The justices of the nation's high court took shots Wednesday at contentions by the Obama administration and the business community that Arizona cannot punish companies for violating a state immigration law.
Justice Antonin Scalia acknowledged that a 1986 law gave the federal government control of immigration matters. And it bars states from imposing their own civil and criminal penalties.
But Scalia pointed out that law specifically permits states to deal with hiring of undocumented workers through their own "licensing and similar laws."
Here, Scalia said, the sole penalty that can be imposed by the 2007 Legal Arizona Workers Act is for a judge to suspend or revoke any and all state licenses of firms found guilty of knowingly or intentionally hiring undocumented workers. Scalia said that would appear to fit within what Congress intended.
But Carter Phillips, representing the U.S. Chamber of Commerce, argued the Arizona law does more than go after what are traditionally seen as state-issued business licenses. It allows a state judge to revoke a company's articles of incorporation.
"You essentially have a death penalty to the business, that is (to) completely eliminate the business's right to exist," he said.
And Phillips contended even if these do fit the definition of a "license," the federal Immigration Reform and Control Act lets states impose penalties only after a company is found guilty by a federal hearing officer, in a federal tribunal, of breaking federal law. Phillips said the Arizona law let Arizona judges make that decision.
Scalia, however, said the hole in that argument is that companies will be "convicted by a federal government that hasn't gone after many convictions." And as Phillips tried to respond, the justice added, "That's the whole problem."
Acting U.S. Solicitor General Neal Katyal, arguing for the Obama administration which also is challenging the law, told the justices Congress wanted a single, comprehensive scheme for dealing with employers that hired undocumented workers.
"What Arizona does here is what 40,000 different localities can do if this law is upheld," he argued, with each state - and each city and county - free to enact its own rules.
Chief Justice John Roberts responded that may be exactly what Congress intended by including the "licensing" exemption in the 1986 law.
Not all the questions were aimed at challengers.
Justice Stephen Breyer said federal immigration law is balanced both to punish companies that knowingly hire illegal immigrants as well as firms that discriminate against people who simply look like they are in this country illegally. By contrast, he said, the Arizona law has no such balance.
"If you hire an illegal immigrant, your business is dead," he told state Solicitor General Mary O'Grady.
"How can you reconcile that intent (in federal law) to prevent discrimination?" Roberts continued.
"If you are a businessman, every incentive under that (Arizona) law is to call close questions against hiring this person. Under the federal law, every incentive is to look at it carefully."
O'Grady said there are protections for employers under the Arizona law, including giving employers who check the status of new workers through the federal government's online E-Verify system a "rebuttable presumption" they did not break the law.
Sen. Russell Pearce, R-Mesa, who crafted the law, said it is not a one-sided measure.
"We have many laws that prohibit discrimination," he said outside the courthouse. Anyway, Pearce said, no company can be put out of business unless a state judge concludes it knowingly or intentionally hired an undocumented worker.
Pearce also said that hiring undocumented workers is already against federal law. He said this measure ensures Arizona employers follow the law.
"A novel idea, I understand," he said. "We actually think you ought to follow the law in Arizona. And if you can't follow the law, we're going to allow you to go to some other state that maybe will tolerate it to employ those illegal practices."
Gov. Jan Brewer, who also attended Wednesday's hearing, said Scalia got it right in noting the absence of federal action.
"The bottom line is that we believe that if the (federal) government isn't going to do the job, then Arizona is going to do the job," she said. "We are faced with a crisis."
The decision by the Obama administration to challenge the employment law comes despite the fact that it was signed by Democratic Gov. Janet Napolitano, now the administration's Homeland Security secretary. Brewer, a Republican, said she doesn't see an inconsistency.
"She was wearing different moccasins at that time," the current governor said of her predecessor. But Brewer pointed out that Napolitano, in signing the law, said then exactly what she as the current governor is saying now: The federal government was not doing its job.
Napolitano has refused to comment on the 2007 law.
One question not before the court is SB 1070 which lawmakers approved earlier this year. It gives police more power to detain and arrest suspected illegal immigrants.
The U.S. Department of Justice is challenging that law, too, saying states cannot enact their own immigration statutes. That raises the question of whether SB 1070 is at legal risk if the Supreme Court, when it rules this spring, voids this law.
"I think that that's an issue that we'll have to look at," Brewer said.
Only eight of the justices participated in Wednesday's argument, with Elena Kagan recusing herself because of her prior position as U.S. solicitor general. That creates the possibility of a 4-4 tie by the court - a tie that would go to the state because it would uphold an earlier ruling by the 9th Circuit Court of Appeals finding the measure legal.