On February 2, 2010, the U.S. Court of Appeals for the Tenth Circuit upheld a District Court determination that the mandatory E-Verify provisions of The Oklahoma Taxpayer and Citizen Protection Act of 2007 (the "Act") were pre-empted by federal immigration laws.

At issue were Sections 7(B), 7(C) and 9 of the Act, which provided a financial penalty for violations. The Tenth Circuit agreed that these provisions of the Act contained a cause of action that was contrary to, and, thus, not authorized by, federal law, and that the financial penalties on employers in the Act for failure to utilize E-Verify amounted to a punitive tax that also was precluded by federal immigration laws. The Tenth Circuit was unable to decide whether the state could compel companies contracting with the state to utilize E-Verify but refused to lift the portion of the lower court's injunction that prohibited the Oklahoma Attorney General from enforcing that provision. For now, E-Verify remains a voluntary program in the State of Oklahoma