A federal judge Thursday upheld a controversial new Arizona law that mandates the closure of businesses that knowingly hire illegal immigrants.
U.S. District Judge Neil Wake rejected the arguments of business and immigrant-rights groups, which sued saying the law was an unconstitutional usurping of the federal government's right to regulate immigration.
"The act does not make employers conform to a stricter form of conduct than federal law," Wake wrote in his 37-page decision.
Under the law, a company is placed on probation the first time it is found to have knowingly hired undocumented workers. The second time, its license is revoked, essentially ending its ability to operate in Arizona.
Employers called that punishment "the death penalty." They contended it was too harsh and would push them to discriminate against Latinos to minimize the risk of being closed. Backers argued that it put teeth in oft-flouted federal statutes that forbid hiring illegal immigrants.
The employer and immigration-rights groups said they would appeal to the 9th U.S. Circuit Court of Appeals. They had been expecting Wake -- who was openly critical of their arguments in court hearings in December -- to rule against them.
The law is the only one in the country that mandates the closure of businesses that hire illegal immigrants. Several other states have contacted Arizona looking to duplicate it. Meanwhile, many businesses say they will not expand into Arizona while the law is in effect.
County prosecutors had agreed not to enforce the law until March 1, to allow the appeals to play out. But even before the statute went into effect Jan. 1, it was credited with driving Latino workers from the state.
Some employers have privately acknowledged firing illegal immigrants in response to the bill.
Though there are no hard numbers on how many immigrants have left the state this year, some school districts have seen enrollment drop. And legislators from Arizona's Mexican neighbor state, Sonora, have complained that the law is driving too many people back across the border.
The Arizona Legislature is considering revisions to the statute, including one clarifying that it applies only to workers hired after Jan. 1.