Many jurisdictions seek to protect undocumented aliens by adopting “sanctuary” policies. Those policies generally constrain the conduct of a state or local government’s own employees. They (1) prohibit public employees from gathering information on the immigration status of those with whom they interact, (2) limit public employees from sharing any such information collected with ICE, or (3) direct state and local authorities to disregard ICE detainer requests. I have discussed these policies previously. Bernard W. Bell, De-Funding Sanctuary Cities, Yale J. on Reg.: Notice & Comment (March 28, 2017); Bernard W. Bell, Sanctuary Cities, Government Records, and the Anti-Commandeering Doctrine, 69 Rutgers L. Rev. 1553 (2018).

On October 5, 2017 California enacted the “Immigrant Worker Protection Act,” Assembly Bill 450 (“AB 450”), one of a trio of sanctuary jurisdiction statutes. Unlike the standard sanctuary city policies, AB 450 imposes limitation on private employers. It prohibits private employers’ voluntarily cooperation with warrantless searches of nonpublic areas within their facilities by ICE agents. AB 450, §1 (adding Calf. Govt. Code §7285.1(a)). Private employers are also barred from providing ICE officials access to employees’ personnel records without a subpoena or warrant. Id., §2 (adding Calf. Govt Code §7285.2(a)(1)). However, I-9 employment verification forms or other documents sought pursuant to a Notice of Inspection are exempted from the subpoena/warrant requirement. Id. (adding Calf. Govt Code §7285.2(a)(1)).

Moreover, AB450 imposes due-process type processes on employers in connection with ICE inspections of I-9 employment verification forms. For an overview of the I-9 inspection process, see U.S. Immigration and Customs Enforcement, Fact Sheet: Form I-9 Inspection Overview (Jan. 8, 201). AB 450 requires employers to notify each current employee . . . of any inspections of I-9 Employment Eligibility Verification forms or other employment records conducted by an immigration agency within 72 hours of receiving notice of the inspection.” AB 450, §4 (adding Calf. Labor Code §90.2(a)(1). And within 72 hours of receipt of a written notice from ICE of the results of the inspection, the employer must: (1) provide each employee whose forms immigration officials find deficient with copies of the notice identifying those deficiencies, and (2) afford such employee an opportunity to meet with the employer to address the deficiencies. Id. (adding Calf. Labor Code §90.2(b)). The law went into effect on January 1.

On March 6, 2018, with great fanfare, the Justice Department sued California over its sanctuary jurisdiction legislation, including AB 450. U.S. Department of Justice, Justice Department Files Preemption Lawsuit Against the State of California to Stop Interference with Federal Immigration Authorities, Press Release 18-274 (March 7, 2018); Thomas Fuller & Vivien Yee, Jeff Sessions Scolds California in Immigration Speech: “We Have a Problem,” N.Y. Times A22 (March 7, 2018). The Complaint asserted that AB 450 stands as an obstacle to federal policy of deporting undocumented aliens, inter alia. United States v. California, Complaint, Dkt. No. 18-264 ¶35.

This post discusses AB 450 and the resulting lawsuit from two perspectives. First, I will examine the Act in light of the law regarding administrative searches, administrative subpoenas, and record inspection regimes. I will then discuss briefly the preemption issues.

Searches, Subpoenas, Records Inspection

AB 450 essentially requires employers to make the federal government follow the constitutional and statutorily-mandated procedures governing regulatory searches, subpoenas, and record inspection. See, e.g., Assembly Floor Analysis, p.3 (Sept. 13, 2017).

Searches

In a series of cases, the U.S. Supreme Court has held that the Fourth Amendment applies to regulatory searches. See, e.g., City of Los Angeles v. Patel, — U.S. —, 135 S.Ct. 2443 (2015); Marshall v. Barlow’s, Inc., 436 U.S. 307 (1978); Camara v. Municipal Court, 387 U.S. 523 (1967); See v. City of Seattle, 387 U.S. 541 (1967). The limitations are designed to ensure that regulated entities are not, in effect, “subject to the discretion of the official in the field.” As the Court explained in Camara, when an agency official demands entry without a warrant, the regulated entity has no way of knowing either whether enforcement of the regulatory regime requires a search of its premises, or the limits of the official’s power to search, inter alia. 387 U.S. at 532. To combat potential agency arbitrariness, regulatory searches must be authorized by a disinterested judicial official. Id.

Warrants authorizing regulatory searches can be based on individualized suspicion (i.e., “probable cause” to believe a regulated entity is violating the law), but also can be based upon “a general administrative plan for the enforcement of the Act derived from neutral sources,” Marshall v. Barlow’s Inn, 436 U.S. at 321. The standards apply in a relaxed way to heavily regulated entities, Patel, 135 S.Ct. at 2454-55 (such as liquor dealers, gun dealers, and junk yards), though such relaxed standards are not likely to apply to general statutory regulatory regimes applicable to all businesses, see, Marshall v. Barlow’s Inn, 436 U.S. at 314, like the limitations on employing aliens.

Consent can provide a basis for searches that do not satisfy the requirements above. Indeed, the cases seem to assume that regulated entities will often consent to searches by regulatory officials. Camara, 387 U.S. at 539; Marshall v. Barlow’s Inn, 436 U.S. at 316. The Court has explained that search by consent rather than a warrant may be preferable to some individuals, by allowing them to avoid the inconvenience of a search pursuant to a warrant. Schneckloth v. Bustamonte, 412 U.S. 218, 228 (1973). The Court has also declared that it is “‘no part of the policy underlying the Fourth and Fourteenth Amendments to discourage citizens from aiding to the utmost of their ability in the apprehension of criminals.’” Id., at 243 (quoting Coolidge v. New Hampshire, 403 U.S. 443, 488 (1971)). But consent can undermine the protections of the warrant process; a search based on consent could be arbitrary and unduly intrusive. See Schneckloth v. Bustamonte, 412 U.S. at 282 (Marshall, J., dissenting). Valid consent to a search does not even require that the person granting consent be advised of their right no to do so. Id. at 229-233. ICE regulations specifically refer to consent as an alternative to obtaining a search warrant. 8 C.F.R. §287.8(f)(2).

The consent doctrine can be insufficiently protective of constitutional rights even when the target of the search consents, because the people from whom consent is sought may lack knowledge of their ability to refuse the request. Schneckloth v. Bustamonte, 412 U.S. at 282 (Marshall, J., dissenting). The consent doctrine is even more problematic when the person who consents is not the target of the search, as in Illinois v. Rodriguez, 497 U.S. 177, 181, 186 (1990) and United States v. Matlock, 415 U.S. 164, 171 (1974). Regulatory searches can sometimes involve searches in which the regulatory entity is not the target of the government’s enforcement efforts. Two types of regulatory regimes that may involve regulatory searches, administrative subpoenas, or records requirements. Some regimes enforce standards that prevent the regulated entity from harming the public, workers, or others with whom such entities interact. The OSHA inspections and housing code inspections involved in Marshall v. Barlow’s Inn and Camera involve just such regulatory regimes. In other regimes the regulated entity functions as a part of a system designed to detect unlawful or even criminal activity of those with whom the regulated entity interacts. The inspection of hotel registration records and firearms records in Patel and United States v. Biswell, 406 U.S. 311 (1972), respectively, exemplify the latter type of regulatory regime.

In the immigration context, employers may have no interest in either ensuring that the government has an adequate justification for conducting a search or contesting government actions that exceed the scope of any legitimate justification for the search. The employer may want to foster a sense of cooperation and may be confident that any untoward effects will not be directed at the company, but at its employees. In the context of worksite immigration raids, employers’ willingness to consent to such searches is a particularly ironic. When undocumented aliens are employed, only the employers are subject to criminal liability. See Arizona v. United States, 567 U.S. 387, 404 (2012). The employees are specifically not made criminally liable (except to the extent that the obtain employment by fraudulent means). Id. at 404-405. Granted, the alien employees’ conduct is not lawful, but the remedies for those transgressions are non-criminal, namely losing eligibility to become a lawful permanent resident or deportation. Id.

So with regard to searches, California is arguably addressing a problem with the law of regulatory searches, namely the potential that arbitrary searches will go unchallenged because the entity that controls the location to be searched fears no regulatory consequences. See, California Senate Judiciary Committee, Employment Regulations: Immigration Worksite Enforcement Actions 2 (June 21, 2017) (hereinafter “Sen. Judiciary Comm. Memo”).

Subpoena and Records Inspections

Agency subpoenas and notices of inspection are generally considered less intrusive than physical searches. Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 195-96 (1946). Absent consent, ICE must present to the employer a notice of inspection three days prior to arriving to review the employer’s employment verification records. 8 C.F.R. § 274a.2(b)(2)(ii). The standards for enforcing administrative subpoenas and notices of inspection are generally not demanding. Oklahoma Press, 327 U.S. 208-213; Endicott Johnson Corp. v. Perkins, 317 U.S. 501 508-509 (1943), and thus the scope of judicial review of such subpoenas and notices is “quite narrow.” EEOC v. Children’s Hospital Medical Center, 719 F.2d 1426, 1428 (9th Cir.1983) (en banc). “The critical questions are: (1) whether Congress has granted the authority to investigate; (2) whether procedural requirements have been followed; and (3) whether the evidence is relevant and material to the investigation.” Id.

But, again, in the alien employment context the person of interest is not the custodian of the record, but the person to whom the record relates. The Court found that the target of an inquiry has no constitutional “due process” right to notification of the issuance a subpoena or similar document to a records custodian. SEC v. Jerry T. O’Brien, Inc., 467 U.S. 735, 742 (1984). And in rejecting any non-constitutional claim to notice, the Court expressed concern about both the difficulty of identifying the target of an inquiry and a forewarned target’s ability to impede legitimate investigations. Id. at 749-51. Congress can, and sometimes does, provide for such a right, Right to Financial Privacy Act, 12 U.S.C. §3405. But Congress also sometimes precludes custodians from reveal having received a subpoena. 50 U.S.C.A. § 1861(4)(d) (national security letters).

Employers may have little to fear from ICE authorities; their obligations with regard to employment verification are modest. Sen. Judiciary Comm. Memo at 12 (“the employer must simply confirm that the documents presented appear, on their face, reasonably genuine and relate to the person who is presenting them”); see, 8 U.S.C.A. § 1324a(a)(3) & (b)(6)(A)(establishing “good faith” defense). As the California Chamber of Commerce explained in opposing an early version of the bill, “[b]elieving its employment eligibility verification and recordkeeping practices are in full compliance with federal law, an employer may determine that cooperation with federal enforcement officials is its best course of action.” Sen. Judiciary Comm. Memo at 8. The real target of ICE’s inspection of I-9 forms and supporting documents are likely aliens who lack the right to work, either because they are undocumented or have visas that do not permit employment. AB 450 is designed to counteract the consent doctrine. Notice does not enable an undocumented employee to impede the investigation. However, the employee can, with notice, leave the job and essentially disappear, frustrating the federal government’s enforcement efforts. See Angelo A. Paparelli, AB 450: California’s Law of Unintended Immigration Consequences (Nov. 1, 2017), accessible at, https://www.calpeculiarities.com/tag/ab-450/ (“many employers have found that when employees learn of an ICE worksite investigation, they quickly disappear for fear of arrest and deportation”).

The provisions requiring employers to provide affected employees with the notice of deficiencies in their employment verification forms and an opportunity to respond to those alleged deficiencies appears to accord employees notice and an opportunity to be heard. In a sense it provides a semblance of the Fifth Amendment “due process” that employees might well be entitled to were they not third parties to ICE’s information demands and subsequent enforcement actions against the employer.

In short, in terms of the law of regulatory searches and government records inspection regimes there are good reasons for the California provisions. They ensure that ICE will routinely secure warrants issued by neutral magistrates. Such warrants may incorporate limits that minimize the intrusions and the burdens on employees, including U.S. citizens and aliens who are entitled to work.

Preemption

However, even substantively sound provisions can be preempted by federal law. The hostility toward ICE’s aggressive enforcement actions is clear in the record of the California legislation. Indeed, in its Complaint, the United States notes that California does not impose such requirements with regard to any other federal law. Complaint, ¶33. In City of New York v. United States, the Court based its holding on the ordinance’s singling out for disfavor city employees’ provision of information to immigration officials. City of New York v. United States, 179 F.3d 29, 36-37 (1999), cert. denied, 528 U.S. 1115 (2000). But such hostility is not itself a basis for preemption, indeed the Constitution contemplates that states act as counterbalances to abusive federal government actions. The Federalist No. 28, at 180-181 (Hamilton) & No. 51, at 323 (Madison) (C. Rossiter ed. 1961).

Moreover, there may be particular reasons for valuing compliance with constitutional and statutory requirements in the context of ICE’s use of regulatory searches, subpoenas, and notices of inspection. California might be concerned about a particular history of abusive workplace immigration raids. Calf. Sen. Memo at 6 (“California has not had a good history with worksite raids”); id. at 7 (statement of Bet Tzedek Legal Services). Or California have concerns about the prospect that employers themselves may feel intimidated by ICE and thus take extraordinary efforts to ensure that they are considered cooperative, even at the expense of the legitimate interests of their employees. California’s concerns on this score may be particularly justified given both the politically charged nature of the immigration debate and the discretion ICE possesses regarding penalizing employers for failing to comply with employee verification requirements. And indeed, the employer’s discretion to consent or refuse consent to a worksite raid might give employers additional leverage over their vulnerable employees.

California’s regulation of businesses operating in the state with respect to the subject of consenting to searches of their premises is probably not prohibited by field preemption. AB 450 does not directly regulate immigrants or aliens; it regulates business entities to ensure worker’s privacy and freedom from detention at the worksite. Some of the employees who benefit from these protections are neither aliens nor immigrants.

Nor can the provisions be invalidated under the “physical impossibility” prong of the implied preemption test. California employers can comply with both federal law and AB 450. Indeed, AB 450 essentially requires employers to insist that the federal government adhere to applicable constitutional and statutory protections, instead of short-circuiting them by means of obtaining consent to conduct searches. In a way AB 450 effectuates federal policies, namely policies designed to limit potential executive abuse.

So the key, as is clear from the United States’ Complaint and Memorandum in Support of its Motion for Preliminary Injunction, is obstacle preemption, i.e., whether AB 450 serves as an obstacle to accomplishing the purposes of the nation’s immigration laws. The obstacle preemption doctrine has become somewhat controversial. Some, like Justice Clarence Thomas and Professor Caleb Nelson, advocate virtually abandoning the obstacle preemption doctrine. Wyeth v. Levine, 555 U.S. 555, 594-604 (2009) (Thomas, J. dissenting); Caleb Nelson, Preemption, 86 Va. L. Rev. 225, 230 (2000). And indeed, formally, a clear statement rule governs implied preemption analysis. The Supreme Court has noted that “[i]n all pre-emption cases . . . we ‘start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.’” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). The California Senate Judiciary Committee’s analysis of preemption issues reflects such an approach, not even discussing “obstacle” preemption. Sen. Judiciary Comm. Memo at 10-11.

But AB 450, like the Arizona legislation at issue in United States v. Arizona, shows the problem of embracing an anemic view of obstacle preemption. Rejection of the concept of “obstacle” preemption and strict adherence to the plain statement rule would lead to preeminence of whichever level of government is the more nimble, rather than guaranteeing the supremacy of legitimate federal interests.

More particularly, such an approach privileges the level of government that has acted last. The first legislature to act may be unable to anticipate future developments, or, more particularly, the later legislature’s attempt to narrow the statute to its literal meaning. When Congress is the first to act, it often cannot anticipate specific situations or changes in circumstances that might affect the operation of the legislation. And Congress certainly may find it difficult to anticipate hostile legislation designed to come as close as possible to the preemption line without crossing it. This inability means that a later‑acting state legislatures or local authorities can severely narrow the reasonable interpretation of the breadth of the congressional legislation if a plain statement approach is followed. This essentially allows that later actor, who will be aware of the circumstances in a way that the earlier actor was not, a greater likelihood of having its policies prevail. Such crabbed preemption doctrines undermines the legitimate scope of federal statutes.

Does AB 450 serve as an “obstacle” to enforcement of immigration laws such that it is preempted? I’ll offer a few preliminary thoughts.

The provisions regarding searches are arguably an “obstacle” to federal law. Regulatory search doctrine does seem to presume a certain amount of consent. Nevertheless, given the relatively modest requirements for a warrant, either individualized suspicion or a pattern of enforcement based on neutral criteria, interfering with the government’s ability to bypass such constitutional protections hardly seems a sufficient impediment to make Ab 450 an obstacle to vigorous enforcement of the immigration laws.

The provisions regarding notices of inspection require a multifaceted analysis. Given the minimal requirements for obtaining a notice of inspection, there is even less reason to conclude that the mere requirement that employers insist upon ICE officials presenting such notices of inspection constitutes an obstacle to proper immigration enforcement. However, AB 450’s employee notification provisions may present a closer question. The question of notice to third parties is a key policy decision balancing frustration of enforcement efforts with fairness to those who are the real parties in interest. As noted above, federal statutes sometimes address these issues. Granted, Congress did not address this issue with regard to notices of inspection. In this setting, notification may allow undocumented aliens to flee, including those who used fraudulent documents to gain employment (and intend to do so again).

Affording employees a state statutory right to correct any deficiencies in I-9 employment verification forms and related documents would seem consistent with federal law. Such an entitlement ensures that employers have correct and up-to-date information to address ICE’s concerns. However, here too there may be a concern about the risk of flight. An undocumented alien may flee only after notified that ICE officials have found deficiencies in his or her employment verification documents. While the risk of flight is presumably lower than at the point the initial inspection is announced, it may remain substantial nevertheless.

In sum, AB 450 addresses some anomalies in the regulatory search and records inspection doctrines. However, judges addressing the issue will likely have to engage in an intricate “obstacle preemption” analysis, akin to that in United States v. Arizona, in resolving the federal government’s challenge to the statute.