Supreme Court Update: Arizona v. United States (11-182) and Southern Union Co. v. United States (11-94)

June 27, 2012 Supreme Court Update

Greetings, Court fans!

We're back . . . quicker than you thought, huh? This Update will cover: Arizona v. United States (11-182), where the Court gutted Arizona's controversial immigration law; and Southern Union Co. v. United States (11-94), which extended to criminal fines the Apprendi rule that facts relevant to punishment must be found by a jury.

We'll tackle Arizona v. United States (11-182) first, since it has been grabbing the headlines this week. Struggling with an enormous influx of illegal immigrants and lax federal enforcement, Arizona decided to take things into its own hands. It passed a sweeping immigration bill designed in large part to enforce existing federal immigration laws. The United States made a pre-enforcement challenge to certain aspects of the law, arguing that they were preempted by federal law. The district court entered a preliminary injunction barring four provisions of the law from taking effect and the Ninth Circuit affirmed, finding that the United States had established a likelihood of success on its preemption arguments. The four provisions were as follows. Section 3 makes failure to comply with federal alien registration requirements a state misdemeanor. Section 5(C) makes it a misdemeanor for an unauthorized alien to seek or engage in work in the State. Section 6 authorizes officers to arrest without a warrant a person "the officer has probably cause to believe . . . has committed any public offense that makes the person removable from the United States." Finally, Section 2(B) provides that officers who conduct a stop, detention, or arrest generally must try to verify the person's immigration status.

The case divided the Court, resulting in a 5-2-1 split (with Justice Kagan sitting out). Interestingly, however, the 5 Justice majority was led by Justice Kennedy, and included the Chief, Ginsburg, Breyer and Sotomayor. In their view, three of the challenged four provisions were preempted by federal law, but the fourth (requiring efforts to determine immigration status as part of an independent stop or arrest) could stand. The Court began with a discussion of the federal government's broad power over the subject of immigration, arising from its authority under the Constitution to "establish a uniform Rule of Nationalization" and its inherent power over foreign relations. Immigration policy is critical to our relationships with other nations and it is crucial that the federal government be able to ensure that immigration policy is consistent with our nation's overarching foreign policy. It must be able to speak with one voice on this subject and flexibly respond to the foreign relations realities of the day. (For example, choosing not to remove certain individuals because they would be removed to an area experiencing armed conflict.) The Executive also needs to be free to set enforcement priorities reserving scarce resources for the areas it deems most critical. Recently, for example, President Obama decided not to deport certain younger unauthorized aliens. Next, the Court identified the three different situations under which federal law, as a general matter, may preempt state law: (1) express preemption (where federal law says it is preempting state regulation in a particular area); (2) conflict preemption (where it is either impossible to comply with both federal and state law or where state law "stands as an obstacle to the accomplishment and execution of the full purpose and objectives of Congress"); and (3) field preemption (where Congress has so occupied a particular area that it has effectively indicated its intent to regulate the area exclusively). Finally, the Court analyzed each of the four provisions of the Arizona law individually.

The Court turned first to § 3, which makes willful failure to complete or carry an alien registration document in violation of federal law a state misdemeanor. Detailing the federal government's extensive regulation of alien registration requirements, which the Court previously found in Hines v. Davidowitz to be a "single integrated and all-embracing system" that did not allow for "additional or auxiliary regulations" by the states, the Court found that there was federal field preemption over the arena of alien registration. While the Court recognized that a state may sometimes make violation of a federal law a separate state offense, "it cannot do so in a field . . . that has been occupied by federal law." Further, allowing states to bring criminal charges for a registration violation where the federal government has elected not to do so could frustrate federal immigration and foreign relations policies. Moreover, state law penalties also differ (i.e., Arizona law does not permit probation and eliminates the possibility of a pardon), creating a conflict with the balance struck by Congress.

The Court next looked at § 5(C), making it a state misdemeanor for an unauthorized alien to apply for, solicit, or perform work as an employee or independent contractor. In 1976, the Court held in De Canas v. Bica that there was no comprehensive federal program regulating the employment of unauthorized aliens, and that states therefore could pass laws on this subject. However, in 1986, Congress enacted the Immigration Reform and Control Act (IRCA), which does comprehensively regulate the employment of unauthorized aliens, making it illegal for employers to hire illegal aliens and requiring employers to verify immigration status. In passing IRCA, Congress considered and rejected the notion of imposing criminal penalties on illegal aliens themselves, electing instead to impose only certain civil penalties on them. Allowing Arizona to upset this deliberate choice would "interfere with the careful balance struck by Congress with respect to unauthorized employment of aliens." Though the goals of § 5(C) and federal law may be the similar, the means are different, and a "conflict in technique can be fully as disruptive to the system Congress enacted as a conflict with overt policy." (For those keeping track, it would appear that the Court relied principally on "conflict" preemption here, rather than the "field" preemption it relied on with respect to § 3.)

Section 6 of the Arizona law allows an officer to arrest a person, without a warrant, if the officer believes that the person "has committed any public offense that makes [him] removable from the United States." The Court began by recounting the federal structure, which does not (as a general matter) make it a crime for a removable alien to remain present in the country, does not generally allow for arrest without a warrant, and requires the involvement of specially trained immigration officers. Federal law expressly permits state officials to perform the functions of an immigration officer, but only under very limited circumstances, such as where a formal agreement grants this authority to certain officers, who are supervised by the federal government and given appropriate training. Congress put in place a system that would not permit state officials to make warrantless arrests of aliens based only on possible removability. Accordingly, § 6 conflicts with Congress's objectives and therefore is preempted.

Finally, the Court turned to § 2(B), which requires state officers to make a "reasonable attempt . . . to determine the immigration status" of a person they stop, detain or arrest on another basis if "reasonable suspicion exists that the person is an alien and is unlawfully present in the United States." The law also provides that any person who is arrested will have his immigration status checked prior to release. Existing federal law encourages consultation between federal and state officials, permitting such communication without any formal agreements or special training and requiring the federal government to respond to any request made by state officials for verification of a person's citizenship or immigration status. Accordingly, the Court found no field or conflict preemption. Arizona's efforts were consistent with the federal scheme already in place and posed no obstacle to federal objectives. At this stage, the Court was also unpersuaded by arguments that state officers would delay release of individuals for no reason other than checking immigration status, raising potential Fourth Amendment concerns. Arizona's law had not yet been construed by state courts, and could easily be construed to avoid such problems, for example, by finding that, under the law, it would be "unreasonable" to prolong a stop only for this purpose. In any event, at this stage, there were no facts to show that Arizona's law would actually result in unreasonable detentions. But the Court made clear that "[t]his opinion does not foreclose other preemption and constitutional challenges to the law as interpreted and applied after it goes into effect."

Justices Scalia, Thomas and Alito each penned their own concurrence in part and dissent in part. Scalia and Thomas would find none of the four Arizona provisions preempted. Alito would find two of the four preempted. Up first, Scalia wrote an impassioned dissent, arguing that the majority fundamentally misunderstood the states' role with respect to immigration issues. As a sovereign entity, states, no less than the federal government, had the power to protect their borders. While the Privileges and Immunities Clause required states to give equal rights to citizens of other states, it did not eliminate the sovereign authority to repel illegal immigrants. The majority's decision failed to give adequate consideration to Arizona's sovereign interests. Indeed, in Scalia's view, a federal statute should not be deemed to preempt state action in an area involving the States' inherent sovereignty unless it unequivocally expressed its intent to do so. "Implicit ‘field preemption' will not do." Here, there was no express preemption and nothing about Arizona's laws conflicted with federal laws as Congress enacted them. Indeed, for the most part, Arizona merely beefed-up enforcement of existing federal laws. The only thing inconsistent was that Arizona actually wanted to enforce them, whereas the President appeared not to want to do so. Scalia closed with this: "Arizona has moved to protect its sovereignty – not in contradiction of federal law, but in complete compliance with it. . . . If securing its territory in this fashion is not within the power of Arizona, we should cease referring to it as a sovereign State."

Justice Thomas basically agreed with Scalia, but wrote separately to explain that he would get there very simply. There was simply no conflict between the ordinary meaning of the Arizona law and the federal laws at issue here. In Thomas's view, the "purposes and objectives" preemption test applied by the Court to find preemption here is inconsistent with the Constitution because it permits "freewheeling speculation about congressional purpose that roams well beyond the statutory text."

Finally, Justice Alito agreed with the Court that § 2(B) was not preempted. He also agreed with the Court that § 3, regarding alien registration, was field preempted under Hines v. Davidowitz. However, Alito parted ways with the Court as to § 5(c) and § 6. With respect to Arizona's criminalization of illegal aliens' efforts to seek or maintain employment, Alito believed the issue to be governed by De Canas v. Bica, which found employment regulation, even of illegal aliens, to be an area of traditional state concern and therefore not preempted by federal law. Moreover, IRCA expressly preempted state or local laws imposing civil or criminal penalties on employers, but noticeably failed to preempt state or local laws aimed at employees. Finally, turning to § 6, Alito explained that while federal law placed limits on arrests based on possible removability, those limits only applied to federal officers or to those acting pursuant to federal law. There was nothing to show that Congress intended to restrict state and local efforts in this area. Moreover, allowing Arizona to arrest potentially removable individuals could not adversely impact the federal government's enforcement priorities because it was the federal government that would ultimately decide whether or not to pursue removal.

In Southern Union Co. v. United States (11-94), the Court carried its recent Apprendi case law straight into the lap of white collar practitioners. Apprendi v. New Jersey is the landmark 2000 decision holding that the Sixth Amendment requires juries to find facts that might increase the maximum possible punishment for a crime. Judges may exercise discretion in setting sentences, but they are categorically barred under Apprendi from determining facts that could affect the maximum sentence. The Court had applied Apprendi in several cases dealing with imprisonment or death. The question here was whether Apprendi also applied to criminal fines – in this case, criminal fines assessed against a corporation.

A jury convicted the Southern Union Company of an environmental crime: knowingly storing liquid mercury without a permit "on or about September 19, 2002 to October 19, 2004." The crime carries a maximum fine of $50,000 per day of violation (note to self: buy digital thermometers), and the probation office calculated a maximum fine of over $38 million. Southern Union argued that the verdict, together with the jury instructions, meant that the jury could have convicted it on the basis of a single day's violation, making $50,000 the maximum fine. The district court concluded that the jury had found 762 days of violations, though it also found that the "clear and essentially irrefutable evidence" at trial supported 762 days of violations. It accepted the probation office's calculation of the statutory maximum, then exercised its discretion to impose a lesser penalty: a $6 million fine coupled with $12 million in community service obligations. The First Circuit rejected the district court's finding that the jury had necessarily found 762 days of violations, but nevertheless affirmed, concluding that the judge could determine the number of days on which the violation took place because Apprendi did not apply to fines.

In a 6-3 decision by Justice Sotomayor, the Court reversed. It saw no principled distinction under Apprendi between fines and prison or death, as all "are penalties inflicted by the sovereign for the commission of offenses." Fines, the Court observed, "are frequently imposed today, especially upon organizational defendants who cannot be imprisoned." In other words, corporations and unions shouldn't be put at a constitutional disadvantage just because they can't go to jail. The bulk of the Court's analysis turned on the English and early American historical common law practice. If you enjoy discussions of 1812 cases distinguishing between "pot-ashes" and "pearl-ashes," or like seeing descriptions of criminal procedure treatises that became obsolete a couple of centuries ago, we highly recommend the heart of the decision.

Justice Breyer penned a lengthy dissent, joined by Justices Kennedy and Alito. A persistent objector to the Apprendi cases, Justice Breyer echoed his own oft-repeated theme: common law history differentiated between "facts that constitute elements of the offense" (which a jury must find) and "facts relevant only to sentencing" (which a judge can find). The majority's conflation of the two amounted to an "ahistorical" account, he believed. Moreover, the majority's application of Apprendi to criminal fines – and here we arrive, perhaps, at the heart of Breyer's concerns – will undermine efforts to ensure uniformity in sentencing, unduly complicate criminal sentencing, and lead to even more guilty pleas. The majority rejected those arguments. "[E]ven if these predictions are accurate," Justice Sotomayor wrote, the Sixth Amendment requirement – practical or not – is "the end of the matter."

Well, not quite. Southern Union generates two new questions. The Court holds that no Apprendi issue arises when "a fine is so insubstantial that the underlying offense is considered ‘petty'," and prior precedents make plain that any fine of $10,000 or less counts as petty. But how far north of $10,000 can a fine go and still be called petty? Only the Shadow knows. There's also the broader question of what exactly counts as a "criminal fine"? The Court's definition ("penalties inflicted by the sovereign for the commission of offenses") is somewhat tautological, and likely invites battles over whether criminal restitution or disgorgement statutes count as criminal fines for the purposes of Apprendi.

We're going to keep them coming, so watch your inbox for additional Updates!

Kim & Jenny


From the Appellate and Complex Legal Issues Practice Group at Wiggin and Dana. For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400