Gov. Jan Brewer was in Washington on Wednesday for the U.S. Supreme Court hearing on Arizona's 2007 law imposing penalties on employers who hire illegal immigrants. The justices are weighing the issue. SUSAN WALSH / THE ASSOCIATED PRESS

WASHINGTON - The justices of the nation's high court took shots Wednesday at contentions by the Obama administration and the business community that Arizona cannot punish companies for violating a state immigration law.

Justice Antonin Scalia acknowledged that a 1986 federal law took federal control of immigration matters. And it bars states from imposing their own civil and criminal penalties.

But Scalia pointed out that the law specifically permits states to deal with the hiring of illegal immigrants through their own "licensing and similar laws."

Here, Scalia said, the sole penalty that can be imposed by the 2007 Legal Arizona Workers Act is for a judge to suspend or revoke any and all state licenses of firms found guilty of knowingly or intentionally hiring illegal immigrants. Scalia said that would appear to fit within what Congress had intended.

But Carter Phillips, representing the U.S. Chamber of Commerce, argued that the Arizona law does more than go after what are traditionally seen as state-issued business licenses. It allows a state judge to revoke a company's articles of incorporation.

"You essentially have a death penalty to the business - that is (to) completely eliminate the business's right to exist," he said.

Phillips contended that even if those punishments do fit the definition of a "license," the federal Immigration Reform and Control Act lets states impose penalties only after a company is found guilty by a federal hearing officer, in a federal tribunal, of breaking federal law. Phillips said the Arizona law lets state judges decide.

Scalia, however, said the hole in his argument is that companies be "convicted by a federal government that hasn't gone after many convictions." And as Phillips tried to respond, the justice added, "That's the whole problem."

Acting U.S. Solicitor General Neal Katyal, arguing for the Obama administration, which also is challenging the law, told the justices that Congress wanted a single, comprehensive plan for dealing with employers that hire illegal immigrants. "What Arizona does here is what 40,000 different localities can do if this law is upheld," he said, adding that each state - and each city and county - would be free to enact its own rules.

But that may be exactly what Congress intended by including the "licensing" exemption in the 1986 law, Chief Justice John Roberts responded.

Justice Stephen Breyer said federal immigration law is balanced both to punish companies that knowingly hire illegal immigrants as well as firms that discriminate against people who simply look like they are in the U.S. illegally. By contrast, he said, the Arizona law has no such balance.

"If you hire an illegal immigrant, your business is dead," he told state Solicitor General Mary O'Grady.

"How can you reconcile that intent (in federal law) to prevent discrimination?" Roberts asked. "If you are a businessman, every incentive under that (Arizona) law is to call close questions against hiring this person," the justice said. "Under the federal law, every incentive is to look at it carefully."

O'Grady said there are protections for employers under the Arizona law, including giving employers who check the status of new workers through the federal government's online E-Verify system a "rebuttable presumption" they did not break the law.

Sen. Russell Pearce, R-Mesa, who crafted the law, said it is not a one-sided measure. "We have many laws that prohibit discrimination," he said outside the courthouse. Anyway, Pearce said, no company can be put out of business unless a state judge concludes that it knowingly or intentionally hired an illegal immigrant.

Pearce also said hiring illegal immigrants is already against federal law. He said this measure ensures that Arizona employers follow the law. "A novel idea, I understand," he continued.

Gov. Jan Brewer, who also attended Wednesday's hearing, said Scalia got it right in noting the absence of federal action. "The bottom line is that we believe that if the (federal) government isn't going to do the job, then Arizona is going to do the job," she said. "We are faced with a crisis."

Only eight justices participated; Elena Kagan had recused herself because of her prior position as U.S. solicitor general. That creates the possibility of a 4-4 tie - a tie that would go to the state, because it would uphold an earlier ruling by the 9th U.S. Circuit Court of Appeals finding the measure legal.