Supreme Court Upholds 'Business Death Penalty' in Arizona Immigration Case

The Supreme Court on Thursday upheld the Legal Arizona Workers Act of 2007, allowing Arizona to sanction employers that hire illegal immigrants. This so-called "business death penalty" means businesses that knowingly hire illegal workers can lose their business license for a minimum of 10 days. Companies that violate the act's provisions twice can lose their business license permanently.

The court also upheld the act's requirement that businesses check the federal E-Verify database system to make sure new workers are legally authorized before hiring them. This step is voluntary under federal law.

The case -- brought by a coalition that included the U.S. Chamber of Commerce, immigrant rights and civil liberties groups, labor unions and the Obama administration -- argued that the act conflicted with federal immigration policy.

"The most rational path for employers is to obey the law -- both the law barring the employment of unauthorized aliens and the law prohibiting discrimination -- and there is no reason to suppose that Arizona employers will choose not to do so," Chief Justice John Roberts wrote in the decision.

"Either directly or through the uncertainty that it creates, the Arizona statute will impose additional burdens upon lawful employers," Justice Stephen Breyer wrote in dissent, adding that while the law penalizes companies for hiring illegal immigrants, it leaves "the other side of the punishment balance -- the antidiscrimination side -- unchanged."

"The growing patchwork of state and local immigration laws is a serious obstacle to doing business across state lines," Robin Conrad, executive vice president of the National Chamber Litigation Center, the public policy law firm of the U.S. Chamber of Commerce, said in a statement.

The 5-3 decision was viewed as an indication of how the Supreme Court would rule on similar cases in other states as well as on the controversial Arizona law requiring police to check the immigration status of individuals they suspect to be illegal immigrants.