**FILE** Workers pick lettuce in Salinas, Calif., in this June 4, 2007 file photo. The number of newly laid off people signing up for jobless benefits went up modestly last week, although the latest figures suggest employment conditions around the country remain good. The Labor Department reported Thursday, Aug. 2, 2007 that new applications filed for unemployment insurance rose by a seasonally adjusted 4,000 to 307,000 for the week ending July 28. That was a better showing than economists expected; they were forecasting claims to rise to 310,000. (AP Photo/Paul Sakuma, file)
The U.S. Supreme Court paved the way Thursday for states to have a greater role in developing their own immigration policies.
By a 5-3 vote, the Supreme Court upheld an Arizona law that penalizes businesses for hiring workers who are in the United States illegally, rejecting arguments that states have no role in immigration matters.
The court said that federal immigration law gives states the authority to impose sanctions on employers who hire unauthorized workers.
The ruling cheered supporters of tougher immigration laws who said it would encourage states to take new steps, especially in the employment area.
The decision upholding the validity of the 2007 law comes as the state is appealing a ruling that blocked key components of a second, more controversial Arizona immigration enforcement law.
Thursday's decision applies only to business licenses and does not signal how the high court might rule if the other law comes before it.
Still, the ruling placed the court's five Republican appointed justices on the side of the state, and against the Chamber of Commerce, which challenged the law along with the American Civil Liberties Union.
Chief Justice John Roberts, writing for the majority, said Arizona's employer sanctions law "falls well within the confines of the authority Congress chose to leave to the states."
Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor, all Democratic appointees, dissented. The fourth Democratic appointee, Justice Elena Kagan, did not participate in the case because she worked on it while serving as President Barack Obama's solicitor general
Breyer said the Arizona law upsets a balance in federal law between dissuading employers from hiring illegal workers and ensuring that people are not discriminated against because they may speak with an accent or look like they might be immigrants.
Employers "will hesitate to hire those they fear will turn out to lack the right to work in the United States," he said.
The Obama administration backed the challenge to the law. The measure was signed into law in 2007 by Democrat Janet Napolitano, then the governor of Arizona and now Obama's Homeland Security secretary.
The employer sanctions law has been only infrequently used. It was intended to diminish Arizona's role as the nation's hub for immigrant smuggling by requiring employers to verify the eligibility of new workers through a federal database known as E-Verify. Employers found to have violated the law can have their business licenses suspended or revoked.
Rep. Lamar Smith, R-Texas, chairman of the House Judiciary Committee, praised the high court's decision.
"Not only is this law constitutional, it is commonsense. American jobs should be preserved for Americans and legal workers," Smith said. "Today, there are seven million individuals working in the United States illegally. E-Verify will help turn off the jobs magnet that encourages illegal immigration."
Smith added that he planned to introduce legislation in the near future to expand E-Verify and "make it mandatory across the United States."
Lower courts, including the San Francisco-based 9th U.S. Circuit Court of Appeals, previously upheld the law.
Last month, a three-judge panel of that same appeals court upheld a trial judge's ruling blocking enforcement of parts of the broader Arizona immigration law, known as SB1070. The provisions that were blocked include a requirement that police, while enforcing other laws, must question a person's immigration status if officers have reasonable suspicion the person was in the country illegally. State officials have said they will appeal the ruling to the Supreme Court.
The ACLU's Cecillia Wang said the Supreme Court decision was disappointing, but narrow.
"The decision has nothing to do with SB1070 or any other state and local immigration laws," said Wang, director of ACLU's immigrant rights project.
But Jay Sekulow, chief counsel of the conservative American Center for Law and Justice, said the ruling should encourage states to play a larger role in immigration matters.
"While it's not a definitive answer to the main Arizona case, it certainly is a helpful sign from our perspective," Sekulow said.
He filed a brief in support of the law that was upheld Thursday. The case is Chamber of Commerce v. Whiting, 09-115.
The Associated Press contributed to this report.
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