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Federal judge upholds Valley Park, Missouri ordinance that suspends business licenses of employers who hire undocumented workers

On January 31, 2008, US District Judge E. Richard Webber of the Eastern District of Missouri upheld a City of Valley Park, Missouri ordinance, which makes it unlawful for business owners to recruit, hire or continue to employ undocumented workers. In addition, every business entity that applies for a business license to engage in any type of work in the city must sign an affidavit, prepared by the city attorney, affirming that they do not knowingly utilize the services or hire any person who is an undocumented worker (Gray v City of Valley Park, EDMo, No 4:07-cv-00881-ERW).

Background. On July 17, 2006, a coalition of landlords, along with the Metropolitan St. Louis Equal Housing Opportunity Council, challenged the Illegal Immigration Relief Act in state court, which at the time addressed both housing and employment issues. St. Louis Circuit Court Judge Barbara Wallace issued a temporary restraining order blocking enforcement of the law (Reynolds v City of Valley Park, St. Louis County Circuit Court, No 06-CC-3802). The city then passed amended versions of the Act, which are the subject of this lawsuit, and also of a new iteration of the Reynolds case. In Reynolds II, the plaintiffs won a temporary restraining order in April, which was then continued by consent of the parties until final resolution.

In this case, the plaintiffs filed a petition for a preliminary injunction and the case was then removed by Valley Park to the US District Court for the Eastern District of Missouri before Judge Webber.

In July 2007, the city repealed the housing provision. The employment provision remained at issue. In addition, Valley Park amended the employment provision to make it effective even without lifting the injunction in the Reynolds case. The plaintiffs argued that that the employment ordinance was not operative because its enacting language stated that it came into effect only on the end of the injunction in Reynolds and that injunction was permanent. The plaintiffs filed a motion seeking a declaration that the employment ordinance was invalid and unenforceable. Both parties also filed cross-motions for summary judgment. The ACLU of Eastern Missouri and the ACLU Immigrants' Rights Project are working with the Mexican-American Legal Defense and Educational Fund and others to challenge the Act.

Decision. The plaintiffs' motion for summary judgment alleged that Valley Park's employment ordinance at issue in the lawsuit was substantially similar to the ordinance(s) at issue in the Reynolds suit. Therefore, the plaintiffs asserted that the city was barred by the doctrine of issue preclusion from litigating the action a second time. Webber determined that issues before his court and the state circuit court were not identical. In Reynolds, the state circuit court found that Valley Park's original employment ordinance (No 1708) and the amended ordinance (No 1715) were invalid and a violation of state law. However, the state court never addressed ordinance No 1722, which provided that the employment provisions contained in the repealed ordinances Nos 1708 and 1715 would be effective upon the termination of any restraining orders or injunctions in force as part of the Reynolds case. Therefore, Webber held that the plaintiffs' motion for summary judgment was denied.

Preemption. As to Valley Park's motion for summary judgment, Judge Webber concluded that the plaintiffs failed to provide sufficient evidence to create a triable issue on any of the allegations in support of their motion for a preliminary injunction. As to their first argument, the employment ordinance was not preempted by federal law. "To the contrary," wrote Webber, "federal law specifically permits such licensing laws as the one at issue." Under the ordinance, the Valley Park Code Enforcement Office can suspend the business license of any business entity that fails to correct a violation of the ordinance within three business days after receiving notification from the office. The Valley Park Code Enforcement Office cannot suspend the business license of the business entity if prior to the date of the violation the business entity had verified the work authorization of that worker using E-Verify. Licenses are immediately reinstated one day after a violation is corrected. For a second or subsequent violation, the Valley Park Code Enforcement Office will suspend the business permit of a business entity for a period of 20 days. After the end of the suspension period, and upon receipt of the prescribed affidavit, the Valley Park Code Enforcement Office will forward the affidavit, complaint and associated documents to the appropriate federal enforcement agency.

Equal protection. Webber wrote that he did "not find any conflict between the provisions of the ordinance and [Immigration Reform and Control Act of 1986] IRCA (as amended by IIRIRA). Both the ordinance and the federal law provide for voluntary participation in the [E-Verify], unless a business is found to be in violation of either the local ordinance or the federal law, in which case participation becomes mandatory. Furthermore, as evidenced by the numerous statements provided by [Valley Park], there has been continued movement towards expanding the [E-Verify], not limiting it." Webber also recognized the recent Arizona litigation in which the district court mandated all Arizona state employers to utilize the federal government's E-Verify program (Arizona Contractors Ass'n v Candelaria, DAriz, Nos CV07-02496-PHX-NVW & No CV 07-02518-PHX-NVW).

Further, the plaintiffs lacked standing to bring their equal protection claim, and in the alternative, they failed to provide any evidence supporting a constitutional violation on that basis. While the plaintiffs asserted that the ordinance would have the effect of discriminating against individuals of Hispanic origin by: (1) "inducing employers to refrain from employing Hispanics;" and (2) "inducing City officials or Valley Park residents to file complaints under the ordinance against business entities based on their employment of Hispanics," the plaintiffs lacked associational standing to bring suit. "The plaintiffs are not an association bringing suit on behalf of its members," wrote Webber " rather [they] are employers attempting to file suit on behalf of potential employees." Alternatively, the district court found that the claimed discriminatory action also lacked state action as the ordinance specifically "warns against the validity of such conduct." Even on the merits, the "ordinance itself provides the reason for its passage, and each statement by the Aldermen support this purpose," wrote Webber.

Due process. Webber also found that the plaintiffs due process claim failed. To satisfy due process, "a governmental entity must provide sufficient pre and post-deprivation process before infringing upon a property right." The ordinance unquestionably provided such process. A business entity is given an opportunity to contest any complaint against it and is entitled to challenge any suspension of a license, all the way through the judicial process, if necessary. Webber also concluded that the ordinance did not violate Missouri law.

Comments. ACLU Immigrants' Rights Project Director Lucas Guttentag commented: "This decision contradicts the other court rulings invalidating municipal ordinances and is at odds with the clear congressional mandate imposing a uniform federal immigration enforcement system. If every city and town across the country were allowed to enact its own immigration laws, we would end up with chaos and confusion causing discrimination and profiling against individuals based on their appearance, accent and ethnicity. The city's attempt to force local employers to use a flawed federal database ignores the proven errors and inaccuracies in that system." Ricardo Meza, Midwest Regional Counsel for the Mexican American Legal Defense Fund commented: "Valley Park wisely abandoned its earlier attempt to deny housing based on suspected immigration status and should do the same with this discriminatory employment law. As Escondido, California and other cities that have rejected or repealed similar ordinances know, punishing immigrants is not only illegal but unwise. The real solution to the misguided concerns that lead localities to enact these ordinances is for Congress to fix the broken immigration system and adopt comprehensive immigration reform."

Ruling opposes Hazleton decision. Of note, on July 26, 2007, a federal district court in Pennsylvania struck down the city of Hazleton, Pennsylvania's Illegal Immigration Relief Act Ordinance (ILRAO), which denied business permits to employers who hired illegal aliens and which barred illegal aliens from renting in the city (Lozano v City of Hazleton, MDPa, July 26, 2007). The court ruled that the ILRAO, first passed July 2006 by the Hazleton City Council, violated federal law, which regulates immigration and the due process rights of employers, landlords and illegal aliens. According to the court, "[t]he ordinances disrupt a well-established federal scheme for regulating the presence and employment of immigrants in the United States. They violate the Supremacy Clause of the United States Constitution and are unconstitutional."

Courts have also struck down local anti-immigrant ordinances in other cases, including: Garrett v City of Escondido (SDCal, 06 CV 2434 JAH (NLS)) and Villas at Parkside Partners v City of Farmers Branch (NDTex, 3:06-cv-02371).

For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.

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