Arizona’s crackdown on employers who hire unauthorized aliens won sympathy and support from a number of justices during Supreme Court arguments Wednesday in a challenge to the state’s immigration law.

The potential for a 4-4 split — which would be a victory for Arizona — also loomed large as the justices considered whether the state law is inconsistent with, and thus preempted by, a 1986 federal immigration act. Justice Elena Kagan has recused from the case because of her prior work as solicitor general.

Shortly into the challengers’ arguments, Justice Antonin Scalia commented, “Arizona says the [federal] scheme in place has not been enforced and Arizona is in serious trouble,” financially and otherwise.

Arizona has had to take a “massive step,” he said, laying the blame squarely on the federal government.

The case — Chamber of Commerce of the U.S. v. Whiting — was brought by a coalition of civil rights and business groups, including the Chamber, the American Civil Liberties Union, the ACLU of Arizona, the Mexican-American Legal Defense and Education Fund, and the National Immigration Law Center.

The coalition contends that federal immigration law preempts the Legal Arizona Workers Act. The state law, enacted in 2007, punishes employers who hire unauthorized workers depending on the severity and repetition of the violation. The most serious penalty is to revoke the license to do business. It also requires employers to participate in E-Verify, a voluntary federal pilot program that checks a prospective worker’s employment eligibility.

The federal Immigration Reform and Control Act of 1986, however, expressly preempts any state or local law imposing civil or criminal sanctions, “other than through licensing and similar laws,” on those who employ, recruit or refer for a fee for employment, unauthorized aliens.

The U.S. Court of Appeals for the 9th Circuit disagreed that the law was preempted. The United States entered the case at the Supreme Court level and is seeking, with the challengers, to reverse the 9th Circuit decision.

Just a week after presenting California’s objections to a federal prison release order, Carter Phillips, partner in Sidley Austin, was back at the high court podium to challenge the Arizona law for the Chamber coalition.

Phillips stoically argued that Congress in the 1986 federal act provided the “exclusive and exhaustive” method for determining worker authorization. That law, he added, is carefully calibrated to ensure that illegal workers are not hired and, at the same time, to protect against discrimination against legal workers who may be foreign in appearance.

Phillips said it would be “remarkable” if Congress meant to allow a “state shadow enforcement mechanism” as Arizona has created.

But the veteran high court litigator and acting Solicitor General Neal Katyal faced a series of probing questions about the federal law’s language that allows states to impose sanctions through “licensing and similar laws.”

Chief Justice John Roberts Jr. said Congress “swept pretty broadly” when it said “licensing laws and similar laws.” And Justice Anthony Kennedy noted, “I see no limitation on what a state can decide is a licensing law.”

Katyal said Congress intended to leave in place the states’ traditional licensing authority — laws that deal with an entity’s fitness to do business. “This licensing law looks very different” from the traditional laws and bears no indicia of traditional licensing laws, he said. “On its face, it looks like a punishment law.”

What Arizona has done, he warned, is “what 40,000 other localities can do if this law is upheld.”

Arizona Solicitor General Mary O’Grady outlined how the state law works, insisting that each provision tracks — not conflicts with — federal law. Justice Ruth Bader Ginsburg noted that the federal E-Verify program is a voluntary program for employers. “How can Arizona turn it into something that’s mandatory?” she asked.

O’Grady answered that there is no conflict as long as the requirement is not a burden on Congress’ objectives in creating the program. “We don’t impose a penalty if employers don’t use it.”

Justice Stephen Breyer noted that there is an “enormous disparity” in the penalty imposed by Arizona for illegal hires and the federal law. “If it turns out you hired an illegal workers, your business is finished,” he said.

But that is the “natural consequence” of the licensing language in the federal law, said O’Grady. “We think this is a fitness-to-do-business law,” she argued. “If you knowingly employ an alien, we will take an action related to your fitness to do business.”

Ginsburg asked Phillips during his rebuttal what a state can do that would be complementary to federal immigration law. Phillips said if an employer is convicted of violating the federal law and happens to be a barber, for example, the state law could say the barber will lose his license for a federal conviction. “Convicted by a federal government that hasn’t gone after many convictions,” interjected Scalia. “That’s the whole problem.”

Marcia Coyle can be contacted at mcoyle@alm.com.