Showdown Over Arizona Immigration Law Reaches Federal Appeals Court

VIDEO: Barbra Pinto talks to illegal immigrant and supporters of the controversial
WATCH Both Sides React to Arizona Immigration Verdict

Lawyers for Arizona Gov. Jan Brewer and the U.S. Justice Department faced off before a panel of federal appeals court judges in San Francisco today over the fate of Arizona's controversial immigration law.

Key parts of the law, known as SB 1070, including a provision that would allow police to arrest and detain suspected illegal immigrants based on "reasonable suspicion," were ruled unconstitutional by District Court Judge Susan Bolton in July and blocked from taking effect.

The three-judge panel now will decide whether all or parts of the law should be reinstated or struck down. The case ultimately could reach the U.S. Supreme Court.

Lawyers for the U.S. Justice Department, which brought the case against Arizona in July, have argued the law violates the supremacy clause of the Constitution.

In her ruling, Judge Bolton agreed, ruling that enforcement of the most contentious provisions of the law would preempt the federal government's exclusive authority to set and implement a national immigration policy.

But Brewer's legal team contends Bolton made "serious errors" in her decision. They argue that the law is essential for Arizona to combat consequences of illegal immigration, which the federal government has curtailed inadequately.

"Congress has repeatedly encouraged cooperation and assistance from state and local authorities in enforcing federal immigration law," attorney John Bouma wrote in the governor's appellate brief. "And it is Congress -- not DHS [Department of Homeland Security] -- that controls whether SB 1070 is preempted."

Some parts of the law have taken effect, including criminalizing state officials interfering with or refraining from enforcement of federal immigration laws. It is also illegal to pick up and transport day laborers across the state, or to give a ride to or harbor an illegal alien. A vehicle used to transport an illegal alien can be impounded.

"The court by no means disregards Arizona's interests in controlling illegal immigration and addressing the concurrent problems with crime, including the trafficking of humans, drugs, guns and money," Bolton wrote in her decision. But the court "finds that preserving the status quo through a preliminary injunction is less harmful than allowing state laws that are likely preempted by federal law to be enforced."

Immigrant advocates and civil rights groups, several major city governments including Seattle and San Francisco, and governments of nearly a dozen Latin American countries have filed friend-of-the-court briefs in opposition to the law.

Eleven states, a group of 80 conservative U.S. House lawmakers and a coalition of border-region sheriffs have sided with Arizona in legal briefs supporting the law.

"I am steadfast in my belief that states have the sovereign right to enforce immigration laws consistent with federal immigration laws," Brewer said in a statement. "The overwhelming support that the state of Arizona and I have received from across America in this fight with the federal government to reestablish the rule of law in Arizona has been truly gratifying."

The independent fund established by Brewer to finance legal defense of the law has collected more than $3 million from tens of thousands of donors across the U.S., according to the Arizona Republic. Brewer has reported spending more than $1 million on legal fees defending SB 1070 so far.

Arizona Immigration Law Colors 2010 Campaign

Meanwhile, Arizona's law has sparked efforts in more than a dozen states to pass similar measures and propelled immigration into the spotlight during the 2010 campaign.

Candidates in races across the country have been forced to take sides on the debate, with the issue playing a particularly prominent role in gubernatorial races in states with the highest concentrations of illegal immigrants.

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In Florida, Democratic gubernatorial candidate Alex Sink promised to veto a proposed immigration law similar to Arizona's if it were to pass, while Republican Rick Scott has offered a conditional endorsement.

California Republican Meg Whitman, who's faced intense scrutiny for having employed an undocumented worker, has said she opposes an SB 1070-like law in her state but has tried to push a tough line on illegal immigration.

Nikki Haley, Republican gubernatorial candidate in South Carolina and daughter of Indian immigrants, has promised to enact an "Arizona-style" immigration law if she's elected. Her opponent, Vincent Sheheen, says he would not.

In New York, Republican gubernatorial candidate Carl Paladino has said he supports Arizona's right to impose a strict immigration law and would direct state law enforcement to crack down on illegal immigrants. His Democratic opponent, Andrew Cuomo, opposes such measures.

Brewer, a Republican who is up for re-election on Nov. 2, has been leading her Democratic opponent, state Attorney General Terry Goddard in polls. Goddard opposes SB 1070.

Sixty percent of Americans support the Arizona law, according to the most recent ABC News/Washington Post poll. But fewer -- 46 percent -- think the states should have power to make and enforce their own immigration laws, one criticism of the Arizona statute.

More stories from ABC News' special series "Out of the Shadows: Illegal Immigration in America"