By Linda Bentley | May 4, 2016

Ninth Circuit vacates preliminary injunction against identity theft law

Puente claimed the identity theft laws were unconstitutional and sued Arpaio and Montgomery in an attempt to repeal the laws

Maricopa County Sheriff Joe Arpaio

SAN FRANCISCO, Calif. – On Monday a Ninth Circuit Court of Appeals panel made up of three Clinton nominees, vacated the preliminary injunction granted by U.S. District Judge David G. Campbell, a George W. Bush nominee, reversed the court’s findings regarding the merits of the plaintiffs’ facial preemption claim, dismissed an appeal by the Maricopa County Attorney, and remanded the case brought by Puente Arizona, an illegal alien advocacy group, along with individual illegal aliens against Maricopa County Sheriff Joe Arpaio and Maricopa County Attorney Bill Montgomery challenging provisions of Arizona’s identity theft laws.

The laws prohibit the use of a false identity to obtain employment, which Puente asserts are facially preempted by the federal Immigration Reform and Control Act (IRCA).

Although the panel determined some applications of the identity theft laws may come into conflict with the IRCA’s comprehensive scheme or with the federal government’s exclusive discretion over immigration-related prosecutions, it also found when the laws are applied to U.S. citizens or lawful permanent residents those concerns are not implicated.

Because Arizona’s employment-related identity theft laws were not preempted in all applications, the panel vacated the lower court’s preliminary injunction, reversed its finding that the plaintiff’s facial preemption challenge was likely to succeed on the merits.

The panel remanded the case back to district court with instructions to evaluate the merits of plaintiffs’ remaining claims, including the as-applied preemption challenge.

It also dismissed Montgomery’s appeal from the district court’s denial of the county’s motion to dismiss, stating the appeal did not fall within one of the narrow categories where it would be proper.

The case stems from passage of HB 2779, known as the “Legal Arizona Workers Act” in 2007 in an effort for Arizona to curtail the growing problem of employment-related identity theft within the state.

The law amended Arizona’s aggravated identity theft statute prohibiting the use of information of another (real or fictitious) person “with the intent to obtain employment.”

In 2008, Arizona passed HB 2745, titled “Employment of Unauthorized Aliens,” which expanded the general identity theft statute to also reach employment-related identity theft.

The bills were passed to solve some of Arizona’s illegal immigration problems, while the titles of the legislation and legislative history show there was intent on the part of Arizona’s legislators to prevent illegal aliens from coming to and remaining in the state.

However, as Circuit Judge Richard C. Tallman points out the bills were also aimed at curbing the well-documented problem of identity theft in Arizona, whereas between 2006 and 2008 Arizona had the highest per-capita identity theft rates in the nation and one third of all identity theft complaints in the state involved employment-related fraud.

Most of the enforcement actions were brought against illegal aliens.

However, some authorized aliens and U.S. citizens have also been prosecuted.

One such prosecution was a U.S. citizen who used another person’s identity to hide a negative criminal history from a potential employer.

Puente claimed the identity theft laws were unconstitutional and sued Arpaio and Montgomery in an attempt to repeal the laws.

Claiming the laws violated the Supremacy Clause and the Equal Protection Clause, on Aug. 8, 2014 Puente moved for a preliminary injunction solely on its facial preemption claim.

The district court agreed that the laws were likely unconstitutional on their face and granted the preliminary injunction on Jan. 5, 2015, enjoining Arizona from enforcing the statutes and portions of which addressed actions committed “with the intent to obtain or continue employment.”

The Ninth Circuit panel only reviewed Arizona’s challenge to the preliminary injunction and there has been no final judgment entered to date on the merits of the case in district court.

The panel concluded Arizona’s employment-related identity theft laws are not preempted in all applications and reversed the district court’s finding that the laws are likely facially preempted.