A coalition of business and civil liberties groups, supported by the Obama administration, says the law should be struck down because it conflicts with federal immigration policy.
The questioning on Wednesday suggested that the challengers face an uphill battle in trying to capture the five votes they need to prevail. Justice Elena Kagan, who had worked on the case as United States solicitor general, was disqualified, and so only eight justices heard the case.
The argument was simultaneously a policy debate and an extended exegesis of a crucial phrase in a 1986 federal law that regulates the hiring procedures.
The debate, primarily between Justices Antonin Scalia and Stephen G. Breyer, concerned dueling conceptions of the role that federal and state governments should play in enforcing immigration laws.
The question in the case was whether Arizona was entitled to supplement the penalties in the 1986 law with much tougher ones.
Justice Scalia said the state law was a necessary response to federal inaction.
“Arizona and other states are in serious trouble financially and for other reasons because of unrestrained immigration,” he said. “I agree this step is massive, and one wouldn’t have expected it to occur under this statute. But expectations change when the federal government has simply not enforced the immigration restrictions.”
Justice Breyer, on the other hand, said the federal law had struck a careful balance between enforcing immigration laws and avoiding employment discrimination, a balance the Arizona law could undermine.
“How can you reconcile that intent to prevent discrimination against people because of their appearance or accent?” he asked. “How do you reconcile that with Arizona’s law?
“If you are a businessman, every incentive under that law is to call close questions against hiring this person,” he said. “Under the federal law every incentive is to look at it carefully.”
The 1986 law, the Immigration Reform and Control Act, said it overrode “any state or local law imposing civil or criminal sanctions.”
That would ordinarily be the end of the matter under the Constitution’s supremacy clause, which makes federal law the supreme law of the land.
But the 1986 law made one exception. States could continue to regulate businesses, the law said, through “licensing and similar laws.”
Much of the argument concerned the proper interpretation of that phrase.
Neal K. Katyal, the acting United States solicitor general, distinguished between the criteria used to issue licenses from those used to revoke them. That appeared to strike several justices as a formal and empty distinction.
“It doesn’t make much sense to me,” Justice Sonia Sotomayor said.
Chief Justice John G. Roberts repeatedly suggested, moreover, that the last three words of the phrase “licensing and similar laws” provided Arizona with yet more leeway.
Carter G. Phillips, a lawyer for the U.S. Chamber of Commerce, which challenged the law along with other groups, said the very magnitude of the penalties under the state law demonstrated the conflict with the federal one.
Under the Arizona law, “you can essentially have the death penalty to the business,” Mr. Phillips said. “And on the other side of the scale, $250 fine.”
Justice Breyer seemed to agree. Whatever else may be said about the two laws, he said, “we are still stuck with this enormous discrepancy in penalty.”
Justice Ruth Bader Ginsburg asked a lawyer for the state about “the anomaly that Arizona cannot impose a fine even in a modest amount, but it can revoke someone’s license to do business.”
Mary R. O’Grady, Arizona’s solicitor general, said the distinction flowed from “the structure that Congress established.”
Justice Anthony M. Kennedy’s vote would most likely have been decisive had nine justices heard the case. With an eight-member court, his vote seemed necessary but not sufficient for a victory for the challengers, and it was in any event hard to tell which way he was leaning.
He told Mr. Phillips that he saw “no limitation on what the states can decide is a license.”
But Justice Kennedy objected to a second part of the Arizona law, this one requiring employers to use an otherwise voluntary electronic federal system meant to verify employment status known as E-Verify.
“It seems to me that’s almost a classic example of a state doing something that is inconsistent with a federal requirement,” he said.
Should the justices end up divided 4-to-4, the appeals court ruling that upheld the Arizona law would be automatically affirmed without an opinion from the Supreme Court.