By Jonathan Stempel

(Reuters) - A federal appeals court on Monday lifted a court order blocking Maricopa County Sheriff Joe Arpaio's use of workplace raids to enforce Arizona laws that make it a crime for illegal immigrants to use stolen identities to obtain work.

The 9th U.S. Circuit Court of Appeals in San Francisco said a lower court judge was wrong to conclude that two Arizona identity theft laws were likely unconstitutional on their face, justifying a preliminary injunction against their enforcement by Arpaio and Maricopa County Attorney Bill Montgomery.

Since 2008, the controversial workplace raids have led to the arrests of more than 700 undocumented workers for identity theft, raising their likelihood of being deported.

The raids were a signature initiative for Arpaio, who calls himself "America's toughest sheriff" and believes the U.S. government does not do enough to combat illegal immigration.

He nonetheless had been planning to disband the unit that conducted the raids when the January 2015 injunction was issued, following earlier legal setbacks.

"I have not yet decided when or if to resurrect identity theft enforcement," Arpaio said in a statement on Monday, citing his settlement with the U.S. Department of Justice, which had accused him and his deputies of various civil rights violations.

In issuing the injunction, U.S. District Judge David Campbell in Phoenix agreed with Puente Arizona, an immigrant rights advocacy group, and others that the state's identity theft laws were likely invalid because federal law preempted them.

But in Monday's 3-0 decision, Circuit Judge Richard Tallman said the Arizona laws also targeted workplace fraud that had nothing to do with immigration and applied equally to U.S. citizens and legal immigrants, as well as illegal immigrants.

"Just because some applications of those laws implicate federal immigration priorities does not mean that the statute as a whole should be struck down," Tallman wrote.

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The appeals court ordered Campbell to evaluate the plaintiffs' remaining claims, including whether the Arizona laws are preempted when used to target illegal immigrants.

Jessica Vosburgh, a lawyer representing opponents of the laws, said her clients disagreed with the decision and may ask a larger Ninth Circuit panel to review it.

In a statement, Montgomery said he believed the Arizona laws were "fairly applied" and were not preempted, saying he looked forward to making that case at trial.

Arizona Attorney General Mark Brnovich, who defended the state laws, did not immediately respond to requests for comment.

The case is Puente Arizona et al v. Arpaio et al, 9th U.S. Circuit Court of Appeals, No. 15-15211.





(Reporting by Jonathan Stempel in New York; Additional reporting by David Schwartz; Editing by Alan Crosby and Dan Grebler)