The law also requires employers to check the status of would-be hires using E-Verify, a flawed federal electronic verification program that Congress has repeatedly declined to make mandatory. The ACLU's lawsuit charges that Fremont’s law is at odds with the clear constitutional mandate imposing a uniform federal immigration enforcement system and has a discriminatory effect on those who look or sound "foreign." After the ACLU filed suit, the City Council resolved to suspend enforcement of the Ordinance pending the outcome of the district court litigation.
On February 20, 2012, the district court issued a decision permanently enjoining provisions in the Ordinance that prohibit landlords from "harboring" unlawfully present immigrants, and that require that the City revoke the rental licenses of any tenant verified by the federal government to be unlawfully present in the United States. The district court allowed the remainder of the Ordinance to stand, including the E-Verify mandate, and both sides appealed parts of the district court’s decision to the Eighth Circuit Court of Appeals. The Fremont City Council voted to continue the suspension of the Ordinance's housing provisions during the course of the appeals, but permitted the E-Verify mandate to go into effect.
June 28, 2013 a divided panel of the Eighth Circuit issued a decision upholding the ordinance and concluding that it is not preempted by federal immigration law. The three-judge panel issued three separate opinions, including a strong dissenting opinion by Judge Myron Bright. As Judge Bright's dissent points out, the panel's decision conflicts with decisions of every other federal court to consider preemption of a state or local prohibition on harboring and housing of unlawfully present immigrants, and is inconsistent with Supreme Court precedent. The ACLU will continue to challenge this discriminatory law and plans to pursue a petition asking the Eighth Circuit to rehear the case.