argues Hazleton, these Plaintiffs fail to show that there

would be any actual cost of compliance with the IIRAO itself.

Hazleton is mistaken. Federal law certainly does not require

anyone to submit an affidavit to Hazleton’s Code Enforcement

Office. Though relatively small, that cost is sufficient for

standing purposes. “[A]n identifiable trifle is enough for

standing.” See SCRAP, 412 U.S. at 689 n.14 (internal quotation

marks omitted).

The IIRAO is also much broader than federal law, and

coerces as well as incentivizes different behaviors. Lozano and

Espinal testified that they only hire workers to perform discrete

repair projects on their rental properties as needed. See J.A.

1116, 1122 (Lozano has “problems with [his] roof” and intends

to hire “a contractor” to make repairs.); J.A. 1216, 1221 (Espinal

39

intends to hire someone to do “plumbing” and “electrical”

repairs as part of the ongoing renovations of his rental

properties. He also anticipates hiring someone for tasks such as

“shoveling snow.”). Such workers would almost certainly be

considered independent contractors under federal law. As we

discuss in greater detail below, the federal requirement that

employers verify the work authorization status of their

employees does not apply to independent contractors. Thus,

federal law would not require either Lozano or Espinal to

determine such persons’ work authorization status. In contrast,

the IIRAO prohibits Plaintiff business owners from

“permit[ting], dispatch[ing], or instruct[ing] any person who is

an unlawful worker to perform work” (regardless of whether the

person is an employee or an independent contractor), and thus

compels them to verify the work authorization of any worker

whose services they utilize. IIRAO § 4A; see also J.A. 1444.

Therefore, we reject Hazleton’s attempt to refute the standing of

Lozano and Espinal by arguing that the IIRAO imposes no

burdens beyond those imposed by federal law. It clearly does.

Lozano and Espinal have established that if the IIRAO is

enforced, it will cause them particularized injury redressable by

40

this court. Since the employment provisions of the IIRAO apply

to independent contractors, Lozano and Espinal (and therefore

the HHBA) have standing to challenge those provisions.

However, it is much less clear whether the private cause of

action applies to independent contractors, and we must

separately evaluate whether Lozano or Espinal have standing to

challenge that provision

2. Private Cause of Action

Unlike the other employment provisions of the IIRAO,

which impose restrictions on a business entity not only when it

“hire[s] for employment, or continue[s] to employ” an

employee, but also whenever it “permit[s], dispatch[es], or

instruct[s] any person . . . to perform work,” IIRAO § 4A, the

private cause of action on its face affords rights only to an

“aggrieved employee.” IIRAO § 4E (emphasis added). Under

Section 4E of the IIRAO, it is an “unfair business practice” for

a business entity to terminate “any employee who is not an

unlawful worker” while it continues to employ an unlawful

worker. Id. If it does so, the business entity is liable to the

“aggrieved employee” for treble damages. Id. Whereas the rest

of the IIRAO speaks of “workers,” the section creating the

41

private cause of action appears to inure solely to the benefit of

“employees.”

Lozano and Espinal have not testified that they currently

employ anyone who would be considered an “employee,” nor

has either testified about any intent to do so. Moreover, even if

they had – or even if we were to construe this section as also

inuring to the benefit of discharged independent contractors –

Lozano and Espinal have not testified that they have plans to

hire more than one person, employee or contractor, at any one

time, and the record is insufficient to support such a finding.

Yet, the IIRAO’s private cause of action arises only if at least

two persons work for the same business entity at the same time.

Additionally, unlike other provisions they testified about,

Lozano and Espinal did not testify that they fear prosecution

under the private cause of action provision or that they have any

reason to fear such prosecution.

We realize, of course, that the threat of future prosecution

can certainly be a sufficiently “imminent” injury to support

Article III standing. See Pa. v. W. Va., 262 U.S. 553, 593

(1923) (“One does not have to await the consummation of

threatened injury to obtain preventive relief.”). However, that

42

threat must be more than a possibility dependent on multiple

contingencies that may never occur. See, e.g., Caribbean

Marine Servs. Co. v. Baldrige, 844 F.2d 668, 675 (9th Cir.

1988) (explaining that fears of liability reliant on multiple

contingencies do not give a plaintiff standing). Lozano and

Espinal would be injured by Section 4E of the IIRAO only if

they proceeded to hire multiple employees, terminated one while

retaining another, and were sued by (or had reason to fear suit

by) the terminated employee. This attenuated sequence of

events is not even suggested by this record, and it is therefore

too tenuous to support a conclusion that either has the requisite

personal interest to establish a “case” or “controversy.”

Accordingly, we conclude that the district court lacked

jurisdiction to consider the merits of these Plaintiffs’ challenges

to the IIRAO’s private cause of action.

3. Housing Provisions

The housing provisions of the IIRAO prohibit the

knowing or reckless harboring of “illegal aliens” (defined to

include the knowing or reckless provision of rental housing);

subject landlords who violate this prohibition to significant

monetary sanctions; and invalidate any lease entered into by

43

persons lacking lawful immigration status. The RO requires all

persons over the age of eighteen who seek to live in rented

property to obtain an occupancy permit; makes possession of

documentation of lawful immigration status a requirement for

receiving that permit; prohibits landlords from renting to

persons who lack a permit; and subjects landlords who do so to

suspension of their rental license and a concomitant prohibition

on collecting rent from the dwelling units involved.

The district court held that Lozano, the HHBA (again on

behalf of its member Espinal), and the Doe Plaintiffs have

standing as landlords and tenants to challenge the housing

provisions of the IIRAO and the RO.

a. Landlord Plaintiffs

The district court concluded that landlords Lozano and

Espinal had suffered a constitutionally sufficient injury-in-fact

because the housing provisions made it more difficult for them

to rent apartments. The court also concluded they had standing

because Hazleton’s enforcement of the housing provisions

would directly impose certain requirements on them, costing

them both time and money. See Lozano, 496 F. Supp. 2d at 488-

89. Hazleton contests the court’s conclusions on several

44

grounds.

Hazleton first argues that the record fails to support the

district court’s finding that the housing provisions made it more

difficult for Lozano and Espinal to rent their properties.

According to Hazleton, the record reveals that the landlords had

the same “mixed success” in renting apartments both before and

after passage of the ordinances. Hazleton’s Br. 23. Hazleton

therefore claims that Lozano and Espinal have suffered no injury

at all. We cannot agree.

The district court’s finding that both Lozano and Espinal

had more difficulty finding tenants for their properties following

passage of the IIRAO and the RO is supported by the record,

and certainly not clearly erroneous. Lozano testified that tenants

who had been renting from him since he acquired his rental

property in 2005 “ran away” upon learning about the ordinances

in mid-2006. J.A. 1108. Lozano further testified that he has

been able to find tenants only sporadically since then, and that

at least one prospective tenant, who had been quite interested in

an apartment, reacted with concern and quickly departed after

Lozano informed him about the requirements of the IIRAO and

the RO. J.A. 1111-12. Espinal similarly testified that he has

45

had more difficulty in renting apartments since passage of the

ordinances, and that on at least one occasion, he showed an

apartment to potential tenants, who “were going to take [it],” but

after telling these applicants about the ordinances, “they never

called [him] back.” J.A. 1215. The record therefore supports

the district court’s conclusion that Lozano and Espinal suffered

sufficient injury to establish Article III standing.

Hazleton next argues that even if Lozano and Espinal did

lose tenants and rental income because of these ordinances, such

an injury is not “legally cognizable” because landlords have no

right to rent to illegal aliens. Hazleton makes the rather

hyperbolic metaphor of comparing these Plaintiffs to “drug

dealers” asserting a claim to the proceeds of their unlawful

activity. The City states: “[j]ust as a drug dealer has no legally-

cognizable interest in income derived from violations of federal

drug laws, a landlord has no legally-cognizable interest in

income derived from continuing violations of federal

immigration law.” Hazleton’s Br. 24. Hazleton’s comparison

is as regrettable as it is unsound.

It is unfortunate that we must point out that there is no

evidence in the record that the prospective tenants who chose

46

not to rent from Plaintiffs were here unlawfully, as Hazleton’s

argument presumes. There are certainly other reasons why such

invasive ordinances might dissuade a prospective tenant from

renting in Hazleton. However, even if we were to assume that

all deterred tenants were here unlawfully, we would still

conclude that Plaintiffs assert an injury cognizable under the

law.

By comparing landlords to persons who sell drugs in

direct contravention of federal law, Hazleton distorts both the

applicable law and the interests these Plaintiffs assert. Federal

law simply does not prohibit landlords from renting (in the

ordinary course of business) to persons who lack lawful

immigration status. Nor does federal law directly prohibit

persons lacking lawful status from renting apartments. As we

discuss in further detail below, there is a federal prohibition

against “harboring” of aliens lacking lawful presence. However,

this prohibition is not nearly so broad as Hazleton’s, and has

never been held to apply to a landlord who does nothing more

than rent to a tenant who happens to be here unlawfully. In light

of these realities, we think the interest that these Plaintiffs assert

is more appropriately characterized as an interest in continuing

47

to operate their rental businesses consistent with the less costly

mandates of federal law, and that is an interest which supports

Article III standing.

Hazleton also argues that these Plaintiffs fail to establish

that the IIRAO and the RO caused whatever injury they have

suffered because actions of independent third-parties (the

potential tenants) are responsible for that injury, not the

ordinances themselves. Hazleton draws its argument from the

discussion of causation in Lujan. There, the Supreme Court

explained that when the “plaintiff is himself an object” of a

challenged government action, “there is ordinarily little question

that the action . . . has caused him injury, and that a judgment .

. . will redress it.” Lujan, 504 U.S. at 561-62. However, when

a plaintiff’s asserted injury arises from the

government’s allegedly unlawful regulation (or

lack of regulation) of someone else, much more is

needed. In that circumstance, causation and

redressability ordinarily hinge on the response of

the regulated (or regulable) third party to the

government action or inaction – and perhaps on

the response of others as well. . . . Thus, when the

plaintiff is not himself the object of the

government action or inaction he challenges,

standing is not precluded, but it is ordinarily

substantially more difficult to establish.

Lujan, 504 U.S. at 562 (internal quotation marks omitted).

48

Hazleton contends that the landlord Plaintiffs cannot satisfy this

higher burden.

In Pitt News v. Fisher, 215 F.3d 354 (3d Cir. 2000), we

discussed when the regulation of a third-party “causes” a

plaintiff’s injury for the purposes of Article III. There,

Pennsylvania had amended its Liquor Code to impose criminal

sanctions on businesses that advertised alcoholic beverages in

publications directed at educational institutions. The Pitt News,

a student-run newspaper at the University of Pittsburgh, sued to

enjoin enforcement of this amendment, and asserted standing

based on the fact that its advertising revenues had suffered

because of advertisers’ compliance with the law. The district

court held that “indirect economic effects resulting from a

regulation aimed at third parties” were insufficient to give The

Pitt News standing. Id. at 358.

In reversing that ruling, we explained that the advertisers

would not have cancelled their contracts with The Pitt News

were it not for the regulation. The fact that advertisers would

cancel their contracts, thereby reducing advertising revenues,

“was not only reasonably foreseeable when the Commonwealth

decided to enact and enforce [the Act], it was the very goal of

49

the statute.” Id. at 361 (internal citation omitted). Accordingly,

we concluded that the injury the newspaper suffered was “fairly

traceable” to enforcement of the statute against its advertisers.

The situation in Pitt News is analogous to the situation

here. The housing provisions of the IIRAO and the RO have

already deterred certain renters from contracting for housing

with Lozano and Espinal, and these ordinances will continue to

deter other renters if they are enforced. This deterrence “was

not only reasonably foreseeable” when Hazleton enacted these

ordinances, it was Hazleton’s “very goal.” Id. The injuries

Lozano and Espinal assert are a direct, predictable, and

anticipated consequence of the regulation. Accordingly, their

injuries are “fairly traceable” to the ordinances.

Moreover, Hazleton’s argument ignores that Lozano and

Espinal are not just directly impacted by the ordinances, but

directly regulated as well. The housing provisions of the IIRAO

and the RO regulate both tenants and landlords. Although the

injury on which Hazleton focuses, the injury of lost rental

income, is caused by the requirements imposed on tenants, the

district court found, and we certainly agree, that these landlords

would be equally injured by the requirements the IIRAO and the

50

RO impose on them. Thus, even if we agreed with all of

Hazleton’s arguments thus far, we would still conclude that

Lozano and Espinal have standing. The housing provisions of

the IIRAO and the RO regulate the ability of landlords to

contract with certain persons. They require landlords to explain

the ordinances to all prospective renters and to examine those

renters’ occupancy permits. More generally, they compel

landlords to act as local enforcers of immigration law in ways

that far exceed their obligations under federal law. Compliance

with these requirements elevates the cost of doing business as a

landlord, and that alone gives them Article III standing.16

16

We note, however, that the RO explicitly exempts from

its registration and license requirements those “[p]roperties which

consist of a double home, half of which is let for occupancy and

half of which is Owner-occupied as the Owner’s residence.” RO §

11d. At trial, Lozano testified that he owns a “two-family” home.

J.A. 1107. He lives in one unit with his family, and rents out the

other unit, which is subdivided into two separate apartments, to

help him pay the mortgage. See J.A. 1107-08. To our knowledge,

the parties have not raised whether the “double home” exception

applies to Lozano, and the district court did not address the issue.

If that exception does apply, Lozano could not establish a sufficient

injury to challenge the RO. See Addiction Specialists, Inc. v. Twp.

of Hampton, 411 F.3d 399, 405 (3d Cir. 2005) (explaining that

because standing is a jurisdictional issue, it cannot be waived, and

the court must, when necessary, consider it sua sponte). However,

even assuming that Lozano is exempt from the RO, other Plaintiffs

would still have standing to challenge that ordinance, and we

therefore would still have jurisdiction to review it.

51

b. Tenant Plaintiffs

Because “[t]he loss (or imminent loss) of one’s apartment

and the inability to rent a new one is certainly an actual and

concrete injury,” caused by the ordinances and

redressable by the court, the district court concluded that the

Doe Plaintiffs, who lack lawful immigration status, also have

standing to challenge the housing provisions of the IIRAO and

the RO. Lozano, 496 F. Supp. 2d at 497-98.

Hazleton first argues that the district court erred in

finding that John Does 3 and 7 and Jane Doe 5 face imminent

injury. According to Hazleton, their fears of eviction are merely

conjectural because “none of them have been evicted or have

received any threat or warning that they might be evicted in the

future.” 17 Hazleton’s Br. 20. We are entirely unconvinced.

17

Hazleton does not extend this argument to John Doe 1,

which is wise since John Doe 1 was evicted by his landlord

because of these ordinances. See J.A. 831-32. Hazleton does

challenge John Doe 1's standing, however, based on its contention

that John Doe 1 is lawfully present in this country. We recognize

that the record contains conflicting testimony as to John Doe 1's

immigration status. On the one hand, John Doe 1 testified that his

father, a United States citizen, submitted a “petition” to make John

Doe 1 a “legal resident,” and that the United States government

approved that petition. J.A. 808-09. On the other hand, John Doe

1 testified that he is unsure of his immigration status and his work

authorization, that he believes he is removable, and that he is “not

here legally.” See J.A. 809-10, 832. We therefore cannot conclude

(continued...)

52

These Plaintiffs all testified that they feared losing their

apartments and having to move elsewhere. See J.A. 888, 929,

951. Hazleton cites John Doe 3's testimony that he did not

expect to be evicted because his landlord “doesn’t care much

about” the ordinances, J.A. 888, as evidence that he faces no

imminent injury. However, Hazleton misconstrues this

testimony. John Doe 3 later explained that he had been told by

his landlord’s agent that his landlord did not expect the

ordinances to ever go into effect, and for that reason, John Doe

3 had been unconcerned. See J.A. 889-90. He also testified that

he has no reason to believe that his landlord would not comply

with the ordinances if they are enforced. J.A. 889-90. Given

the harsh sanctions the IIRAO and the RO would impose on any

landlord who rented to him or the other Doe Plaintiffs, such

fears are plainly well-founded. The possibility of eviction is

therefore much more than “conjecture.” A plaintiff need only

show “a realistic danger of sustaining a direct injury as a result

17

(...continued)

that the district court’s findings as to the legitimacy of his fears

were clearly erroneous. Regardless of John Doe 1's precise legal

status, we think that he has established standing. He has been

evicted because of the ordinances, and his own understanding of –

and his ability to prove – his status is sufficiently uncertain that he

is quite likely to suffer further injury if the ordinances are enforced.

53

of the statute’s operation or enforcement,” and the Doe Plaintiffs

clearly do so. Babbitt v. United Farm Workers Nat’l Union, 442

U.S. 289, 298 (1979).

Hazleton also raises here the converse of its argument

above: it contends that the Doe Plaintiffs lack standing because

their claimed injuries would be caused by third-party landlords,

and not the ordinances. This verges on the ridiculous. Just as

Hazleton’s ordinances compel tenants not to rent from Plaintiff

landlords, they compel landlords not to rent to Plaintiff tenants.

The Doe Plaintiffs’ fears that their landlords will not rent to

them – because the IIRAO and the RO require those landlords

not rent to them – are certainly “fairly traceable” to the

ordinances. Additionally, as Hazleton well knows, these

ordinances directly regulate tenants as well, and therefore would

injure the Doe Plaintiffs regardless of their landlords’ reactions

to them. The IIRAO and the RO would invalidate their leases,

and would require them to pay a fee and provide documentation

(which they lack) in order to continue renting apartments in

Hazleton. These injuries easily satisfy Article III.

Finally, Hazleton argues that the Doe Plaintiffs fail to

establish redressability because, even if this Court struck down

54

the ordinances, the Doe Plaintiffs would still be subject to

removal. According to Hazleton, this Court cannot grant “a

remedy that takes the Doe [P]laintiffs out of legal jeopardy.

They will still be in violation of federal law and subject to

removal.” Hazleton’s Br. 21. Hazleton greatly overstates the

demands of this element of constitutional standing.

As the Supreme Court explained in Larson v. Valente,

456 U.S. 228, 243 n.15 (1982), “a plaintiff satisfies the

redressability requirement when he shows that a favorable

decision will relieve a discrete injury to himself. He need not

show that a favorable decision will relieve his every injury.”

Redressability therefore does not require that a court be able to

solve all of a plaintiff’s woes. Rather, we need only be able to

redress, to some extent, the specific injury underlying the suit.

See Mass. v. EPA, 549 U.S. 497, 526 (2007) (holding that

redressability prong was satisfied because risk of global climate

change would be reduced “to some extent” by relief requested).

By permanently enjoining enforcement of the housing

provisions of the IIRAO and the RO, this court can provide

meaningful redress for the injury the Doe Plaintiffs assert. Such

relief would substantially decrease the likelihood that they will

55

be evicted and/or unable to procure rental housing while they

remain in the United States. That is more than sufficient to

establish standing.

Because Lozano, HHBA member Espinal, and the Doe

Plaintiffs will suffer injury caused by the ordinances and

redressable by the court, we conclude that they have Article III

standing to challenge the housing provisions of the IIRAO and

the RO.

C. Prudential Standing

Even when a plaintiff satisfies Article III standing

requirements, federal courts may nonetheless decline to consider

that plaintiff’s claims for prudential reasons. Hazleton contends

that there are two prudential considerations which counsel

restraint here.

Hazleton first argues that Plaintiffs lack prudential

standing because they do not fall within the “zone of interests”

protected by federal immigration law. Hazleton misstates the

applicable zone of interests inquiry in the pre-emption context.

The Supreme Court has explained that a plaintiff may

bring suit only when the interests s/he asserts are “arguably

within the zone of interests to be protected or regulated by the

56

statute or constitutional guarantee in question.” Ass’n of Data

Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153 (1970).

This limitation on standing arose in suits challenging agency

action under the Administrative Procedure Act (“APA”), 5

U.S.C. § 702, but has since been employed more broadly. See

Bennett v. Spear, 520 U.S. 154, 163 (1997) (The “zone-of-

interests test [was first applied] to suits under the APA, but later

cases have applied it also in suits not involving review of federal

administrative action and have specifically listed it among other

prudential standing requirements of general application.”)

(internal citations omitted). However, outside of the

administrative law context, the test may have different

permutations, see Conte Bros. Auto., Inc. v. Quaker State-Slick

50, Inc., 165 F.3d 221, 226 (3d Cir. 1998), and “the breadth of

the zone of interests [will vary] according to the provisions of

law at issue,” Bennett, 520 U.S. at 163.

Thus, in the pre-emption context, we have explained that

the relevant prudential inquiry is not whether a plaintiff’s

interests fall within the zone protected by the allegedly pre-

empting federal provision, in this case, federal immigration law.

In St. Thomas-St. John Hotel & Tourism Ass’n v. Virgin Islands,

57

218 F.3d 232 (3d Cir. 2000), several employer organizations

brought suit to enjoin a Virgin Islands law establishing that

employees could only be terminated for cause. The plaintiffs

alleged that this law was pre-empted by the National Labor

Relations Act (“NLRA”), 29 U.S.C. §§ 151-169. On appeal,

defendants argued that plaintiffs lacked prudential standing to

invoke the pre-emptive effect of the NLRA, because the

NLRA’s zone of interests did not encompass employers’

interests in terminating their employees. We agreed with the

defendants’ characterization of the NLRA’s zone of interests,

but found this no bar to employers’ prudential standing. We

explained:

We know of no governing authority to the effect

that the federal statutory provision which

allegedly preempts enforcement of local

legislation by conflict must confer a right on the

party that argues in favor of preemption. On the

contrary, a state or territorial law can be

unenforceable as preempted by federal law even

when the federal law secures no individual

substantive rights for the party arguing

preemption.

Id. at 241.

Pre-emption suits arise under the Supremacy Clause and

vindicate the interests of that Clause, not the interests of the pre-

58

empting federal provision. Therefore, the appropriate prudential

inquiry in pre-emption cases (if any such inquiry is necessary at

all) must be whether the plaintiff’s interests fall within the zone

protected by the Supremacy Clause itself. See, e.g., Wilderness

Soc’y v. Kane Cnty., 581 F.3d 1198, 1217 n.11 (10th Cir. 2009)

(declining to decide if zone of interests test applies in pre-

emption cases, but emphasizing that if it does, “the relevant

zone of interest is that of the Supremacy Clause and not of the

allegedly preempting federal statute”); Pharm. Research & Mfrs.

v. Concannon, 249 F.3d 66, 73 (1st Cir. 2001) (In a pre-emption

case, “it is the interests protected by the Supremacy Clause, not

by the preempting statute, that are at issue.”). These interests,

which are no less than our society’s interest in a working

federalism, are societal, not individual. Accordingly, all

Plaintiffs fall within their breadth, and have prudential standing

here.

Hazleton also argues that we should, as a matter of

prudential standing, refuse to adjudicate the Doe Plaintiffs’

claims because they concede that they lack lawful immigration

status. Hazleton relies on National Coalition of Latino Clergy,

Inc. v. Henry, No. 07-CV-613, 2007 WL 4390650 (N.D. Okla.

59

Dec. 12, 2007), the unpublished decision of a lone federal

district court as support for its contention.18

In Henry, the District Court for the Northern District of

Oklahoma considered challenges to the Oklahoma Taxpayer and

Citizen Protection Act of 2007, a law which mirrors the IIRAO

in several respects (and which, in subsequently-filed litigation,

Chamber of Commerce v. Edmondson, 594 F.3d 742 (10th Cir.

2010), was preliminarily enjoined in part). The court concluded

that those plaintiffs lacking lawful immigration status had

Article III standing, but nonetheless held that it would not

consider their claims for prudential reasons. Explaining that

courts have traditionally refused to entertain cases brought by

plaintiffs with “unclean hands,” it reasoned that the “illegal alien

Plaintiffs seek nothing more than to use this Court as a vehicle

for their continued unlawful presence in this country.” Id., at

*9. To allow them to do so, the court concluded, would make

it an “abetter of iniquity,” a result it found “unpalatable.” Id.

The court thus adopted “a new, and narrow, prudential

18

As a general rule, we do not consider arguments arising

out of unpublished decisions, and do so here solely for the

purposes of putting to bed Hazleton’s argument, which we find

particularly troubling.

60

limitation” on standing:

[a]n illegal alien, in willful violation of federal

immigration law, is without standing to challenge

the constitutionality of a state law, when

compliance with federal law would absolve the

illegal alien’s constitutional dilemma –

particularly when the challenged state law was

enacted to discourage violation of the federal

immigration law.

Id.

Hazleton argues that, for the reasons articulated in Henry,

we “too must prudentially decline to take jurisdiction with

respect to the Doe Appellees.” Hazleton’s Br. 19. Henry’s

invented bar to judicial access is entirely improper, and we will

not accept Hazleton’s invitation to duplicate that error here.

The Henry decision, both in substance and tone, fails to

appreciate that whatever a person’s immigration status, “an alien

is surely a ‘person’” entitled to Due Process Clause protections.

Plyler, 457 U.S. at 210; see also Wolff v. McDonnell, 418 U.S.

539, 579 (1974) (“The right of access to the courts . . . is

founded in the Due Process Clause and assures that no person

will be denied the opportunity to present to the judiciary

allegations concerning violations of fundamental constitutional

rights.”). The Supreme Court therefore has certainly considered

61

judicial challenges brought by persons lacking lawful

immigration status, see, e.g., Plyler, even when “compliance

with federal law” would have absolved “the illegal alien’s

constitutional dilemma,” Henry, 2007 WL 4390650, at *9.

Henry defends its rule by claiming that it would not deny

persons without lawful status all access to the courts, as they

would retain prudential standing to sue for harms unrelated to

their status. But this caveat assures little. As this case

demonstrates, all it takes for a harm to become “related to” a

person’s immigration status is for some legislative body to

decree it so. The scope of these aliens’ rights would therefore,

under Henry’s reasoning, be entirely dependent on the will of

state and local legislatures, which could tie any consequence of

their choosing to unlawful status and never face judicial review.

The Doe Plaintiffs satisfy Article III standing

requirements, and the prudential standing requirements of

general applicability set forth by the Supreme Court.

Accordingly, we will address their claims. However, two more

preliminary issues must be resolved before we do so.

V. ANONYMITY AND CONFIDENTIALITY

Hazleton argues that the district court erred in permitting

62

those Plaintiffs lacking lawful immigration status to proceed

using a “John Doe” or “Jane Doe” pseudonym. We disagree.

In C.A.R.S. Protection Plus, we explained that although

“the use of pseudonyms to conceal a plaintiff’s identity has no

explicit sanction in the federal rules,” the Supreme Court has

“given the practice implicit recognition.” 527 F.3d at 371 n.2.

We thus concluded that “the decision whether to allow a

plaintiff to proceed anonymously rests within the sound

discretion of the court.” Id.

In deciding whether to permit those Plaintiffs with

concerns about the legality of their immigration status to

proceed anonymously, the district court surveyed case law

within this Circuit and identified nine separate factors courts

have used to decide whether anonymity is appropriate. See

Lozano, 496 F. Supp. 2d at 506. The court then engaged in a

thorough analysis of each of these factors, and concluded that

the factors favoring anonymity outweighed those favoring

disclosure. Specifically, the court found that ethnic tensions had

escalated in Hazleton since enactment of the ordinances, and

that the named Plaintiffs had been harassed and intimidated for

63

their involvement in this litigation.19 See id. at 508-10. The

court concluded that the Doe Plaintiffs, because of their

unlawful status, would face an “exponentially greater” risk of

harassment, and even physical danger, if their identities were

revealed. Id. at 510. The court also noted that the litigation was

in the public interest, and reasoned that the Doe Plaintiffs, as

well as prospective litigants lacking lawful status, would be

deterred from bringing cases clarifying constitutional rights, if

doing so required alerting federal immigration authorities to

their presence. See id. at 511-12. Finally, the court explained

19

Lozano, for example, testified that hate mail was sent to

his home three separate times. One letter “contained a clipping

from a newspaper describing the [alleged] effects of illegal

immigration as well as a picture of a ‘warrior’ wearing ‘a huge

Mexican hat.’ Scrawled near this picture were the phrases,

‘[s]ubhuman spic scum’ and ‘[i]f it is brown, flush it down.’”

Lozano, 496 F. Supp. 2d at 510 (alterations in original) (internal

quotation marks and citation omitted). This letter also contained a

link to a website proclaiming itself “the Official Home Page of the

National Socialist Movement, an organization dedicated to the

preservation of our Proud Aryan Heritage, and the creation of a

National Socialist Society in America and around the world.” Id.

at 510 n.34 (internal quotation marks omitted). The district court

noted that this sort of harassment extended even to people who

were merely perceived as being connected to the lawsuit, even if

this perception was not rooted in fact. Amilcar Arroyo, a United

States citizen who publishes a Hazleton-based Spanish-language

newspaper, was publically harassed when he tried to cover a rally

in support of the ordinances. Based on a rumor that he was a

plaintiff in this suit, rally participants gathered around him

shouting, “get out of the country” and “traitor.” Id. at 510 (internal

quotation marks omitted). Police escorted Arroyo from the rally

for his own protection. Id.

64

that because the Doe Plaintiffs’ identity information was not

central to their claims, restricting Hazleton’s access to that

information would not be prejudicial. See id. at 513. We agree

with each of these conclusions, and think it clear that given the

environment in Hazleton following enactment of these

ordinances, the court did not abuse its discretion in permitting

the Doe Plaintiffs to proceed using pseudonyms.

Relatedly, Hazleton also argues that the district court

violated 8 U.S.C. § 1373(a) by entering an order prohibiting the

parties from disclosing “information obtained during discovery

regarding the John and Jane Doe plaintiffs.” J.A. 211. Section

1373(a) provides:

Notwithstanding any other provision of Federal,

State, or local law, a Federal, State, or local

government entity or official may not prohibit, or

in any way restrict, any government entity or

official from sending to, or receiving from, the

Immigration and Naturalization Service

information regarding the citizenship or

immigration status, lawful or unlawful, of any

individual.

8 U.S.C. § 1373(a). Hazleton argues that because the district

court is an entity of the federal government, it was prohibited

by this section from preventing Hazleton from communicating

with federal immigration authorities about “the citizenship or

65

immigration status” of the Doe Plaintiffs.

Although we are not convinced that § 1373(a) does, or

could, limit the inherent powers of federal courts in the way

Hazleton suggests, we need not reach this question because

Hazleton’s argument fails for a more fundamental reason.

Under the confidentiality agreement the parties eventually

entered into, the Doe Plaintiffs agreed to reveal their identities

only to Hazleton’s attorneys, and not to Hazleton officials. See

J.A. 692-707. Consequently, Hazleton never learned these

Plaintiffs’ identities or their immigration status. The district

court simply could not have prohibited Hazleton from

communicating with the federal government about information

that Hazleton never knew.

VI. DISCUSSION

Having resolved these preliminary issues, we can turn to

the merits of the claims before us. Although our reasoning

differs from that of the district court, we agree that the

provisions of the ordinances which we have jurisdiction to

review are pre-empted by federal immigration law and

unconstitutional under the Supremacy Clause. Because that

conclusion turns on the relationship between the ordinances and

66

federal immigration law, we begin our inquiry into the merits of

this appeal by briefly laying out the parameters of that law.

A. Federal Immigration Law

1. The Immigration and Nationality Act

The primary body of federal immigration law is

contained in the Immigration and Nationality Act (“INA”), 8

U.S.C. §§ 1101-537, enacted in 1952, and amended many times

thereafter. The INA sets forth the criteria by which “aliens,”

defined as “any person not a citizen or a national of the United

States,” 8 U.S.C. § 1101(a)(3), may enter, visit, and reside in

this country.

Under the INA, there are three primary categories of

aliens who may lawfully enter and/or spend time within the

United States: (1) “nonimmigrants,” who are persons admitted

for a limited purpose and for a limited amount of time, such as

visitors for pleasure, students, diplomats, and temporary

workers, see 8 U.S.C. § 1101(a)(15); (2) “immigrants,” who are

persons admitted as (or after admission, become) lawful

permanent residents of the United States based on, inter alia,

family, employment, or diversity characteristics, see 8 U.S.C. §

1151; and (3) “refugees” and “asylees,” who are persons

67

admitted to and permitted to stay for some time in the United

States because of humanitarian concerns, see 8 U.S.C. §§ 1157-

58.20 Aliens wishing to be legally admitted into the United

States must satisfy specific eligibility criteria in one of these

categories, and also not be barred by other provisions of federal

law that determine inadmissibility. Congress has determined

that non-citizens who, inter alia, have certain health conditions,

have been convicted of certain crimes, present security concerns,

or have been recently removed from the United States, are

inadmissible, see 8 U.S.C. § 1182, and if detained when

attempting to enter or reenter the country, may be subject to

expedited removal, see 8 U.S.C. § 1225.

Despite the carefully designed system for lawful entry

described above, persons lacking lawful immigration status are

obviously still present in the United States. As the Supreme

Court explained almost thirty years ago: “[s]heer incapability or

lax enforcement of the laws barring entry into this country . . .

20

Congress has also ratified treaties pursuant to which

persons may be admitted on humanitarian grounds even if they do

not satisfy the statutory definition of “refugee” set forth in the INA.

See United Nations Convention Against Torture and Other Cruel,

Inhuman or Degrading Treatment or Punishment, art. 3, Apr. 18,

1988, 1465 U.N.T.S. 85.

68

has resulted in the creation of a substantial ‘shadow population’

. . . within our borders.” Plyler, 457 U.S. at 218. Such persons

may lack lawful status because they entered the United States

illegally, either by failing to register with immigration

authorities or by failing to disclose information that would have

rendered them inadmissible when they entered. See 8 U.S.C. §

1227. In addition, aliens who entered legally may thereafter lose

lawful status, either by failing to adhere to a condition of

admission, or by committing prohibited acts (such as certain

criminal offenses) after being admitted. See id.

Persons here unlawfully are subject to removal from the

country. Removal proceedings are initiated at the discretion of

the Department of Homeland Security (“DHS”).21 See Juarez v.

21

Prior to 2003, the Immigration and Naturalization Service

(“INS”), which operated under the Department of Justice,

administrated both immigration services and immigration

enforcement. On March 1, 2003, Congress abolished the INS.

Pursuant to the Homeland Security Act of 2002, Pub. L. No. 107-

296, 116 Stat. 2135, that agency’s functions were transferred to

three separate agencies within the newly created Department of

Homeland Security: U.S. Citizenship and Immigration Services

(“USCIS”), which performs immigration and naturalization

services, U.S. Immigration and Customs Enforcement (“ICE”),

which enforces federal immigration and customs laws, and U.S.

Customs and Border Protection (“CBP”), which monitors and

secures the country’s borders. Older documents may continue to

refer to the pre-2003 administrative structure, and citations to them

should be understood in that context.

69

Holder, 599 F.3d 560, 566 (7th Cir. 2010) (“[T]he decision

when to initiate removal proceedings is committed to the

discretion of immigration authorities.” (citing Reno v. Am.-Arab

Anti-Discrimination Comm., 525 U.S. 471, 489 (1999))).

Although certain aliens are subject to more expedited removal

proceedings,22 for all others, section 240 of the INA sets forth

the “sole and exclusive procedure for determining whether an

alien may be admitted to the United States or, if the alien has

been so admitted, removed from the United States.” 8 U.S.C. §

1229a(a)(3).

Under section 240, an alien facing removal is entitled to

a hearing before an immigration judge and is provided numerous

procedural protections during that hearing, including notice, the

opportunity to present and examine evidence, and the

opportunity to be represented by counsel (at the alien’s

expense). See 8 U.S.C. § 1229a. At the conclusion of a removal

hearing, the presiding immigration judge must decide, based on

22

As noted above, inadmissible aliens detained at the

borders of the United States, or others deemed not to have been

“admitted” to the country, may be subject to expedited removal.

See 8 U.S.C. § 1225. In addition, expedited removal procedures

apply to certain aliens already within the country who have been

convicted of congressionally-defined crimes. See 8 U.S.C. § 1228.

70

the evidence produced during the hearing, whether the alien is

removable, see 8 U.S.C. § 1229a(c)(1)(A), and if so, whether

s/he should be ordered removed, or should be afforded relief

from removal. Such relief can include postponement of

removal, cancellation of removal, or even adjustment of status

to that of lawful permanent resident. See 8 U.S.C. §§

1229a(c)(4), 1229b.

In sum, while any alien who is in the United States

unlawfully faces the prospect of removal proceedings being

initiated against her/him, whether s/he will actually be ordered

removed is never a certainty until all legal proceedings have

concluded. Moreover, even after an order of removal issues, the

possibility remains that no country will accept the alien. Under

such circumstances, the Constitution limits the government’s

authority to detain someone in anticipation of removal if there

is no significant likelihood of removal in the reasonably

foreseeable future. See Zadvydas v. Davis, 533 U.S. 678, 699

(2001).23

23

In Zadvydas, the Court addressed the cases of two aliens

who had been ordered removed from the United States, but who,

for various reasons, no other country would accept. The

government sought to continue detaining them nonetheless. The

(continued...)

71

The INA, as amended, also prohibits the “harboring” of

aliens lacking lawful immigration status. It provides that any

person who “knowing or in reckless disregard of the fact that an

alien has come to, entered, or remains in the United States in

violation of law, conceals, harbors, or shields from detection .

. . such alien in any place, including any building or any means

or transportation” shall be subject to criminal penalties. 8

U.S.C. § 1324(a)(1)(A)(iii).

For decades, the INA contained no specific prohibition

against the employment of aliens lacking legal status. Rather,

regulation of the employment of aliens not lawfully present was

at most a “peripheral concern.” DeCanas v. Bica, 424 U.S. 351,

360 (1976). This changed in 1986, when Congress amended the

INA through enactment of the Immigration Reform and Control

Act (“IRCA”), Pub. L. No. 99-603, 100 Stat. 3359 (codified at

8 U.S.C. §§ 1324a-1324b). IRCA “forcefully made combating

the employment of illegal aliens central to the policy of

23

(...continued)

Court held that the Due Process Clause imposed reasonableness

limits on post-removal-period detention, and thus that the

government could not continue the aliens’ detention indefinitely if

there was “no significant likelihood of removal in the reasonably

foreseeable future.” 533 U.S. at 701.

72

immigration law.” Hoffman Plastic Compounds, Inc. v.

National Labor Relations Board, 535 U.S. 137, 147 (2002)

(internal quotation marks and alterations omitted).

2. The Immigration Reform and Control Act

IRCA regulates the employment of “unauthorized

aliens,” a term of art defined by the statute as those aliens

neither “lawfully admitted for permanent residence” nor

“authorized to be . . . employed by this chapter or by the

Attorney General.” 8 U.S.C. § 1324a(h)(3). IRCA makes it

unlawful to knowingly hire or continue to employ an

unauthorized alien, or to hire anyone for employment without

complying with the work authorization verification system

created by the statute. 8 U.S.C. § 1324a(a)(1)-(2). This

verification system, often referred to as the “I-9 process,”

requires that an employer examine certain documents that

establish both identity and employment authorization for new

employees. See 8 U.S.C. § 1324a(b). The employer must then

fill out an I-9 form attesting that s/he reviewed these documents,

that they reasonably appear to be genuine, and that to the best of

the employer’s knowledge, the employee is authorized to work

in the United States. See id. Although employers are required

73

to verify the work authorization of all employees, Congress did

not extend this requirement to independent contractors. See 8

U.S.C. § 1324a(a)(1) (making unlawful the knowing

“employment” of an unauthorized alien, and the hiring of an

employee for “employment” without verifying the employee’s

work authorization); 8 C.F.R. § 274a.1(f) (specifically excluding

“independent contractors” from the definition of “employee”);

8 C.F.R. § 274a.1(g) (specifically excluding a “person or entity

using . . . contract labor” from the definition of “employer”).

The I-9 “verification system is critical to the IRCA

regime.” Hoffman Plastic Compounds, 535 U.S. at 147-48. Not

only is failure to use the system illegal, but use of the system

provides an affirmative defense to a charge of knowingly

employing an unauthorized alien. See 8 U.S.C. § 1324a(a)(3).

Thus, employers who use the I-9 process in good faith to verify

the work authorization of employees are presumed not to have

knowingly employed someone unauthorized to work in this

country. In enacting IRCA, Congress required the President to

monitor the security and efficacy of this verification system. See

8 U.S.C. § 1324a(d). Congress also imposed limits on the

President’s ability to change it. Id.

74

In addition to relying on the I-9 verification system,

IRCA uses public monitoring, prosecution, and sanctions to

deter employment of unauthorized aliens. IRCA provides for

the creation of procedures through which members of the public

may file complaints about potential violations; it authorizes

immigration officers to investigate these complaints; and it

creates a comprehensive hearing and appeals process through

which complaints are evaluated and adjudicated by

administrative law judges. See 8 U.S.C. § 1324a(e)(1)-(3).

Under IRCA, an employer who knowingly hires an

unauthorized alien shall be ordered to cease and desist the

violation, and to pay between $250 and $2000 per unauthorized

alien for a first offense, between $2000 and $5000 per

unauthorized alien for a second offense, and between $3000 and

$10,000 per unauthorized alien for a third or greater offense. 8

U.S.C. § 1324a(e)(4). An employer who fails to verify the work

authorization of its employees can be ordered to pay between

$100 and $1000 for each person whose authorization it failed to

authenticate. 8 U.S.C. § 1324a(e)(5). Employers who engage

in a “pattern or practice” of hiring unauthorized aliens shall be

fined up to $3000 per unauthorized alien, imprisoned for not

75

more than six months, or both. 8 U.S.C. § 1324a(f)(1).

IRCA expressly pre-empts states and localities from

imposing additional “civil or criminal sanctions (other than

through licensing and similar laws) upon those who employ, or

recruit or refer for a fee for employment, unauthorized aliens.”

8 U.S.C. § 1324a(h)(2).

Because of its concern that prohibiting the employment

of unauthorized aliens might result in employment

discrimination against authorized workers who appear to be

foreign, Congress included significant anti-discrimination

protections in IRCA. See 8 U.S.C. § 1324b.24 The statute

provides that, with certain limited exceptions, it is an “unfair

immigration-related employment practice” to discriminate in

hiring on the basis of national origin or citizenship status. 8

24

8 U.S.C. § 1324b provides in relevant part that:

[with certain limited exceptions, it] is an unfair immigration-related

employment practice for a person or other entity to discriminate

against any individual (other than an unauthorized alien, as defined

in section 1324a(h)(3) of this title) with respect to the hiring, or

recruitment or referral for a fee, of the individual for employment or

the discharging of the individual from employment – (A) because of

such individual's national origin, or (B) in the case of a protected

individual . . . because of such individual's citizenship status.

8 U.S.C. § 1324b(a). Any person adversely-affected by an unfair

immigration-related employment practice “may file a charge

respecting such practice or violation.” 8 U.S.C. § 1324b(b)(1).

76

U.S.C. § 1324b(a)(1). Congress put teeth into this provision by

creating the office of a “Special Counsel” to investigate and

prosecute such offenses, and it required that the President fill

that position “with the advice and consent of the Senate.” 8

U.S.C. § 1324b(c).25 Congress also authorized immigration

judges to punish those who violate IRCA’s anti-discrimination

mandate by imposing civil fines equivalent in amount to those

imposed for knowingly hiring unauthorized aliens. Compare 8

U.S.C. § 1324a(e)(4)(A)(i)-(iii) with 8 U.S.C. §

1324b(g)(2)(B)(iv)(I)-(III).26

25

8 U.S.C. § 1324b(c) provides in relevant part that “[t]he

President shall appoint, by and with the advice and consent of the

Senate, a Special Counsel for Immigration-Related Unfair

Employment Practices.” 8 U.S.C. § 1324b(c)(1). The Special

Counsel “shall be responsible for investigation of charges and

issuance of complaints under this section and in respect of the

prosecution of all such complaints before administrative law

judges.” 8 U.S.C. § 1324b(c)(2).

26

There are some differences between the two sections.

The imposition of monetary sanctions under § 1324a is mandatory,

but discretionary under § 1324b. Compare 8 U.S.C. §

1324a(e)(4)(A) with 8 U.S.C. § 1324b(g)(2)(B)(iv). Also, criminal

penalties are available for certain pattern-or-practice violations

under § 1324a, but not available under § 1324b. See 8 U.S.C. §

1324a(f)(1). In contrast, § 1324b provides for compensatory relief,

such as backpay and other remedies, which is not available under §

1324a. See 8 U.S.C. § 1324b(g)(2)(B)(iii) and (vii)-(viii).

77

3. The Illegal Immigration Reform and Immigrant

Responsibility Act

In 1996, Congress again amended the INA by enacting

the Illegal Immigration Reform and Immigrant Responsibility

Act (“IIRIRA”), Pub. L. No. 104-208, 110 Stat. 3009 (codified

as amended in various sections of 8 U.S.C.). In IIRIRA,

Congress directed the Attorney General, and later the Secretary

of Homeland Security, to conduct three “pilot programs of

employment eligibility confirmation” in an attempt to improve

upon the I-9 process. IIRIRA § 401(a), 110 Stat. 3009-655.

Congress mandated that these programs be conducted on a trial

basis, for a limited time period, and in a limited number of

states. See IIRIRA § 401(b)-(c), 110 Stat. 3009-655-66. Two

of these trial systems were discontinued in 2003. However, the

third – originally known as the “Basic Pilot Program” but since

renamed “E-Verify” – was reauthorized and expanded to all fifty

states in 2003. See Basic Pilot Program Extension and

Expansion Act of 2003, Pub. L. No. 108-156, §§ 2, 3, 117 Stat.

1944. It has been reauthorized several times since, and its

current authorization will expire, absent congressional action, on

September 30, 2012. See Department of Homeland Security

78

Appropriations Act, 2010, Pub. L. No. 111-83, § 547, 123 Stat.

2177; Consolidated Security, Disaster Assistance, and

Continuing Appropriations Act, 2009, Pub. L. No. 110-329, Div.

A, § 143, 122 Stat. 3580.

E-Verify allows an employer to actually authenticate

applicable documents rather than merely visually scan them for

genuineness. When using E-Verify, an employer enters

information from an employee’s documents into an internet-

based computer program, and that information is then

transmitted to the Social Security Administration and/or DHS

for authentication. See IIRIRA, as amended, § 403(a)(3). These

agencies confirm or tentatively nonconfirm whether the

employee’s documents are authentic, and whether the employee

is authorized to work in the United States. See IIRIRA, as

amended, § 403(a)(4). If a tentative nonconfirmation is issued,

the employer must notify the employee, who may contest the

result. See id. If an employee does not contest the tentative

result within the statutorily prescribed period, the tentative

nonconfirmation becomes a final nonconfirmation. See id. If

the employee does contest it, the appropriate agencies undertake

additional review and ultimately issue a final decision. See id.

79

An employer may not take any adverse action against an

employee until it receives a final nonconfirmation. See id.

However, once a final nonconfirmation is received, an employer

is expected to terminate the employee, or face sanctions.

With only a few exceptions, federal law makes the

decision of whether to use E-Verify rather than the default I-9

process entirely voluntary. See IIRIRA, as amended, § 402(a).

Federal government employers and certain employers previously

found guilty of violating IRCA are currently required to use E-

Verify; all other employers remain free to use the system of their

choice.23 See IIRIRA, as amended, § 402(e). Significantly, in

enacting IIRIRA, Congress specifically prohibited the Secretary

of Homeland Security from requiring “any person or other entity

to participate in [E-Verify].” See IIRIRA, as amended, § 402(a).

Congress also directed the Secretary to publicize the “voluntary

nature” of the program and to ensure that government

representatives are available to “inform persons and other

entities that seek information about [E-Verify] of [its] voluntary

23

Pursuant to an executive order by President George W.

Bush, certain federal government contractors are now also required

to use E-Verify. See Exec. Order No. 13,465, 73 Fed. Reg. 33,286

(Jun. 6, 2008).

80

nature.” IIRIRA, as amended, § 402(d).

Those employers who elect to use E-Verify and actually

do use the system to confirm an employee’s authorization to

work are entitled to a rebuttable presumption that they did not

hire that employee knowing that s/he lacks authorization to work

in this country. See IIRIRA, as amended, § 402(b)(1).

Employers who elect to use E-Verify, but in practice continue to

use the I-9 process, are not entitled to the E-Verify rebuttable

presumption, but can still claim the I-9 affirmative defense. See

IIRIRA, as amended, § 402(b)(2).

B. State and Local Immigration Laws

As we noted at the outset, state and local attempts to

regulate issues related to immigration have skyrocketed in recent

years. According to the National Conference of State

Legislatures (“NCSL”), 300 bills pertaining to immigration were

introduced in state legislatures in 2005, and thirty-eight of them

were enacted into law. National Conference on State

Legislatures, 2009 State Laws Related to Immigrants and

Immigration January 1-December 31, 2009,

http://www.ncsl.org/default.aspx?tabid=19232 (last visited Aug.

20, 2010). Less than five years later, these numbers had

81

increased more than five-fold: in 2009, over 1,500 bills

pertaining to immigration were introduced. From these, 222

laws were enacted, and 131 resolutions adopted. Id.

A number of these laws contain provisions that are either

identical, or similar, to provisions in Hazleton’s ordinances.24

In their brief filed on behalf of Plaintiffs, Amici Curiae

Chambers of Commerce note that Arizona, Mississippi,

Oklahoma, Utah, Tennessee, Louisiana, West Virginia,

Colorado, Minnesota, Georgia, and Rhode Island, as well as the

municipalities of Valley Park, Missouri; Mission Viejo,

California; Beaufort County, South Carolina; and Apple Valley,

California, have all enacted laws that in some way regulate

either the procedures employers must undertake in order to

avoid hiring unauthorized aliens, or the penalties that can be

imposed for doing so. In addition, Plaintiffs call our attention

to several localities, including Escondido, California and the

City of Farmers Branch, Texas, which have passed ordinances

regulating the provision of rental housing to aliens not lawfully

present in the United States.

24

In fact, Hazleton’s mayor got the idea of enacting the

IIRAO and the RO from similar ordinances, considered but never

passed, in San Bernardino, California. See J.A. 1385-87.

82

Various challenges have been leveled at these enactments

– most commonly, attacks rooted in the Supremacy Clause – and

the resulting body of case law informs our analysis. The Court

of Appeals for the Ninth Circuit, affirming a decision by the

District Court for the District of Arizona, upheld an Arizona

statute requiring all employers within the state to use E-Verify,

and subjecting businesses that employ unauthorized aliens to a

graduated series of sanctions up to and including the permanent

revocation of their business licenses. That court rejected the

plaintiffs’ pre-emption and due process claims. See Chicanos

Por La Causa, Inc. v. Napolitano, 558 F.3d 856 (9th Cir. 2009),

cert. granted, 78 U.S.L.W. 3065 (Jun. 28, 2010) (No. 09-115).

The District Court for the Eastern District of Missouri also

upheld an employment ordinance virtually identical to the

IIRAO against pre-emption, due process, and equal protection

challenges, as well as challenges based on state law. See Gray

v. City of Valley Park, No. 4:07CV00881, 2008 WL 294294

(E.D. Mo. Jan. 31, 2008), aff’d on other grounds, 567 F.3d 976

(8th Cir. 2009).

In contrast, the Court of Appeals for the Tenth Circuit

partially affirmed a preliminary injunction issued by the District

83

Court for the Western District of Oklahoma, barring

enforcement of certain provisions of an Oklahoma law on pre-

emption grounds. Much like the IIRAO, that law required

employers in Oklahoma to verify the work authorization of

independent contractors, and also created a private cause of

action against business entities that employ unauthorized aliens.

See Chamber of Commerce v. Edmondson, 594 F.3d 742 (10th

Cir. 2010).

The District Courts for the Southern District of California

and the Northern District of Texas have held that ordinances

similar to the housing provisions of the IIRAO and the RO are

pre-empted. See Villas at Parkside Partners v. City of Farmers

Branch (“Farmers Branch III”), ___ F. Supp. 2d ___, Nos.

3:08-cv-1551-B, 3:03-cv-1615, 2010 WL 1141398 (N.D. Tex.

Mar. 24, 2010); Villas at Parkside Partners v. City of Farmers

Branch (“Farmers Branch II”), 577 F. Supp. 2d 858 (N.D. Tex.

2008); Garrett v. City of Escondido, 465 F. Supp. 2d 1043 (S.D.

Cal. 2006).

C. Pre-emption

As we have explained, the district court entered the

challenged injunction because it concluded that the IIRAO and

84

the RO, among other failings, are pre-empted by federal law.

Although our reasoning departs from that of the district court,

we agree with its conclusion.25 See Johnson v Orr, 776 F.2d 75,

83 n.7 (3d Cir. 1985) (“An appellate court may affirm a result

reached by the district court on reasons that differ so long as the

record supports the judgment.”).

The Supremacy Clause of the United States Constitution

provides that the laws of the United States “shall be the supreme

25

Plaintiffs present a facial challenge to these ordinances.

In Washington State Grange v. Washington State Republican

Party, the Supreme Court explained:

Under United States v. Salerno, 481 U.S. 739

(1987), a plaintiff can only succeed in a facial

challenge by “establish[ing] that no set of

circumstances exists under which the Act would be

valid,” i.e. that the law is unconstitutional in all of

its applications. Id. at 745. While some Members

of the Court have criticized the Salerno formulation,

all agree that a facial challenge must fail where the

statute has a “plainly legitimate sweep.”

Washington v. Glucksberg, 521 U.S. 702, 739-40

and n.7 (1997).

552 U.S. 442, 449 (2008) (alteration in original). Based on this

language, Hazleton insists that we must apply the Salerno standard

to Plaintiffs’ claims under the Supremacy Clause. However, since

both Washington State Grange and Salerno involved quite

different constitutional challenges than the ones we consider here,

it is not at all clear that Salerno applies. Nonetheless, it is clear

that solely “hypothetical conflicts” between state and local

enactments and federal law are usually insufficient to support a

finding of pre-emption. See Schneidewind v. ANR Pipeline Co.,

485 U.S. 293, 310 (1988).

85

Law of the Land . . . any Thing in the Constitution or Laws of

any State to the Contrary notwithstanding.” U.S. Const. art. VI,

cl. 2. The pre-emption doctrine is a necessary outgrowth of the

Supremacy Clause. It ensures that when Congress either

expresses or implies an intent to preclude certain state or local

legislation, offending enactments cannot stand.

As this Court has recently noted, “the Supreme Court has

recognized three types of preemption: express preemption,

implied conflict preemption, and field preemption.” Bruesewitz

v. Wyeth Inc., 561 F.3d 233, 238-239 (3d Cir. 2009) (citing

Hillsborough County, Fla., v. Automated Med. Labs., Inc., 471

U.S. 707, 713(1985). Both conflict pre-emption and field pre-

emption are types of implied pre-emption. See, e.g.,

Hillsborough Cnty. v. Automated Med. Labs, Inc., 471 U.S. 707,

713 (1985). However, irrespective of the “type” of pre-emption

involved, “the purpose of Congress” is the “touchstone” of any

pre-emption inquiry. Wyeth v. Levine, 129 S.Ct. 1187, 1194

(2009) (internal quotation marks omitted).

However, it is important to note that Congress does not

“cavalierly” pre-empt states or municipalities from acting within

the parameters of their historic police powers. Medtronic, Inc.

86

v. Lohr, 518 U.S. 470, 485 (1996). Accordingly, in pre-emption

inquiries, we assume “that the historic police powers of the

States were not to be superseded by the Federal Act unless that

was the clear and manifest purpose of Congress.” Id. (internal

quotation marks omitted). When states act beyond the scope of

their historic police powers, however, and wander into “an area

where there has been a history of significant federal presence,”

we do not begin with this assumption of nonpre-emption.

United States v. Locke, 529 U.S. 89, 108 (2000).

Express pre-emption occurs when Congress expressly

declares a law’s pre-emptive effect. See Lorillard Tobacco Co.

v. Reilly, 533 U.S. 525, 541 (2001). In such cases, “our task is

to identify the domain expressly pre-empted.” Id. In doing so,

we focus in the first instance “on the plain wording of the

[federal statute’s pre-emption] clause, which necessarily

contains the best evidence of Congress’ pre-emptive intent.”

Sprietsma v. Mercury Marine, 537 U.S. 51, 62-63 (2002)

(internal quotation marks omitted). We also consider the

“structure and purpose of the statute as a whole . . . as revealed

not only in the text, but through [our] reasoned understanding of

the way in which Congress intended the statute and its

87

surrounding regulatory scheme to [operate].” Medtronic, 518

U.S. at 486 (internal quotation marks and citation omitted).

Implied field pre-emption occurs when state or local

governments attempt regulation in a field which Congress has

implied an intent to exclusively occupy. See English v. Gen.

Electric Co., 496 U.S. 72, 79 (1990). Congress’s intent to

occupy a field can be inferred where a federal regulatory scheme

is “so pervasive as to make reasonable the inference that

Congress left no room for the States to supplement it,” Gade v.

Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88, 98 (1992)

(internal quotation marks omitted), or where an Act of Congress

“touch[es] a field in which the federal interest is so dominant

that the federal system will be assumed to preclude enforcement

of state laws on the same subject,” Rice v. Santa Fe Elevator

Corp., 331 U.S. 218, 230 (1947).

Implied conflict pre-emption occurs where it is

“impossible . . . to comply with both state and federal law,”

Geier v. Am. Honda Motor Co., 529 U.S. 861, 873 (2000)

(internal quotation marks omitted), or where state law “stands as

an obstacle to the accomplishment and execution of the full

purposes and objectives of Congress,” Hines v. Davidowitz, 312

88

U.S. 52, 67 (1941). “Impossibility” conflict pre-emption exists

only where it is truly impossible to comply with both federal and

state law. “Obstacle” conflict pre-emption, on the other hand,

requires a broader inquiry into the purposes underlying a federal

statute, and whether a state law stands as an obstacle to

effectuation of those purposes. “What is a sufficient obstacle is

a matter of judgment, to be informed by examining the federal

statute as a whole and identifying its purpose and intended

effects.” Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363,

373 (2000).

The Supreme Court has long made clear that federal

interests are paramount in the field of immigration. The Court

explained seventy years ago: “[t]hat the supremacy of the

national power in the general field of foreign affairs, including

power over immigration, naturalization and deportation, is made

clear by the Constitution was pointed out by authors of The

Federalist in 1787, and has since been given continuous

recognition by this Court.” Hines, 312 U.S. at 62; see also Toll

v. Moreno, 458 U.S. 1, 10 (1982).

However, the Supreme Court has also explained that not

every state or local enactment that affects the rights of aliens

89

necessarily interferes with the federal interest in immigration.

In DeCanas v. Bica, 424 U.S. 351 (1976), the Supreme Court

articulated a framework for analyzing pre-emption challenges to

state and local laws that impact the rights of aliens but do not

“regulate immigration.” Although DeCanas was decided a

decade before Congress enacted IRCA and two decades before

it enacted IIRIRA, many aspects of the Court’s analysis are still

relevant to our inquiry.

In DeCanas, the Supreme Court considered whether a

state law prohibiting the employment of persons unlawfully

present was pre-empted by the INA. California had enacted

legislation prohibiting employers within the state from

“knowingly employ[ing] an alien who is not entitled to lawful

residence in the United States if such employment would have

an adverse effect on lawful resident workers.” Id. at 352

(internal quotation marks omitted). A group of migrant

farmworkers sued, arguing that the law was pre-empted both by

the Constitution’s exclusive delegation of the power to regulate

immigration to the federal government, and by the INA. The

Court disagreed.

In upholding the statute, the Court explained that the

90

“[p]ower to regulate immigration is unquestionably exclusively

a federal power” under the United States Constitution,

precluding all state involvement even if Congress has neither

expressed nor implied its intent to preclude that state regulation.

Id. at 354. “[T]he Constitution of its own force requires pre-

emption” of any state efforts to actually regulate immigration.

Id. at 355. However, the Court also explained that not “every

state enactment which in any way deals with aliens is a

regulation of immigration and thus per se pre-empted by this

constitutional power.” Id. Rather, a state law only regulates

immigration if it is “essentially a determination of who should

or should not be admitted into the country, and the conditions

under which a legal entrant may remain.” Id. As California’s

law did not intrude into these proscribed areas, the Court held

that it was not pre-empted, absent congressional action.

The Court also held that California’s law was not field

pre-empted by the INA’s regulatory scheme. First, the Court

explained that “the regulation of employment of illegal aliens”

was not a subject matter of such clear and manifest federal

importance as to require the conclusion that it was occupied by

federal regulation. Id. at 356. The Court reasoned that states

91

have “broad authority under their police powers to regulate the

employment relationship to protect workers within the State,”

and that California’s law fell “within the mainstream of such

police power regulation.” Id. Because the law “focuse[d]

directly upon the[] essentially local problems [of employing

illegal aliens] and [was] tailored to combat effectively the

perceived evils,” it did not touch upon a field that by its very

nature would support no conclusion but that Congress had

occupied it.26 Id. at 357.

Secondly, the Court concluded that the INA as it then

existed did not reflect clear and manifest congressional intent to

preclude state regulation in the field of employment of aliens

here unlawfully. Then, the INA was primarily concerned with

“the terms and conditions of admission to the country and the

subsequent treatment of aliens lawfully in the country.” Id. at

359. Only one provision of one section of the INA even

26

In reaching this conclusion, the Court distinguished cases

in which pre-emption was found based on the “predominance of

federal interest in the fields of immigration and foreign affairs.”

DeCanas, 424 U.S. at 363. It explained that “there would not

appear to be a similar federal interest in a situation in which the

state law is fashioned to remedy local problems, and operates only

on local employers, and only with respect to individuals whom the

Federal Government has already declared cannot work in this

country.” Id.

92

mentioned the employment of persons not lawfully in the

country.27 This evidenced “at best . . . a peripheral concern with

employment of illegal entrants,” which was insufficient to

establish a congressional intent to occupy the field. Id. at 360.

To the contrary, the Court believed that Congress had indicated

its intent, through laws addressing farm labor contractors, for

the States to “consistent with federal law, regulate the

employment of illegal aliens.” Id. at 361.

The Court did not, however, actually rule on the issue of

conflict pre-emption. Rather, it remanded the matter so that the

lower courts could determine if California’s law was “consistent

with federal law.” Id. In all other respects, though, the Court

found the challenged law an appropriate use of state power,

given both its limited impact upon “immigration” and

Congress’s then limited foray into regulating the employment of

persons lacking lawful immigration status.

In sum, DeCanas holds that the federal authority to

“regulate immigration” is exclusive, but states are not

27

That provision was contained in 8 U.S.C. § 1324, the

section which makes it a felony to “harbor” illegal entrants, and it

stated that employing aliens here unlawfully “shall not be deemed

to constitute harboring.” DeCanas, 424 U.S. at 360 (internal

quotation marks omitted) (emphasis added).

93

necessarily precluded from regulating (consistent with federal

law) certain local issues affecting the rights of aliens, unless

Congress has indicated an intent to preclude such regulation.

1. Employment Provisions

a. Presumption Against Pre-emption

The district court concluded that the employment

provisions of the IIRAO were expressly pre-empted, field pre-

empted, and conflict pre-empted. Hazleton challenges each of

the district court’s conclusions on multiple grounds. Hazleton

first claims that the district court erred in failing to apply the

presumption against pre-emption. We agree.

As we have noted, Congress does not casually sweep

away the historic police powers of states. This reality underlies

the rebuttable presumption that federal legislation does not pre-

empt those police powers absent “clear and manifest”

congressional intent to the contrary. Medtronic, 518 U.S. at

485. Only state and local laws aimed at areas beyond the state’s

historic police powers, that venture into matters long regulated

by the federal government, are not afforded the benefit of this

presumption. See Locke, 529 U.S. at 108 (“[A]n assumption of

nonpre-emption is not triggered when the State regulates in an

94

area where there has been a history of significant federal

presence.”) (internal quotation marks omitted).

In analyzing the applicability of the presumption in this

case, the district court reasoned that “[i]mmigration is an area of

the law where there is a history of significant federal presence

and where the States have not traditionally occupied the field.

In fact . . . immigration is a federal concern not a state or local

matter.” Lozano, 496 F. Supp. 2d at 518 n.41. Based on this

reasoning, the district court refused to presume nonpre-emption.

However, the district court’s analysis is inconsistent with the

framework set forth in DeCanas.

As we noted above, in DeCanas the Supreme Court

explained that not “every state enactment which in any way

deals with aliens is a regulation of immigration.” 424 U.S. at

355 (emphasis added). Rather, laws regulate immigration only

if they attempt to regulate “who should or should not be

admitted into the country, and the conditions under which a

legal entrant may remain.” Id. Hazleton’s employment

provisions therefore plainly do not regulate immigration under

DeCanas. Rather, they regulate the employment of persons

unauthorized to work in this country, and like the law at issue in

95

DeCanas, fall within the state’s historic police powers.

Accordingly, they must benefit from the presumption against

pre-emption.

We are aware, of course, that the landscape of federal

immigration law has changed dramatically since the Court

decided DeCanas. In enacting IRCA, Congress clearly made

the regulation of the employment of unauthorized aliens a

central concern of federal immigration policy. However, while

this sea change in the federal regulatory scheme is incredibly

important for purposes of our substantive analysis, it does not

negate the operation of the presumption against pre-emption.

The applicability of the presumption turns on a state’s historic

police powers. By definition, that means that the presumption

depends on the past balance of state and federal regulation, not

on the present.

As we have just explained, until the passage of IRCA, the

federal government played at most a very small role in

regulating the employment of persons without lawful

immigration status. See DeCanas, 424 U.S. at 360. Moreover,

the Supreme Court concluded that Congress then intended for

the states to, “consistent with federal law, regulate the

96

employment of illegal aliens.” Id. at 361. Thus, when Congress

enacted IRCA, it began legislating in an area in which states had

regulated, and in which the federal government, for the most

part, had not. Accordingly, we presume that Congress did not

intend to sweep away the states’ historic police powers by

enacting IRCA, absent clear evidence to the contrary.

b. Express Pre-emption

As noted above, IRCA includes an express pre-emption

clause, which states that: “[t]he provisions of this section

preempt any State or local law imposing civil or criminal

sanctions (other than through licensing and similar laws) upon

those who employ, or recruit or refer for a fee for employment,

unauthorized aliens.” 8 U.S.C. § 1324a(h)(2). Thus, IRCA

expressly pre-empts state and local laws that sanction those who

employ unauthorized aliens, unless the sanction is imposed

through a licensing, or similar, law.

The district court read this clause as expressly pre-

empting Hazleton’s employment provisions in the IIRAO

because they impose a sanction – the suspension of a business

license – on business entities that employ unauthorized aliens.

Hazleton had argued that the IIRAO is a licensing law, and thus

97

saved from the express pre-emptive reach of IRCA, but the

district court disagreed. The court reasoned that since the

IIRAO imposes the “ultimate sanction” of entirely taking away

a business’s ability to operate, it is “at odds with the plain

language of the express pre-emption provision, which is

concerned with state and local municipalities creating civil and

criminal sanctions against employers.” 28 Lozano, 496 F. Supp.

2d at 519.

The district court also concluded, based on a review of

IRCA’s legislative history, that the IIRAO’s scheme for

revoking licenses is inconsistent with the congressional intent

underlying IRCA’s saving clause. According to the court,

Congress had no intention, in exempting licensing laws from

express pre-emption, of permitting states and localities to

independently adjudicate whether a business entity has

employed an unauthorized alien. In reaching this conclusion,

the district court reviewed H.R. Rep. No. 99-682(I), reprinted in

1986 U.S.C.C.A.N. 5649, the sole piece of IRCA’s legislative

history directly discussing the pre-emption provision. Based on

28

In effect, then, the district court believed that a business

license was not the species of “license” Congress had in mind in

exempting licensing laws from express pre-emption.

98

several sentences in that Report, the court concluded that

Congress intended the saving clause to only exempt from

express pre-emption local laws that revoke the licenses of

persons who the federal government has found guilty of

violating IRCA, and not the licenses of persons who localities

independently adjudicate guilty of violating their own

prohibitions against employing unauthorized aliens.29 Because

the IIRAO creates its own procedures for adjudicating whether

an employer is guilty of employing unauthorized aliens, and

revokes licenses based on that determination, rather than based

on a federal determination that an employer has violated IRCA,

29

The House Report states:

[t]he penalties contained in this legislation are

intended to specifically preempt any state or local

laws providing civil fines and/or criminal sanctions

on the hiring, recruitment or referral or

undocumented aliens. They are not intended to

preempt or prevent lawful state or local processes

concerning the suspension, revocation or refusal to

reissue a license to any person who has been found

to have violated the sanctions provisions in this

legislation. Further, the Committee does not intend

to preempt licensing or “fitness to do business

laws,” such as state farm labor contractor laws or

forestry laws, which specifically require such

licensee or contractor to refrain from hiring,

recruiting or referring undocumented aliens.

H.R. Rep. No. 99-682(I), at 12 (emphasis added).

99

the court concluded that the IIRAO’s employment provisions do

not fall within the scope of IRCA’s saving clause. See Lozano,

496 F. Supp. 2d at 520. On appeal, Hazleton renews its

argument that the IIRAO’s employment provisions are a

“licensing” law within the meaning of IRCA’s saving clause,

and we agree.

As noted earlier, the text of IRCA’s express pre-emption

clause explicitly excludes from its pre-emptive scope “licensing

and similar laws.” Congress did not define these terms. Terms

that are not statutorily defined are usually ascribed their

“ordinary or natural meaning.” Fed. Deposit Ins. Corp. v.

Meyer, 510 U.S. 471, 476 (1994).

Merriam-Webster’s Dictionary defines a license as “a

permission granted by competent authority to engage in a

business or occupation or in an activity otherwise unlawful.” 30

Similarly, Black’s Law Dictionary defines a license as “a

permission, usually revocable, to commit some act that would

otherwise be unlawful.” Black’s Law Dictionary (8th ed. 2004).

Here, the IIRAO conditions the grant of a business license on a

30

License Definition, Merriam-Webster.com,

http://www.merriam-webster.com/dictionary/license (last visited

Aug. 17, 2010).

100

business’s agreement not to employ unauthorized aliens, and on

the business’s continued adherence to that agreement. A

business license certainly falls within the plain meaning of a

“license” and therefore, it seems clear that the IIRAO’s

provisions for suspending such licenses constitute a “licensing

law.”

Plaintiffs nonetheless argue, consistent with the district

court’s decision, that IRCA’s express pre-emption provision

would be toothless if a state or municipality could effectively

circumvent the general prohibition on imposing sanctions by

imposing sanctions of this severity. According to Plaintiffs, the

loss of a business license is the “death penalty” for a business,

and the express pre-emption clause would be swallowed by its

exception if a law regulating business licenses is held to be a

licensing law.

In support of their argument, Plaintiffs cite several recent

Supreme Court cases which stand for the proposition that courts

should read saving clauses narrowly, and in light of the statutory

scheme as a whole. See Aetna Health Inc. v. Davila, 542 U.S.

200, 217 (2004); Geier, 529 U.S. at 870-71; Locke, 529 U.S. at

106. Looking at IRCA and its purposes more broadly, Plaintiffs

101

argue that it is clear that Congress could not have intended the

saving clause to permit states and localities to revoke the

business licenses of employers who employ unauthorized aliens.

The problem with Plaintiffs’ argument, however, is that

even if we look more broadly at IRCA as a whole, there is

simply no basis for wedging the limitation Plaintiffs urge into

the text. Congress unequivocally states in the saving clause that

licensing laws are not expressly pre-empted by IRCA. Nowhere

in IRCA’s text or legislative history is there an indication that

Congress intended that clause to apply only to licensing laws

that impose minor penalties, and not to licensing laws that

impose more significant sanctions. Similarly, there is no

indication that Congress intended to exclude laws regulating the

provision, suspension, and revocation of business licenses from

the term “licensing law,” and Plaintiffs do not offer an

alternative definition of “license” that would sensibly exclude

business licenses. See Chicanos Por La Causa, 558 F.3d at 865

(finding “no support for [plaintiffs’] interpretation” of the term

“license” as excluding business licenses).

When statutory language is plain and unambiguous, “the

sole function of the courts . . . is to enforce it according to its

102

terms.” Lamie v. United States Tr., 540 U.S. 526, 534 (2004)

(internal quotation marks omitted). We therefore conclude that

the IIRAO is a licensing law under IRCA’s saving clause and

saved from express pre-emption.31

31

Plaintiffs also argue that the IIRAO is not a bona fide

licensing law. They note that the IIRAO’s title and its “Findings

and Declaration of Purpose” section make no reference to

licensing, and that the IIRAO does not refer to any existing

licensing provisions. Thus, rather than being a true licensing law

directed towards any legitimate local concerns, Plaintiffs claim that

the IIRAO should be viewed as part of a scheme intended to

regulate immigration by keeping all persons lacking lawful

immigration status out of the City, and by supplanting the federal

government’s role in these matters. The argument has significant

force, and is very troubling.

This record is not without support for the proposition that,

in enacting both the IIRAO and the RO, the Hazleton City Council

was trying to use every tool at its disposal not merely to address

local concerns with a “purely speculative and indirect impact on

immigration,” DeCanas, 424 U.S. at 355, but to alter to the best of

its ability the landscape of federal immigration regulation as well.

See, e.g., J.A. 1289 (testimony of the President of Hazleton’s City

Council that he intended Hazleton’s ordinances to force the federal

government into action); J.A. 1713 (testimony of Hazleton’s mayor

that the IIRAO is intended “to deter and punish illegal

immigrants”). Furthermore, it appears that these ordinances were

enacted as part of an organized campaign of certain states and

localities attempting to collectively remedy what they view as the

federal government’s failure to “secure our borders.” See, e.g.,

J.A. 1438 (testimony of Hazleton’s mayor that he has encouraged

communities across the country to enact similar ordinances).

Although the Supreme Court has never directly addressed

how the intent behind a local enactment should factor into a pre-

emption analysis under these circumstances, we do not think the

Hazleton City Council’s intent is irrelevant. See Plyler, 457 U.S.

at 207 (noting the district court’s determination that the law at

issue had neither “the purpose [n]or effect of keeping illegal aliens

out of the State of Texas”) (internal quotation marks omitted);

DeCanas, 424 U.S. at 354 n.3 (noting disagreement among the

(continued...)

103

Plaintiffs also argue (consistent with the district court’s

decision) that the IIRAO does not fall within IRCA’s saving

clause because it creates and relies upon its own adjudicative

system for determining whether an employer has employed an

unauthorized alien, rather than relying, as Congress intended, on

the adjudicative system created by IRCA. Because this

argument is better addressed in the context of the purposes and

objectives underlying IRCA, we attend to it in our discussion of

obstacle conflict pre-emption.32

31

(...continued)

California state courts as to whether California’s law was “aimed at

immigration control”) (internal quotation marks omitted).

However, we also realize that the Supreme Court has explained

that states are not “without any power to deter the influx of persons

entering the United States against federal law, and whose numbers

might have a discernable impact on traditional state concerns.”

Plyler, 457 U.S. at 229 n.23.

The Supreme Court will undoubtedly speak to this tension

soon, given the number of states and localities attempting to chip

away piece-meal at the federal power to regulate immigration.

Fortunately, we need not wade into these murky waters in order to

resolve the claims before us. As we will explain, the employment

provisions are plainly pre-empted, regardless of the intent behind

them, because they pose an obstacle to the careful balancing of

interests underlying IRCA.

32

The district court also concluded that the IIRAO’s

employment provisions are pre-empted because IRCA occupies the

field of “the employment of unauthorized aliens.” Lozano, 496 F.

Supp. 2d at 524. This is a broad field indeed, and a difficult

conclusion to sustain given IRCA’s saving clause. See Int’l Paper

Co. v. Ouellette, 479 U.S. 481, 492 (1987) (The existence of a

saving clause “negates the inference that Congress ‘left no room’

(continued...)

104

c. Conflict Pre-emption

That the IIRAO’s employment provisions are saved from

express pre-emption does not end our inquiry. As the Supreme

Court has emphasized, a law that is saved from express pre-

emption is still invalid if it is conflict pre-empted. See Geier,

529 U.S. at 870-72. The fact that Congress intends to save a

general class of laws, such as licensing and similar laws, from

express pre-preemption does not mean that Congress intends to

permit any law within that category even if it impedes federal

interests. A federal law that forecloses conflict pre-emption

analysis is one that “defeat[s] its own objectives.” Id. at 872.

Congress may intend “such a complex type of state/federal

relationship,” but we will not assume it absent proof. Id.

Therefore, even though the IIRAO is a licensing law, it cannot

be allowed to operate if compliance with both its employment

provisions and IRCA is impossible, or if those provisions stand

as an obstacle to the objectives underlying IRCA. In either case,

32

(...continued)

for state causes of action.”). Plaintiffs, however, press the

argument of field pre-emption only in a footnote, and we therefore

consider it waived. See John Wyeth & Bro., Ltd. v. CIGNA Int’l

Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997) (noting, ironically

enough in a footnote, that “arguments raised in passing (such as, in

a footnote), but not squarely argued, are considered waived”).

105

the Supremacy Clause requires that the IIRAO give way.

The district court concluded that the IIRAO’s

employment provisions are pre-empted by IRCA because of the

numerous ways in which they “differ from and conflict with

IRCA.” Lozano, 496 F. Supp. 2d at 529. Hazleton argues that

the district court erred by conflating “mere difference” with

conflicts sufficient to result in pre-emption. Hazleton’s Br. 46.

The City correctly argues that conflict pre-emption occurs

only if a “difference” either makes it impossible to comply with

both federal and local law or “stands as an obstacle to the

accomplishment and execution of the full purposes and

objectives of Congress.” Hines, 312 U.S. at 67; see also Fla.

Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 141

(1963). We too have concerns about the district court’s

approach, both because it did at times equate difference with

conflict, and because it failed to anchor its articulation of the

congressional purposes underlying IRCA to that statute’s

language and legislative history.

Nonetheless, upon a thorough consideration of those

purposes, we agree that the IIRAO’s employment provisions

stand as an obstacle to the accomplishment and execution of

106

federal law, and thus are pre-empted.

As we will explain, it is indisputable that Congress went

to considerable lengths in enacting IRCA to achieve a careful

balance among its competing policy objectives of effectively

deterring employment of unauthorized aliens, minimizing the

resulting burden on employers, and protecting authorized aliens

and citizens perceived as “foreign” from discrimination. See

Edmondson, 594 F.3d at 767 (IRCA balances the goals of

“preventing the hiring of unauthorized aliens, lessening the

disruption of American business, and minimizing the possibility

of employment discrimination.”). The IIRAO substantially

undermines this careful balance. It furthers the first of these

federal objectives at the expense of the others. This “significant

conflict” is sufficient to rebut the presumption against pre-

emption, see Geier, 529 U.S. at 885, and invalidate these

provisions under the Supremacy Clause.

IRCA was “one of the longest and most difficult

legislative undertakings of recent memory.” Presidential

Statement on Signing the Immigration Reform and Control Act,

22 Weekly Comp. Pres. Doc. 1534 (Nov. 10, 1986). Over the

course of numerous sessions, Congress debated taking the

107

theretofore unprecedented step of directly prohibiting the

employment of “unauthorized aliens.” 33 Congress ultimately

committed to enacting employer sanctions, but in so doing,

committed equally to enacting measures that would protect

groups likely to be unfairly burdened by those sanctions –

employers and authorized workers. IRCA is thus “a carefully

crafted political compromise which at every level balances

specifically chosen measures discouraging illegal employment

with measures to protect those who might be adversely

affected.” Nat’l Ctr. for Immigrants’ Rights, Inc. v. INS, 913

F.2d 1350, 1366 (9th Cir. 1990), rev’d on other grounds, 502

U.S. 183 (1991).

Congress paid considerable attention to the costs IRCA

would impose on employers, see, e.g., H.R. Rep. No. 99-682(I),

at 43 (“Considerable discussion was generated during the

processing of [this bill] to the effect the employer sanctions

33

At the time of IRCA’s passage, there was still significant

opposition to requiring employers to play a role in enforcing the

nation’s immigration policy. See, e.g., 132 Cong. Rec. H10583-01

(daily ed. Oct. 15, 1986) (statement of Rep. Martinez) (“For the

first time in history, this bill institutes Federal penalties for private

citizens who hire illegal aliens. . . . [We should] put the burden of

enforcing the law on the Government, where it belongs, not on

private employers. Not only is this unfair to private employers, but

it will cause them, out of fear, to discriminate against prospective

employees who are ‘foreign-looking.’”).

108

provisions were placing an undue burden on employers in

requiring them to do the paperwork and keep records on

employees.”), and drafted the legislation in a manner that would

minimize those burdens, see, e.g., 132 Cong. Rec. H10583-01

(daily ed. Oct. 15, 1986) (statement of Rep. Bryant) (IRCA has

been “carefully designed for the minimum burden necessary . .

. to be effective.”).

Congress heeded these concerns in crafting IRCA’s

prosecution and adjudication scheme. For example, it limited

investigation of complaints to those with a “substantial

probability of validity” in order to minimize the possibility of

“harassment” of “innocent employers.” 8 U.S.C. §

1324a(e)(1)(B); S. Rep. No. 99-132, at 35 (1985). Similarly,

Congress “intended to minimize the burden and the risk placed

on the employer in the verification process.” Collins Foods

Int’l, Inc. v. INS, 948 F.2d 549, 554 (9th Cir. 1991).

Accordingly, the I-9 process only requires employers to

ascertain whether employees’ documents appear “on [their] face

to be genuine.” 8 U.S.C. § 1324a(b)(1)(A)(ii); H.R. Rep. No.

99-682(I), at 16. Congress could have required employers to

ascertain the actual legitimacy of such documents; it did not.

109

Just as importantly, Congress strove to ensure that the

prohibition against hiring unauthorized aliens would not result

in discrimination against authorized workers (whether alien or

citizen) who appear “foreign,” as Congress feared that

overcautious employers might incorrectly assume such persons

were unauthorized to work in the United States. IRCA’s

legislative history could not be more plain or emphatic about the

congressional commitment to preventing this sort of

discrimination. The House Report explains:

Numerous witnesses over the past three

Congresses have expressed their deep concern

that the imposition of employer sanctions will

cause extensive employment discrimination

against Hispanic-Americans and other minority

group members. . . . [T]he Committee does

believe that every effort must be taken to

minimize the potentiality of discrimination and

that a mechanism to remedy any discrimination

that does occur must be a part of this legislation.

. . . [A]nti-discrimination protections are

essential to this bill.

H.R. Rep. No. 99-682(I), at 22 (internal quotation marks

omitted) (emphasis added). IRCA is thus “delicately balanced

to serve the goal of preventing unauthorized alien employment

while avoiding discrimination against citizens and authorized

aliens.” Collins Foods Int’l, 948 F.2d at 554. As we explained

110

earlier, Congress created the office of a Special Counsel to

handle discrimination charges, see 8 U.S.C. § 1324b(c), and

specifically required that the President fill that position, see 8

U.S.C. § 1324b(c)(1). As also detailed above, Congress

authorized administrative law judges to impose on employers

found guilty of discrimination civil penalties equivalent to the

penalties imposed on employers found guilty of employing

unauthorized aliens. See 8 U.S.C. § 1324b(g)(2)(B)(iv)(I)-(III).

The Supreme Court has consistently found state and local

laws which alter the careful balancing of objectives

accomplished by a federal law to be pre-empted, and so have

we. See, e.g., Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,

489 U.S. 141, 144 (1989) (finding Florida law pre-empted

because it struck the balance between “the encouragement of

invention and free competition in unpatented ideas” differently

from federal patent law); Rogers v. Larson, 563 F.2d 617, 626

(3d Cir. 1977) (finding Virgin Islands law pre-empted because

it struck the balance between “assur[ing] an adequate labor force

on the one hand and . . . protect[ing] the jobs of citizens on the

other” differently from federal immigration law). Hazleton’s

IIRAO undermines IRCA’s careful balancing of objectives in at

111

least four ways.

First, the IIRAO significantly increases employer burden

by creating a separate and independent adjudicative system for

determining whether an employer is guilty of employing

unauthorized aliens. Hazleton’s system fails to reflect the same

concern with reducing employer burden as IRCA. In contrast to

the federal requirement that a complaint have a “substantial

probability of validity,” the IIRAO permits investigation of any

complaint lodged against an employer regardless of its likely

merit. Under Section 4 of the IIRAO, a complaint is valid so

long as it includes an “allegation which describes the alleged

violator(s) as well as the actions constituting the violation, and

the date and location where such actions occurred.” IIRAO §

4B. Upon receipt of any such complaint (so long as it does

allege a violation on the basis of national origin, ethnicity, or

race), Hazleton’s Code Enforcement Office must, “within three

business days, request identity information from the business

entity regarding any persons alleged to be unlawful workers.”

IIRAO § 4B(2)-(3).

Similarly, the IIRAO provides employers with

substantially fewer procedural protections than IRCA. Under

112

IRCA, an employer must be provided with notice and an

opportunity for a hearing, and an administrative law judge must

find the employer guilty of violating IRCA by a preponderance

of the evidence before any sanctions can be imposed. See 8

U.S.C. § 1324a(e). That employer also has a right to an

administrative appeal and judicial review. See id. In marked

contrast, the IIRAO requires Hazleton’s Code Enforcement

Office to immediately suspend the business license of a business

entity which fails to provide requested information about alleged

unlawful workers within three business days. See IIRAO §

4B(3). Additionally, if a business entity fails to terminate

anyone that Hazleton has decided is an unlawful worker within

three business days, the Code Enforcement Office immediately

suspends its license. See IIRAO § 4B(4). A business entity that

has been “subject to a complaint and subsequent enforcement”

can then seek relief in court, but both the procedure and

remedies available to that employer are entirely unclear on the

face of the ordinance. See IIRAO § 7F.

The crux of this conflict, however, transcends the

differences between the IIRAO’s prosecution and adjudication

system and IRCA’s. Rather, it is rooted in the fact that Hazleton

113

has established an alternate system at all. As we have

explained, Congress created a comprehensive and carefully

balanced prosecution and adjudication system, and foremost

among its goals in doing so was to minimize the burden this

system would impose on employers. See Edmondson, 594 F.3d

at 751 (IRCA “exhaustively details a specialized administrative

scheme for determining whether an employer has knowingly

employed an unauthorized alien.”). We therefore cannot fathom

that Congress intended to tolerate the “supplementing” of its

carefully crafted system with independent state and local

systems, which by their mere existence drastically increase

burdens on employers.

Under the IIRAO, a business in Hazleton must worry

about two separate systems of complaints, investigations,

prosecutions, and adjudications. Furthermore, Hazleton’s

ordinance is not the only consideration here, given the emerging

landscape of local and state regulation in the area. See, e.g.,

Buckman Co. v. Pls.’ Legal Comm., 531 U.S. 341, 350 (2001)

(explaining that if one state’s tort system is permitted then

federal law will have to operate “in the shadow of 50 States’ tort

regimes [thereby] dramatically increas[ing] the burdens facing

114

potential applicants – burdens not contemplated by Congress”).

If Hazleton’s ordinance is permissible, then each and every state

and locality would be free to implement similar schemes for

investigating, prosecuting, and adjudicating whether an

employer has employed unauthorized aliens. See Rowe v. N.H.

Motor Transp. Ass’n, 552 U.S. 364, 373 (2008) (reasoning that

allowing one state to implement its own monitoring system

“would allow other States to do the same . . . easily lead[ing] to

a patchwork of state . . . laws, rules, and regulations”). As noted

above, many states and localities have already tried. A

patchwork of state and local systems each independently

monitoring, investigating, and ultimately deciding – all

concurrently with the federal government – whether employers

have hired unauthorized aliens could not possibly be in greater

conflict with Congress’s intent for its carefully crafted

prosecution and adjudication system to minimize the burden

imposed on employers.34

34

Although we have been framing this question as one of

conflict pre-emption, Hazelton’s actions may be subject to field

pre-emption as well. “Field preemption arises by implication when

state law occupies a ‘field reserved for federal regulation.’

Bruesewitz, 561 F.3d at 238 (citing United States v. Locke, 529

U.S. 89, 111 (2000)). The categories of pre-emption are not

(continued...)

115

Second, the IIRAO contravenes congressional objectives

by altering the employment verification scheme created by

IRCA, and supplemented by IIRIRA and subsequent legislation.

While IRCA affords an affirmative defense to any employer

who uses the I-9 process to verify the work authorization of its

employees, the IIRAO does not. The IIRAO provides its safe

harbor only to employers who use E-Verify. In this way, the

IIRAO significantly alters the risk calculus for employers, and

coerces use of E-Verify.35 The IIRAO also directly compels

34

(...continued)

“rigidly distinct. Indeed, field pre-emption may be understood as a

species of conflict pre-emption: A state law that falls within a pre-

empted field conflicts with Congress’ intent (either express or

plainly implied) to exclude state regulation.” English, 496 U.S. at

79 n.5. If Congress, in service of the goal of minimizing employer

burden, intended for its adjudicative system to be exclusive, IRCA

would occupy the field of prosecuting and adjudicating employers

for the hiring of unauthorized aliens.

35

Throughout its brief, Hazleton makes much of the fact

that the IIRAO does not actually “coerce” employers to use E-

Verify (or as we discuss later, to verify the work authorization of

independent contractors) because even though safe harbor is

provided only to those employers who use E-Verify, employers are

given the opportunity to terminate an unauthorized alien before

sanctions are imposed, thus making a safe harbor less essential.

The argument is the proverbial “red herring.”

It is clear that Hazleton significantly incentivizes use of E-

Verify. However one characterizes this coercion, it is inco

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