From the NY Times:

The Supreme Court ruled unanimously on Monday that the federal government has been going too far in using identity-theft laws to prosecute undocumented workers who use fake identification to get and hold jobs.

In limiting the use of a law enacted in 2004 that has become a favorite weapon of the authorities who go after illegal immigrants, the justices said that to use it, a prosecutor must be able to show that a defendant knew that the identification he used actually belonged to another person.

The ruling in Flores-Figueroa v. United States, No. 08-108, was written by Justice Stephen G. Breyer and relied heavily on the wording of the statute, specifically its language regarding when a defendant can be properly accused of “knowingly” and unlawfully using another person’s identification.

“As a matter of ordinary English grammar, it seems natural to read the statute’s word ‘knowingly’ as applying to all the subsequently listed elements of the crime,” Justice Breyer wrote, going on to discuss transitive verbs, their objects and the appropriate placement of adverbs.

The decision was 9-0, a resounding defeat for Immigration and Customs Enforcement.

In a number of high profile work site raids over the past few years, DHS has used or threatened to use identify theft in order to criminally prosecute illegally present workers as opposed to the traditionally used deportation process.

I don't think identity theft prosecutions are going to end. In fact, one of the consequences of the expansion of E-Verify and the eventual publication of a social security no-match rule is that there will be MORE pressure to engage in identity theft. If workers find that merely providing a bogus social security number and a bogus identification document are not enough to get through the verification system, then it is more likely the worker will try and get a name and a number that actually match and assume that identity. E-Verify and the no-match rule won't necessarily catch these kinds of cases.

The case requires a showing that an employee had actual knowledge that the identity was stolen and in a case, for example, where a person assumes both a false name and a false social security number, prosecutors may still seek criminal charges, especially if they have evidence to independently support the claim that the worker knew.

But cases like Postville where employees quickly pleaded guilty to criminal identity theft charges based on little more than the evidence that the worker used a false document are going to be less likely in the future.

[UPDATE: Here is the actual case]