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Lozano v. City of Hazleton

September 9, 2010

PEDRO LOZANO; HUMBERTO HERNANDEZ; ROSA LECHUGA; JOHN DOE 1; JOHN DOE 2; JOHN DOE 3, A MINOR, BY HIS PARENTS; JANE DOE 1; JANE DOE 2; JANE DOE 3; JOHN DOE 4, A MINOR BY HIS PARENTS, BRENDA LEE MIELES; CASA DOMINICANA OF HAZLETON, INC.; HAZLETON HISPANIC BUSINESS ASSOCIATION; PENNSYLVANIA STATEWIDE LATINO COALITION; JANE DOE 5; JOHN DOE 7; JOSE LUIS LECHUGA
v.
CITY OF HAZLETON, APPELLANT



Appeal from the United States District Court for the Middle District of Pennsylvania (No. 3:06-cv-01586) District Judge: Honorable James M. Munley.

The opinion of the court was delivered by: McKEE,Chief Judge.

PRECEDENTIAL

Argued October 30, 2008

Before: McKEE, Chief Judge, and NYGAARD and SILER,*fn1 Circuit Judges

OPINION

TABLE OF CONTENTS

I. INTRODUCTION....................................8

II. FACTUAL AND PROCEDURAL BACKGROUND.......10

A. Hazleton and its Ordinances. ...................10

1. The Illegal Immigration Relief Act Ordinance.14

2. The Rental Registration Ordinance..........21

B. The Plaintiffs. ...............................22

C. Procedural History............................24

III. JURISDICTION AND STANDARD OF REVIEW........26

IV. SEVERABILITY AND STANDING...................26

A. General Principles of Standing...................30

B. Constitutional Standing. .......................33

1. The Employment Provisions...............33

2. Private Cause of Action. .................41

3. Housing Provisions......................43

a. Landlord Plaintiffs.................44

b. Tenant Plaintiffs..................52

C. Prudential Standing. ..........................56 7

V. ANONYMITY AND CONFIDENTIALITY..............62

VI. DISCUSSION.....................................66

A. Federal Immigration Law.......................67

1. The Immigration and Nationality Act........67

2. The Immigration Reform and Control Act....73

3. The Illegal Immigration Reform and Immigrant Responsibility Act...................78

B. State and Local Immigration Laws................81

C. Pre-emption .................................84

1. Employment Provisions. .................94

a. Presumption Against Pre-emption. ...94

b. Express Pre-emption...............97

c. Conflict Pre-emption..............105

2. Housing Provisions.....................132

VII. CONCLUSION ..................................146

VIII. APPENDIX. ...................................147

A. The Illegal Immigration Relief Act Ordinance. ....147

B. Rental Registration Ordinance..................167

I. INTRODUCTION

"Since the late 19th century, the United States has restricted immigration into this country. . . . But despite the existence of these legal restrictions, a substantial number of persons have succeeded in unlawfully entering the United States, and now live within [the] various States." Plyler v. Doe, 457 U.S. 202, 205 (1982). The dispute we are now called upon to address is one of an increasing number of cases that have arisen from actions that state and local governments have taken because of illegal immigration.

The City of Hazleton, Pennsylvania ("Hazleton" or the "City") is appealing a permanent injunction that the district court entered prohibiting Hazleton's enforcement of two local ordinances that attempt to regulate employment of, and provision of rental housing to, certain aliens. Several individuals and organizations sued to enjoin enforcement of the ordinances arguing that they violate the United States Constitution, as well as federal and state statutes. The district court agreed and enjoined Hazleton from enforcing the ordinances in their entirety.

We now hold that the district court erred in reaching the merits of the challenge to the private cause of action provision because no plaintiff has standing to challenge that provision. Accordingly, that portion of the district court's order will be vacated. However, although our reasoning differs somewhat from the analysis used by the district court, we conclude that it correctly enjoined the rest of the challenged ordinances. We will therefore affirm the district court's order in all other respects.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. Hazleton and its Ordinances

The City of Hazleton is located in Luzerne County in northeastern Pennsylvania. Lozano v. City of Hazleton, 496 F. Supp. 2d 477, 484 (M.D. Pa. 2007). Under Pennsylvania law, Hazleton is classified as a City of the Third Class and operates under an "Optional Plan B" form of government. Id. Its executive is a mayor, and its legislature is a city council. Id.

Hazleton's population was only 23,000 in 2000. Id. Between 2000 and the time of trial, however, its population increased to between 30,000 and 33,000. Id. Much of this growth was due to an influx of Latino families who migrated from New York and New Jersey to Pennsylvania in the early 2000s. Id. These newcomers included United States citizens and lawful permanent residents, as well as persons lacking lawful immigration status, who are often referred to as "undocumented immigrants" or "illegal aliens."*fn2 Id.

Hazleton's mayor, as well as other local officials, subsequently concluded that aliens lacking lawful status were to blame for certain social problems in the City, see J.A. 1672-85, and that the federal government could not be relied upon to prevent such aliens from moving into the City, or to remove them, see Lozano, 496 F. Supp. 2d at 522 n.44. Accordingly, City officials decided to take independent action to regulate the local effects of unlawful immigration. See J.A. 1385, 1486-87.

Beginning on July 13, 2006, Hazleton's City Council began enacting a series of ordinances designed to address these concerns. Lozano, 496 F. Supp. 2d at 484.

This litigation concerns two of those ordinances: the Illegal Immigration Relief Act Ordinance ("IIRAO"), which consists of Ordinance 2006-18, as amended by Ordinance 2006-40 and Ordinance 2007-6; and the Rental Registration Ordinance ("RO"), which consists of Ordinance 2006-13.*fn3 These ordinances attempt to regulate the employment of unauthorized aliens, and the provision of rental housing to aliens lacking lawful immigration status, within Hazleton.

1. The Illegal Immigration Relief Act Ordinance

The IIRAO begins with a statement of findings and a declaration of purpose, which asserts:

[t]hat unlawful employment, the harboring of illegal aliens in dwelling units in the City of Hazleton, and crime committed by illegal aliens harm the health, safety and welfare of authorized US workers and legal residents in the City of Hazleton. Illegal immigration leads to higher crime rates, subjects our hospitals to fiscal hardship and legal residents to substandard quality of care, contributed to other burdens on public services, increasing their cost and diminishing their availability to legal residents, and diminishes our overall quality of life.

IIRAO § 2C.*fn4 In response to these concerns, the IIRAO: seeks to secure to those lawfully present in the United States and this City, whether or not they are citizens of the United States, the right to live in peace free from the threat [of] crime, to enjoy the public services provided by this city without being burdened by the cost of providing goods, support and services to aliens unlawfully present in the United States, and to be free of the debilitating effects on their economic and social well being imposed by the influx of illegal aliens to the fullest extent that these goals can be achieved consistent with the Constitution and Laws of the United States and the Commonwealth of Pennsylvania.

IIRAO § 2F.

Section 4 of the IIRAO asserts that it is unlawful "for any business entity" to "recruit, hire for employment, or continue to employ" or "permit, dispatch, or instruct any person" who is an "unlawful worker" to perform work within Hazleton.*fn5 IIRAO § 4A. Under the IIRAO, an "unlawful worker" is defined as: "a person who does not have the legal right or authorization to work due to an impediment in any provision of federal, state or local law, including but not limited to a minor disqualified by nonage, or an unauthorized alien as defined by [8 U.S.C. § 1324a(h)(3)]." IIRAO § 3E. Section 4A requires "[e]very business entity that applies for a business permit" to "sign an affidavit . . . affirming that they do not knowingly utilize the services or hire any person who is an unlawful worker." IIRAO § 4A.

Section 4 also provides for public monitoring, prosecution, and sanctions. Any City resident may submit a complaint to Hazleton's Code Enforcement Office alleging that a local business entity is violating the section's prohibition on utilizing the services of an unlawful worker. IIRAO § 4B(1). Upon receipt of such complaint, the Code Enforcement Office requests identity information about the alleged unlawful worker from the employing business, and that business must provide the information within three business days, or Hazleton will suspend its business license. IIRAO § 4B(3). If the worker is alleged to be an unauthorized alien, the Code Enforcement Office submits any identity information received from the business to the federal government, pursuant to 8 U.S.C. § 1373, for verification of "the immigration status of such person(s)."*fn6 Id.

If the Code Enforcement Office confirms that the worker lacks authorization to work in the United States, the business must terminate that person within three business days or the City will suspend its business license.*fn7 IIRAO § 4B(4). Safe harbor from this sanction is provided to businesses that verify the work authorization of its workers through use of the "Basic Pilot Program" (which has since been named "E-Verify"). IIRAO § 4B(5). E-Verify is a federal program for verifying work authorization which Congress has authorized for use on a trial basis.

A business whose license is suspended under the IIRAO regains its license one business day after it submits an affidavit affirming that it has terminated the unlawful worker. IIRAO § 4B(6). If a business is found to have employed two or more unauthorized aliens at one time, it must also confirm its enrollment in E-Verify in order to recover its license.*fn8 IIRAO § 4B(6)(b). If a business entity violates the IIRAO a second time, Hazleton suspends its license for a minimum of twenty days and reports the violation, whether or not eventually corrected, to the federal government. IIRAO § 4B(7).

The IIRAO further creates a private cause of action against businesses that employ unlawful workers. Section 4E of the IIRAO makes it "an unfair business practice" for a business entity to discharge "an employee who is not an unlawful worker," if, on the date of the discharge, "the business entity was not participating in [E-Verify] and the business entity was employing an unlawful worker." IIRAO § 4E(1). An employee discharged under these conditions may sue the business entity under the IIRAO for treble actual damages, as well as reasonable attorney's fees and costs.*fn9 IIRAO § 4E(2).

The IIRAO also addresses the "harboring" of persons lacking lawful immigration status. Section 5 makes it "unlawful for any person or business entity that owns a dwelling unit in the City to harbor an illegal alien in the dwelling unit, knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law."*fn10 IIRAO § 5A. "Harboring" is broadly defined. The ordinance states: "to let, lease, or rent a dwelling unit to an illegal alien . . . shall be deemed to constitute harboring." IIRAO § 5A(1). Additionally, Section 7 of the IIRAO makes legal immigration status a condition precedent to entering into a valid lease. IIRAO § 7B. All leases entered into by persons lacking lawful status are deemed breached. Id.

The mechanisms for enforcing the housing provisions of the IIRAO are similar to those set forth above for enforcing the employment provisions. Thus, any City resident may file a complaint with Hazleton's Code Enforcement Office alleging that a property owner is illegally "harboring" a tenant who is an "illegal alien." IIRAO § 5B(1). Once such a complaint is received, the Code Enforcement Office may request identifying information about the named tenant from the property owner, and the property owner must provide that information within three days. IIRAO § 5A(3). The City then verifies the legality of the tenant's immigration status with the federal government, pursuant to 8 U.S.C. § 1373(c). IIRAO § 5B(3).

If the federal government confirms that the tenant lacks lawful immigration status, the IIRAO gives the property owner five business days to evict that tenant. IIRAO § 5B(4). If the owner fails to do so, the City suspends the owner's rental license and bars the owner from collecting any rent for the applicable dwelling unit.*fn11 IIRAO § 5B(4)-(5). These sanctions end one business day after the owner submits an affidavit affirming that s/he has corrected the violation. IIRAO § 5B(6). Any subsequent violation subjects the owner to a fine of $250.00 per day per "adult illegal alien" harbored in a dwelling unit, as well as suspension of her/his rental license. IIRAO §§ 5A(2), 5B(8).

2. The Rental Registration Ordinance

The RO operates in conjunction with the anti-harboring provisions of the IIRAO. Section 7 of the RO requires that any prospective occupant of rental housing over the age of eighteen apply for and receive an occupancy permit. RO §§ 1m, 7b. To receive that permit, the prospective occupant must pay a ten-dollar fee and must submit certain documents, including "[p]roper identification showing proof of legal citizenship and/or residency" to Hazleton's Code Enforcement Office. RO § 7b. Hazleton landlords are required to inform all prospective occupants of this requirement, and they are prohibited from allowing anyone over the age of eighteen to rent or occupy a rental unit, unless that person has a permit. Id.

Section 10 of the RO provides that a landlord found guilty of renting to someone without a permit must pay an initial fine of $1000 per unauthorized occupant, and an additional fine of $100 per day per unauthorized occupant until the violation is corrected. RO § 10b. An authorized occupant of rental housing who is found guilty of permitting someone without a rental permit to live in her/his apartment must pay the same fine. Id.

B. The Plaintiffs

The following six plaintiffs claim that they have standing to bring this suit: Pedro Lozano, John Doe 1, John Doe 3, John Doe 7, Jane Doe 5, and the Hazleton Hispanic Business Association ("Plaintiffs").*fn12 These Plaintiffs include Hazleton business entities, landlords, and tenants, as well as an organization whose members include Hazleton business entities and landlords. We briefly describe these Plaintiffs, and the basic facts underlying each Plaintiff's claim to standing.

Pedro Lozano is a lawful permanent resident who immigrated to the United States from Colombia in January 2002. Lozano, 496 F. Supp. 2d at 485-86. He owns a duplex in Hazleton and rents out half of it to help pay his mortgage. Id. at 488. He hires contractors to perform repairs on his property as needed. Id. at 489.

John Doe 1 was born in Mexico, and had lived in Hazleton for six years at the time of trial. Id. at 486. He is unsure of his immigration status, but believes that he could be removed from the United States. Id. He is similarly unsure of his work authorization. Id. John Doe 1's landlord evicted him because of the risk of being fined pursuant to the aforementioned provisions of the IIRAO and the RO. Id. at 497.

John Doe 3 had lived in Hazleton for four years at the time of trial. Id. at 486. He understands his immigration status to be "illegal," and he rents an apartment within Hazleton. Id. at 497.

John Doe 7 and Jane Doe 5 were born in Columbia and had lived in Hazleton for more than five years at the time of trial. Id. at 486. They rent a house in Hazleton, but fear eviction and being forced to leave Hazleton if the ordinances are enforced. Id. at 497.

The Hazleton Hispanic Business Association ("HHBA") is an organization of business owners from the Hazleton area that exists to "promote the interest of [its] business members and to project the image of the Hispanic business community." Id. at 492 (internal quotation marks omitted). HHBA's president, Rudolfo Espinal, owns three rental properties in Hazleton and hires contractors to perform repairs on those properties as needed. Id. at 492-93.

C. Procedural History

As noted above, numerous plaintiffs filed this action for injunctive relief based upon challenges to the validity of the IIRAO and the RO. Lozano, 496 F. Supp. 2d at 485. The district court granted these plaintiffs' motion for a temporary restraining order, and the parties agreed to extend that order until the case could be resolved on its merits. Id. These ordinances have never been enforced, and the challenges asserted are facial.

The amended complaint alleges that the ordinances violate the Supremacy Clause, the Due Process Clause, and the Equal Protection Clause of the United States Constitution; 42 U.S.C. § 1981; the federal Fair Housing Act, 42 U.S.C. §§ 3601-31; plaintiffs' privacy rights; Pennsylvania's Home Rule Charter Law, 53 Pa. Cons. Stat. §§ 2961-67; Pennsylvania's Landlord and Tenant Act, 68 Pa. Cons. Stat. §§ 250.101-50.602; and the limits of Hazleton's police powers. Id.

At the conclusion of a nine-day bench trial, the district court issued a thorough opinion and order permanently enjoining the City from enforcing the ordinances. The court concluded that eight of the eleven plaintiffs had standing to challenge the IIRAO and the RO, and that it was appropriate for the John and Jane Doe Plaintiffs to proceed anonymously. The court held that the IIRAO and the RO violate the Supremacy and Due Process Clauses of the United States Constitution, as well as 42 U.S.C. § 1981. The court also held that Hazleton, as a City of the Third Class, lacked authority under Pennsylvania's Home Rule Charter Law to create the IIRAO's private cause of action, and that it exceeded its police powers in enacting these ordinances.*fn13

This appeal followed. Hazleton argues that Plaintiffs lack standing, and that the district court abused its discretion both in permitting the John and Jane Doe Plaintiffs to proceed anonymously and in issuing a confidentiality order prohibiting Hazleton from disclosing the Doe Plaintiffs' identity information to the federal government. Hazleton further contends that Plaintiffs' claims are meritless, and that the ordinances are valid under federal and state law.

III. JURISDICTION AND STANDARD OF REVIEW

The district court had jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. We have jurisdiction pursuant to 28 U.S.C. § 1291.

We review a district court's conclusions of law de novo and its factual findings for clear error. See, e.g., McCutcheon v. Am.'s Servicing Co., 560 F.3d 143, 147 (3d Cir. 2009). We review a district court's grant of a motion to proceed anonymously and grant of a confidentiality order for abuse of discretion. Doe v. C.A.R.S. Prot. Plus, Inc., 527 F.3d 358, 371 & n.2 (3d Cir. 2008).

IV. SEVERABILITY AND STANDING

We first address the threshold question of Plaintiffs' standing. Here, however, standing implicates the issue of severability -- an issue which has yet to be explicitly discussed in this suit. As we explained in Contractors Ass'n v. City of Philadelphia, "[c]ourts considering constitutional challenges to statutes often analyze standing problems in terms of the severability doctrine. . . . The severability doctrine governs whether [plaintiffs] have standing to challenge [an] entire [o]rdinance, or just [certain provisions]." 6 F.3d 990, 996 (3d Cir. 1993).

Severability, however, like any non-jurisdictional issue, can be waived, and it is clear that Hazleton has, with one exception, waived issues of severability here. The district court considered whether Plaintiffs have standing to challenge the "employment provisions" and the "housing provisions" of these ordinances as collective wholes, and conducted its merits inquiries accordingly. See, e.g., Lozano, 496 F. Supp. 2d at 518 ("[T]he ordinances at issue have two distinct provisions, one directed to employment issues and one aimed at landlord/tenant issues, [and] we will discuss each topic separately with regard to pre-emption."). On appeal, Hazleton does not contest the district court's failure to further sever the ordinances. Rather, Hazleton's brief characterizes the ordinances the same way the district court did. Thus, Hazleton argues that Plaintiffs lack standing to challenge the "employment provisions" and the "housing provisions," and that the "employment provisions" and the "housing provisions" are not pre-empted, without further differentiating among those provisions.*fn14

The sole severability issue Hazleton has not waived concerns the IIRAO's private cause of action. Hazleton has argued that the private cause of action is severable from the rest of the IIRAO's "employment provisions" both in its brief and at oral argument. Severability of a local ordinance is a question of state law, and Pennsylvania law favors severability. Contractors Ass'n, 6 F.3d at 997. Additionally, there is a presumption in favor of severability where, as here, the ordinances contain a severability provision. Id. For an ordinance to be severable, "[t]he legislating body must have intended that the act or ordinance be separable and the statute or ordinance must be capable of separation in fact. The valid portion of the enactment must be independent and complete within itself." Saulsbury v. Bethlehem Steel Co., 196 A.2d 664, 667 (Pa. 1964) (emphasis omitted).

Here the IIRAO's severability provision indicates that Hazleton's City Council did intend the private cause of action provision to be severable from the balance of its regulatory scheme. Furthermore, the private cause of action is not intertwined with the other "employment provisions," most of which concern business licensing requirements. It can operate independently and is "capable of separation in fact." Id. We therefore conclude that it is severable. Accordingly, we will evaluate Plaintiffs' standing to challenge the IIRAO's private cause of action independently of their standing to challenge the other "employment provisions" and the "housing provisions."

In essence, the question of standing asks "whether the litigant[s] [are] entitled to have the court decide the merits of the dispute." Warth v. Seldin, 422 U.S. 490, 498 (1975). As we will explain, we conclude that there is at least one Plaintiff with standing to challenge the employment and housing provisions of these ordinances. Accordingly, we must consider the merits of the challenges to those provisions. See Rumsfeld v. Forum for Academic and Institutional Rights, Inc., 547 U.S. 47, 53 n.2 (2006) ("[T]he presence of one party with standing is sufficient to satisfy Article III's case-or-controversy requirement.").

However, as we will also explain, we find that no Plaintiff has standing to challenge the IIRAO's private cause of action. Accordingly, review of the legality of that provision must await a challenge by a plaintiff who can establish an Article III injury.

A. General Principles of Standing

The irreducible minimum of any standing inquiry derives directly from Article III of the United States Constitution. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Article III limits the jurisdiction of federal courts to "Cases" and "Controversies." U.S. Const. art. III, § 2; see also Lujan, 504 U.S. at 559-60. The judicial power established by Article III is therefore not "an unconditioned authority to determine the constitutionality of legislative or executive acts." Hein v. Freedom From Religion Found., Inc., 551 U.S. 587, 598 (2007) (internal quotation marks omitted). Rather, federal courts are permitted to address these questions only if actually adjudicating "the rights of individuals." Id. (internal quotation marks omitted). Thus, the inquiry into standing must focus on whether a claim is being brought "by a party whose interests entitle him to raise it." Id. (internal quotation marks omitted). A plaintiff's "interests" satisfy Article III when the following three elements are present:

First, the plaintiff must have suffered an injury in fact -- an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of -- the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court.

Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

Lujan, 504 U.S. at 560-61 (internal citations, quotation marks, and alterations omitted).

In addition to these constitutionally required elements of standing, federal courts have developed a body of self-imposed limitations on the exercise of their judicial power. See Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11 (2004); see also Oxford Assocs. v. Waste Sys. Auth., 271 F.3d 140, 145 (3d Cir. 2001). Accordingly, "[e]ven in cases concededly within our jurisdiction under Article III," we will decline to decide the merits of a case when these "prudential standing" requirements are not satisfied. Elk Grove Unified Sch. Dist., 542 U.S. at 11. Prudential standing encompasses: "the general prohibition on a litigant's raising another person's legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff's complaint fall within the zone of interests protected by the law invoked." Allen v. Wright, 468 U.S. 737, 751 (1984).

An organization wishing to bring suit on behalf of its members must satisfy a specific combination of constitutional and prudential standing requirements. See United Food and Commercial Workers Union Local 751 v. Brown Grp., Inc., 517 U.S. 544, 556-57 (1996) (explaining that the first two prongs of the associational standing test are constitutional, while the third prong is prudential). To establish that it has "associational standing" and can represent its members' interests in federal court, an organization must show that:

(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.

Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 343 (1977).

Here, Plaintiffs claim that Lozano and the HHBA have standing to challenge the employment provisions of the IIRAO, and that Lozano, the HHBA, and the Doe Plaintiffs have standing to challenge the housing provisions of the IIRAO and the RO.

B. Constitutional Standing

1. The Employment Provisions

As discussed above, the IIRAO's employment provisions require businesses to submit affidavits affirming that they do not utilize the services of unlawful workers; incentivize, and in certain circumstances mandate, the use of E-Verify; create procedures for adjudicating independently of federal law whether a business has employed an unauthorized alien; and penalize a business for doing so by suspending its business license.

The district court held that Lozano had standing to challenge these provisions for himself, and that the HHBA had standing to challenge them on behalf of its member, Rudolfo Espinal.*fn15 Lozano is a landlord, and Espinal is a landlord and owner of a real estate agency. Both are business entities under the IIRAO,*fn16 and both sometimes hire contractors to perform work on their rental properties. Accordingly, the district court found that they faced imminent concrete injury, because if the IIRAO were enforced, they would be compelled "to comply with [its] employer requirements . . . adding a burden of time and expense to [their] operations." See Lozano, 496 F. Supp. 2d at 489. Hazleton challenges the district court's conclusion on several grounds.

Hazleton's primary argument on appeal is that the "injury" these Plaintiffs face is nothing more than the "cost of compliance" with the IIRAO, and that this is a generalized burden insufficiently particularized to satisfy the injury-in-fact requirement of Article III. It is well-established that an injury must be particularized to support standing. A "particularized" injury is one that "affect[s] the plaintiff in a personal and individual way," Alston v. Countrywide Fin. Corp., 585 F.3d 753, 763 (3d Cir. 2009) (quoting Lujan, 504 U.S. at 560 n.1) (internal quotation marks omitted), and is established when a plaintiff shows that s/he has "sustained or is immediately in danger of sustaining some direct injury . . . and not merely that [s/]he suffers in some indefinite way in common with people generally," Ams. United for Separation of Church & State v. Reagan, 786 F.2d 194, 199 (3d Cir. 1986) (internal quotation marks omitted).

Thus, the Supreme Court has rejected attempts by taxpayers to bring suits challenging the government's use of tax dollars. For instance, in Frothingham v. Mellon, 262 U.S. 447 (1923), the Supreme Court held that a taxpayer lacked standing to challenge a federal appropriations act that she alleged violated the Tenth Amendment. The Court explained that the harm a taxpayer suffers when the government unlawfully uses taxpayer funds is "shared with millions of others [and] comparatively minute and indeterminable." Id. at 487. Because such an injury is a matter "of public and not of individual concern," it is not particularized, and therefore insufficient to give rise to Article III standing. Id. The Court has reaffirmed this conclusion many times since, explaining that: a plaintiff raising only a generally available grievance about government -- claiming only harm to his and every citizen's interest in proper application of the Constitution and laws, and seeking relief that no more directly and tangibly benefits him than it does the public at large -- does not state an Article III case or controversy.

Lujan, 504 U.S. at 573-74.

Hazleton attempts to transpose these principles into a quite different context. Hazleton suggests that because all business entities in Hazleton are required to comply with the IIRAO, the burden of complying with the ordinance is "generalized" and not "particularized." Accordingly, it argues that Lozano and Espinal -- and presumably all business entities in Hazleton -- lack standing to challenge the IIRAO's provisions affecting them. The argument could not be more misguided.

Plaintiffs here are not members of the general public complaining of some indefinite and indeterminable harm, such as the unconstitutional expenditure of their tax-dollars. Rather, Lozano and Espinal are direct targets of an ordinance they allege to be unconstitutional, complaining of what that ordinance would compel them to do. Thus, the appropriate comparison is not to taxpayers seeking invalidation of government expenditures, but to taxpayers seeking invalidation of taxes imposed on them. As the Supreme Court explained in Hein, 551 U.S. at 599, it is incontrovertible that taxpayers in this second category have standing: "[o]f course, a taxpayer has standing to challenge the collection of a specific tax assessment as unconstitutional; being forced to pay such a tax causes a real and immediate economic injury to the individual taxpayer."

Furthermore, Hazleton's insistence that these Plaintiffs lack standing because their injuries are widely-shared (at least among business entities in Hazleton) is misplaced. The fact that an injury is widely-shared is not the primary focus of the particularized inquiry. See Fed. Election Comm'n v. Akins, 524 U.S. 11, 23-24 (1998). As the Supreme Court explained in United States v. Students Challenging Regulatory Agency Procedures ("SCRAP"), 412 U.S. 669, 688 (1973), "[t]o deny standing to persons who are in fact injured simply because many others are also injured, would mean that the most injurious and widespread Government actions could be questioned by nobody. We cannot accept this conclusion." The question of particularity turns on the nature of the harm, not on the total number of persons affected.

Lozano and Espinal will not suffer in some "indefinite way in common with people generally" if the IIRAO is enforced. Frothingham, 262 U.S. at 488. Rather, they will be affected in a "personal and individual way" by what the IIRAO requires of them. Lujan, 504 U.S. at 561 n.1. Enforcement of the IIRAO would create coercive pressures compelling them to investigate the work authorization status of the prospective contractors they seek to hire. Additionally, they would be required to submit affidavits to Hazleton's Code Enforcement Office affirming that they do not knowingly utilize the services of "unlawful workers." Failure to comply with either directive could result in significant sanctions. These costly requirements, imposed directly and purposefully on these Plaintiffs, are a particularized injury-in-fact.

Hazleton also argues that even if the "cost of compliance" is a theoretically sufficient injury under Article III, these Plaintiffs fail to show that the cost of compliance with the IIRAO is greater than the cost of compliance with federal law. Thus, argues Hazleton, these Plaintiffs fail to show that there would be any actual cost of compliance with the IIRAO itself. Hazleton is mistaken. Federal law certainly does not require anyone to submit an affidavit to Hazleton's Code Enforcement Office. Though relatively small, that cost is sufficient for standing purposes. "[A]n identifiable trifle is enough for standing." See SCRAP, 412 U.S. at 689 n.14 (internal quotation marks omitted).

The IIRAO is also much broader than federal law, and coerces as well as incentivizes different behaviors. Lozano and Espinal testified that they only hire workers to perform discrete repair projects on their rental properties as needed. See J.A. 1116, 1122 (Lozano has "problems with [his] roof" and intends to hire "a contractor" to make repairs.); J.A. 1216, 1221 (Espinal intends to hire someone to do "plumbing" and "electrical" repairs as part of the ongoing renovations of his rental properties. He also anticipates hiring someone for tasks such as "shoveling snow."). Such workers would almost certainly be considered independent contractors under federal law. As we discuss in greater detail below, the federal requirement that employers verify the work authorization status of their employees does not apply to independent contractors. Thus, federal law would not require either Lozano or Espinal to determine such persons' work authorization status. In contrast, the IIRAO prohibits Plaintiff business owners from "permit[ting], dispatch[ing], or instruct[ing] any person who is an unlawful worker to perform work" (regardless of whether the person is an employee or an independent contractor), and thus compels them to verify the work authorization of any worker whose services they utilize. IIRAO § 4A; see also J.A. 1444. Therefore, we reject Hazleton's attempt to refute the standing of Lozano and Espinal by arguing that the IIRAO imposes no burdens beyond those imposed by federal law. It clearly does.

Lozano and Espinal have established that if the IIRAO is enforced, it will cause them particularized injury redressable by this court. Since the employment provisions of the IIRAO apply to independent contractors, Lozano and Espinal (and therefore the HHBA) have standing to challenge those provisions. However, it is much less clear whether the private cause of action applies to independent contractors, and we must separately evaluate whether Lozano or Espinal have standing to challenge that provision

2. Private Cause of Action

Unlike the other employment provisions of the IIRAO, which impose restrictions on a business entity not only when it "hire[s] for employment, or continue[s] to employ" an employee, but also whenever it "permit[s], dispatch[es], or instruct[s] any person . . . to perform work," IIRAO § 4A, the private cause of action on its face affords rights only to an "aggrieved employee." IIRAO § 4E (emphasis added). Under Section 4E of the IIRAO, it is an "unfair business practice" for a business entity to terminate "any employee who is not an unlawful worker" while it continues to employ an unlawful worker. Id. If it does so, the business entity is liable to the "aggrieved employee" for treble damages. Id. Whereas the rest of the IIRAO speaks of "workers," the section creating the private cause of action appears to inure solely to the benefit of "employees."

Lozano and Espinal have not testified that they currently employ anyone who would be considered an "employee," nor has either testified about any intent to do so. Moreover, even if they had -- or even if we were to construe this section as also inuring to the benefit of discharged independent contractors -- Lozano and Espinal have not testified that they have plans to hire more than one person, employee or contractor, at any one time, and the record is insufficient to support such a finding. Yet, the IIRAO's private cause of action arises only if at least two persons work for the same business entity at the same time. Additionally, unlike other provisions they testified about, Lozano and Espinal did not testify that they fear prosecution under the private cause of action provision or that they have any reason to fear such prosecution.

We realize, of course, that the threat of future prosecution can certainly be a sufficiently "imminent" injury to support Article III standing. See Pa. v. W. Va., 262 U.S. 553, 593 (1923) ("One does not have to await the consummation of threatened injury to obtain preventive relief."). However, that threat must be more than a possibility dependent on multiple contingencies that may never occur. See, e.g., Caribbean Marine Servs. Co. v. Baldrige, 844 F.2d 668, 675 (9th Cir. 1988) (explaining that fears of liability reliant on multiple contingencies do not give a plaintiff standing). Lozano and Espinal would be injured by Section 4E of the IIRAO only if they proceeded to hire multiple employees, terminated one while retaining another, and were sued by (or had reason to fear suit by) the terminated employee. This attenuated sequence of events is not even suggested by this record, and it is therefore too tenuous to support a conclusion that either has the requisite personal interest to establish a "case" or "controversy." Accordingly, we conclude that the district court lacked jurisdiction to consider the merits of these Plaintiffs' challenges to the IIRAO's private cause of action.

3. Housing Provisions

The housing provisions of the IIRAO prohibit the knowing or reckless harboring of "illegal aliens" (defined to include the knowing or reckless provision of rental housing); subject landlords who violate this prohibition to significant monetary sanctions; and invalidate any lease entered into by persons lacking lawful immigration status. The RO requires all persons over the age of eighteen who seek to live in rented property to obtain an occupancy permit; makes possession of documentation of lawful immigration status a requirement for receiving that permit; prohibits landlords from renting to persons who lack a permit; and subjects landlords who do so to suspension of their rental license and a concomitant prohibition on collecting rent from the dwelling units involved.

The district court held that Lozano, the HHBA (again on behalf of its member Espinal), and the Doe Plaintiffs have standing as landlords and tenants to challenge the housing provisions of the IIRAO and the RO.

a. Landlord Plaintiffs

The district court concluded that landlords Lozano and Espinal had suffered a constitutionally sufficient injury-in-fact because the housing provisions made it more difficult for them to rent apartments. The court also concluded they had standing because Hazleton's enforcement of the housing provisions would directly impose certain requirements on them, costing them both time and money. See Lozano, 496 F. Supp. 2d at 488-89. Hazleton contests the court's conclusions on several 44 grounds.

Hazleton first argues that the record fails to support the district court's finding that the housing provisions made it more difficult for Lozano and Espinal to rent their properties. According to Hazleton, the record reveals that the landlords had the same "mixed success" in renting apartments both before and after passage of the ordinances. Hazleton's Br. 23. Hazleton therefore claims that Lozano and Espinal have suffered no injury at all. We cannot agree.

The district court's finding that both Lozano and Espinal had more difficulty finding tenants for their properties following passage of the IIRAO and the RO is supported by the record, and certainly not clearly erroneous. Lozano testified that tenants who had been renting from him since he acquired his rental property in 2005 "ran away" upon learning about the ordinances in mid-2006. J.A. 1108. Lozano further testified that he has been able to find tenants only sporadically since then, and that at least one prospective tenant, who had been quite interested in an apartment, reacted with concern and quickly departed after Lozano informed him about the requirements of the IIRAO and the RO. J.A. 1111-12. Espinal similarly testified that he has had more difficulty in renting apartments since passage of the ordinances, and that on at least one occasion, he showed an apartment to potential tenants, who "were going to take [it]," but after telling these applicants about the ordinances, "they never called [him] back." J.A. 1215. The record therefore supports the district court's conclusion that Lozano and Espinal suffered sufficient injury to establish Article III standing.

Hazleton next argues that even if Lozano and Espinal did lose tenants and rental income because of these ordinances, such an injury is not "legally cognizable" because landlords have no right to rent to illegal aliens. Hazleton makes the rather hyperbolic metaphor of comparing these Plaintiffs to "drug dealers" asserting a claim to the proceeds of their unlawful activity. The City states: "[j]ust as a drug dealer has no legallycognizable interest in income derived from violations of federal drug laws, a landlord has no legally-cognizable interest in income derived from continuing violations of federal immigration law." Hazleton's Br. 24. Hazleton's comparison is as regrettable as it is unsound.

It is unfortunate that we must point out that there is no evidence in the record that the prospective tenants who chose not to rent from Plaintiffs were here unlawfully, as Hazleton's argument presumes. There are certainly other reasons why such invasive ordinances might dissuade a prospective tenant from renting in Hazleton. However, even if we were to assume that all deterred tenants were here unlawfully, we would still conclude that Plaintiffs assert an injury cognizable under the law.

By comparing landlords to persons who sell drugs in direct contravention of federal law, Hazleton distorts both the applicable law and the interests these Plaintiffs assert. Federal law simply does not prohibit landlords from renting (in the ordinary course of business) to persons who lack lawful immigration status. Nor does federal law directly prohibit persons lacking lawful status from renting apartments. As we discuss in further detail below, there is a federal prohibition against "harboring" of aliens lacking lawful presence. However, this prohibition is not nearly so broad as Hazleton's, and has never been held to apply to a landlord who does nothing more than rent to a tenant who happens to be here unlawfully. In light of these realities, we think the interest that these Plaintiffs assert is more appropriately characterized as an interest in continuing to operate their rental businesses consistent with the less costly mandates of federal law, and that is an interest which supports Article III standing.

Hazleton also argues that these Plaintiffs fail to establish that the IIRAO and the RO caused whatever injury they have suffered because actions of independent third-parties (the potential tenants) are responsible for that injury, not the ordinances themselves. Hazleton draws its argument from the discussion of causation in Lujan. There, the Supreme Court explained that when the "plaintiff is himself an object" of a challenged government action, "there is ordinarily little question that the action . . . has caused him injury, and that a judgment . . . will redress it." Lujan, 504 U.S. at 561-62. However, when a plaintiff's asserted injury arises from the government's allegedly unlawful regulation (or lack of regulation) of someone else, much more is needed. In that circumstance, causation and redressability ordinarily hinge on the response of the regulated (or regulable) third party to the government action or inaction -- and perhaps on the response of others as well. . . . Thus, when the plaintiff is not himself the object of the government action or inaction he challenges, standing is not precluded, but it is ordinarily substantially more difficult to establish.

Lujan, 504 U.S. at 562 (internal quotation marks omitted).

Hazleton contends that the landlord Plaintiffs cannot satisfy this higher burden.

In Pitt News v. Fisher, 215 F.3d 354 (3d Cir. 2000), we discussed when the regulation of a third-party "causes" a plaintiff's injury for the purposes of Article III. There, Pennsylvania had amended its Liquor Code to impose criminal sanctions on businesses that advertised alcoholic beverages in publications directed at educational institutions. The Pitt News, a student-run newspaper at the University of Pittsburgh, sued to enjoin enforcement of this amendment, and asserted standing based on the fact that its advertising revenues had suffered because of advertisers' compliance with the law. The district court held that "indirect economic effects resulting from a regulation aimed at third parties" were insufficient to give The Pitt News standing. Id. at 358.

In reversing that ruling, we explained that the advertisers would not have cancelled their contracts with The Pitt News were it not for the regulation. The fact that advertisers would cancel their contracts, thereby reducing advertising revenues, "was not only reasonably foreseeable when the Commonwealth decided to enact and enforce [the Act], it was the very goal of the statute." Id. at 361 (internal citation omitted). Accordingly, we concluded that the injury the newspaper suffered was "fairly traceable" to enforcement of the statute against its advertisers.

The situation in Pitt News is analogous to the situation here. The housing provisions of the IIRAO and the RO have already deterred certain renters from contracting for housing with Lozano and Espinal, and these ordinances will continue to deter other renters if they are enforced. This deterrence "was not only reasonably foreseeable" when Hazleton enacted these ordinances, it was Hazleton's "very goal." Id. The injuries Lozano and Espinal assert are a direct, predictable, and anticipated consequence of the regulation. Accordingly, their injuries are "fairly traceable" to the ordinances.

Moreover, Hazleton's argument ignores that Lozano and Espinal are not just directly impacted by the ordinances, but directly regulated as well. The housing provisions of the IIRAO and the RO regulate both tenants and landlords. Although the injury on which Hazleton focuses, the injury of lost rental income, is caused by the requirements imposed on tenants, the district court found, and we certainly agree, that these landlords would be equally injured by the requirements the IIRAO and the RO impose on them. Thus, even if we agreed with all of Hazleton's arguments thus far, we would still conclude that Lozano and Espinal have standing. The housing provisions of the IIRAO and the RO regulate the ability of landlords to contract with certain persons. They require landlords to explain the ordinances to all prospective renters and to examine those renters' occupancy permits. More generally, they compel landlords to act as local enforcers of immigration law in ways that far exceed their obligations under federal law. Compliance with these requirements elevates the cost of doing business as a landlord, and that alone gives them Article III standing.*fn17

b. Tenant Plaintiffs

Because "[t]he loss (or imminent loss) of one's apartment and the inability to rent a new one is certainly an actual and concrete injury," caused by the ordinances and redressable by the court, the district court concluded that the Doe Plaintiffs, who lack lawful immigration status, also have standing to challenge the housing provisions of the IIRAO and the RO. Lozano, 496 F. Supp. 2d at 497-98.

Hazleton first argues that the district court erred in finding that John Does 3 and 7 and Jane Doe 5 face imminent injury. According to Hazleton, their fears of eviction are merely conjectural because "none of them have been evicted or have received any threat or warning that they might be ...


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