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Supreme Court mulls Arizona immigration employment law

The US Supreme Court [official website; JURIST news archive] heard oral arguments [day call, PDF; merit briefs] Wednesday in Chamber of Commerce v. Whiting [oral arguments transcript, PDF; JURIST report] on whether an Arizona statute imposing sanctions on employers that hire illegal immigrants is preempted by federal law. According to 8 USC § 1324(a)(h)(2) [text], federal law preempts any "[s]tate or local law imposing civil or criminal sanctions upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens," except in cases of state licensing laws. The US Court of Appeals for the Ninth Circuit upheld [opinion, PDF; JURIST report] the Legal Arizona Workers Act [materials] on the basis that the state statute is a licensing law, which exempts it from being preempted by the federal law. Counsel for petitioners argued that:

Congress provided for an exhaustive and exclusively Federal method of bringing to the attention of Federal authorities, problems and worker authorization, the method by which those matters should be investigated, the method by which they should be adjudicated, all of which are controlled as a matter of Federal, exclusive Federal activity; and indeed the ultimate judicial review goes exclusively to the Federal courts of appeals.
Counsel for the respondents argued that, "[t]hrough their police powers, States traditionally have the authority to regulate the conduct of employers within their jurisdiction to determine what conduct warrants issuance of a State license and to determine what conduct justifies suspending or revoking such a license." Justice Elena Kagan took no part in the arguments, which could result in a 4-4 split decision. Such a ruling would leave the Ninth Circuit's decision in place but would not be precedential in future cases.

Also Wednesday, the court heard arguments in Chase Bank USA v. McCoy [oral arguments transcript, PDF; JURIST report] on whether a creditor seeking to raise the interest rate on a credit card where the cardholder defaulted must provide the cardholder with a change in terms notice. According to Regulation Z, 12 CFR § 226.9(c) [text], a creditor must provide a cardholder with a change in terms notice when the contractual terms governing the account have changed. The court will determine if a change in the interest rate due to the cardholder's default falls within the terms of the statute. The Ninth Circuit found [opinion, PDF] that Regulation Z does require the creditor to provide the cardholder with a change in terms notice where the cardholder has defaulted triggering an increase in the interest rate.

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