SCOTUS Upholds Kansas Fraud Convictions

Immigration employment verification system does not preempt states

By Andrew R. Arthur on March 4, 2020
  • Through the use of sensible hypotheticals and intricate statutory analysis, the Court identified errors in the logic employed by the Kansas Supreme Court to bar certain state prosecutions of aliens who were unauthorized to work.
  • The Court's decision prevents aliens who have engaged in fraud in obtaining employment in the United States to use the INA as a shield to avoid prosecution for other fraudulent acts they commit to live and work in this country.
  • That decision protects states in their efforts to ferret out identity theft and fraud, and the community as a whole.

On March 3, 2020, in a 5-4 decision, the Supreme Court reversed decisions issued by the Supreme Court of Kansas (SCK) in three cases involving aliens who were prosecuted for fraudulently using other people's Social Security numbers on state and federal tax-withholding forms, finding that the employment-authorization verification provisions in section 274A of the Immigration and Nationality Act (INA) did not preempt the Kansas statutes under which the three were convicted. It is a triumph of common sense over obfuscation.

By way of background, section 274A(a)(1)(B) of the INA requires employers to verify the employment authorization of any individual they hire to work in the United States, primarily by completing a Form I-9. U.S. Citizenship and Immigration Services describes that form, and the eligibility-verification process, as follows:

Use Form I-9 to verify the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must properly complete Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. Both employees and employers (or authorized representatives of the employer) must complete the form.

On the form, an employee must attest to his or her employment authorization. The employee must also present his or her employer with acceptable documents evidencing identity and employment authorization. The employer must examine the employment eligibility and identity document(s) an employee presents to determine whether the document(s) reasonably appear to be genuine and to relate to the employee and record the document information on the Form I-9. The list of acceptable documents can be found on the last page of the form. Employers must retain Form I-9 for a designated period and make it available for inspection by authorized government officers.

At issue in the case were two separate limitations on the use of information obtained during the employment-eligibility verification process in section 274A of the INA. Section 274A(b)(5) of the INA states:

Limitation on use of attestation form.- A form designated or established by the Attorney General under this subsection [the Form I-9] and any information contained in or appended to such form, may not be used for purposes other than for enforcement of this Act and sections 1001, 1028, 1546, and 1621 of title 18, United States Code.

Section 274A(d)(2)(F) of the INA (which relates to restrictions by the president on changes to improve the employment-verification system, which I discussed in-depth in a December 2018 post) states:

Limited use for law enforcement purposes.- The system may not be used for law enforcement purposes, other than for enforcement of this Act or sections 1001, 1028, 1546, and 1621 of title 18, United States Code.

All three of the defendants in those state cases had used a Social Security number issued to someone else on their I-9 forms, and on their Internal Revenue Service W-4 forms. As I have previously described the W-4:

The Form W-4, Employee's Withholding Allowance Certificate, is completed by a new hire for the employer for withholding purposes, as the Internal Revenue Service (IRS) explains. The W-4 is signed under penalty of perjury, and requires the new employee to provide a [Social Security number (SSN). T]he use of a fraudulent SSN by an unauthorized worker would subject that worker to this penalty, assuming that the employer complies with the law and requires the employee to complete the W-4.

Two of the defendants had used those Social Security numbers on their K-4 forms, Kansas's version of the W-4, as well.

The State of Kansas charged the three in state court with "making false information" and/or identity theft and/or fraud charges in connection with their use of those Social Security numbers on their I-9s, W-4s, and/or K-4s, respectively. The charges in connection with the I-9s were dismissed at the trial level when those defendants argued that section 274A of the INA preempted those prosecutions, and the state proceeded on the charges as they related to the other documents. All three were convicted, and their convictions were affirmed by the Kansas Court of Appeals.

The three appealed to the SCK, which reversed, concluding that section 274A(b)(5) of the INA prohibited the state from using "any information contained" in an I-9 "as the bases for a state law identity theft prosecution of an alien who uses another's Social Security information in an I-9." The court continued: "The fact that this information was included in the W–4 and K–4 did not alter the fact that it was also part of the I–9." The State filed a petition for a writ of certiorari with the Supreme Court, which granted review.

The Supreme Court first held that sections 274A(b)(5) and 274A(d)(2)(F) of the INA did not expressly preempt the state-law prosecutions in question.

With respect to section 274A(b)(5), it found:

The Kansas Supreme Court thought that the prosecutions in these cases ran afoul of this provision because the charges were based on respondents' use in their W–4's and K–4's of the same false Social Security numbers that they also inserted on their I–9's. Taken at face value, this theory would mean that no information placed on an I–9 — including an employee's name, residence address, date of birth, telephone number, and e-mail address — could ever be used by any entity or person for any reason.

This interpretation is flatly contrary to standard English usage. A tangible object can be "contained in" only one place at any point in time, but an item of information is different. It may be "contained in" many different places, and it is not customary to say that a person uses information that is contained in a particular source unless the person makes use of that source.

It then went into a series of hypotheticals (including the use of an e-mail address included in a Form I-9 that is also used in various other situations and reporting in the Wapakoneta (Ohio) Daily News that hometown boy Neil Armstrong landed on the moon that also appeared in other sources) in support of its conclusion that "the mere fact that an I–9 contains an item of information, such as a name or address, does not mean that information 'contained in' the I–9 is used whenever that name or address is later employed."

It continued, noting the incongruity that would follow if federal-law prosecutions for falsely providing information on a W-4 would be barred if the same information was also provided in the I-9, and if an employee's name as provided on an I-9 could not be used on an indictment for bank robbery, by his employer for his paycheck, or by his sister to mail him a birthday card.

The Court further rejected SCK's suggestion that "its interpretation applied only to the prosecution of aliens for using a false identity to establish 'employment eligibility'", finding no such limitations in section 274A(b)(5) of the INA.

The Court similarly overruled SCK's reliance on section 274A(d)(2)(F) of the INA (which, as noted, prohibits use of the employment-eligibility authorization system except for enforcement of certain specified federal statutes), finding:

The federal employment verification system does not include things that an employee must or may do to satisfy requirements unrelated to work authorization. And completing tax-withholding documents plays no part in the process of determining whether a person is authorized to work. Instead, those documents are part of the apparatus used to enforce federal and state income tax laws.

It went on to hold that the Kansas statutes as applied were not preempted by implication, either.

Specifically, although the aliens in those cases had argued that section 274A of the INA preempts "the field of fraud on [or relating to] the federal employment verification system," the Court found that submitting forms, relating to the withholding of taxes, "is fundamentally unrelated" to the I-9 system, because "those forms serve entirely different functions." (Emphasis in original.)

It also rejected the contention that federal law precluded the prosecution of these three defendants because the Kansas identity theft and false-information statutes both "require proof that the accused engaged in the prohibited conduct for the purpose of getting a 'benefit.'" The Court held:

This argument conflates the benefit that results from complying with the federal employment verification system (verifying authorization to work in the United States) with the benefit of actually getting a job. Submitting W–4's and K–4's helped respondents get jobs, but this did not in any way assist them in showing that they were authorized to work in this country. Thus, respondents' "relating to" argument must be rejected, as must the even broader definitions of the putatively preempted field advanced by respondents at earlier points in this litigation.

Notably, the Supreme Court determined that section 274A does not "exclude a State from the entire 'field of employment verification'", referencing laws that require potential teachers to provide "legitimate teaching certificates", or that ensure police recruits do not have a history of abuse.

Finally, the Court rejected the contention that the Kansas statutes conflict with federal law. It held that in enacting section 274A "Congress did not decide that an unauthorized alien who uses a false identity on tax-withholding forms should not face criminal prosecution. On the contrary, federal law makes it a crime to use fraudulent information on a W–4."

The overlap between those state statutes and federal criminal laws, the Court found, "does not even begin to make a case for conflict preemption":

Our federal system would be turned upside down if we were to hold that federal criminal law preempts state law whenever they overlap, and there is no basis for inferring that federal criminal statutes preempt state laws whenever they overlap. Indeed, in the vast majority of cases where federal and state laws overlap, allowing the States to prosecute is entirely consistent with federal interests.

Nor did the prosecution of these three cases frustrate federal interests, the Court found, particularly given the fact that federal officers played a role in each, and that the federal government supported Kansas's position. It concluded that, nonetheless:

In the end, however, the possibility that federal enforcement priorities might be upset is not enough to provide a basis for preemption. The Supremacy Clause [of the Constitution] gives priority to "the Laws of the United States," not the criminal law enforcement priorities or preferences of federal officers.

The SCK decision, in essence, would have allowed aliens who have engaged in fraud in completing the I-9 to use section 274A of the INA as a shield against other fraudulent acts committed in the course of working, and living, in the United States. The Court's decision prevented that, and in so doing protects states in ferreting out identity theft and fraud, and the community as a whole.