PHOENIX (Reuters) – Arizona on Thursday filed a lawsuit against the federal government, alleging that Washington has failed to secure the state's porous border with Mexico.

Gov. Jan Brewer and state Attorney General Tom Horne, both Republicans, told a news conference that they filed a counter suit against the government in federal court in Phoenix.

The suit is in response to a government lawsuit last year blocking key parts of the state's tough law cracking down on illegal immigrants.

"Because the federal government has failed to protect the citizens ... of Arizona, I am left with no other choice," Brewer told reporters at a news conference in central Phoenix, as several boisterous protesters attempted to shout her down.

"We did not want this fight. We did not start this fight. But, now that we are in it, Arizona will not rest until our border is secured and federal immigration laws are enforced," she added.

The desert state straddles a furiously trafficked corridor for human and drug smugglers from Mexico, and is the principal gateway for illegal immigrants entering the United States.

In Washington, a spokesman for the U.S. Department of Homeland Security dismissed the suit as a "meritless court claim" that "does nothing to secure the border."

"Smart strategies, dedicated law enforcement personnel, and strategic partnerships with state, local, and tribal governments and agencies do," spokesman Matt Chandler said.

'RAMPANT ILLEGAL IMMIGRATION'

The suit detailed five separate counts, including allegations that the government had failed to achieve "operational control" over the border, enforce immigration laws, and protect Arizona from "harms associated with rampant illegal immigration."

Brewer locked horns with the federal government last April, when she signed the state's controversial measure cracking down on illegal immigrants into law.

It provoked protests in Arizona and around the country, although opinion polls showed that a majority of Americans supported the law,

At the heart of the state law is the requirement that police determine the immigration status of a person they have detained and suspect of being in the country illegally.

But before it could take effect last July, U.S. District Court Judge Susan Bolton blocked key parts of the state law, arguing immigration matters are the federal government's responsibility.

In November, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit heard arguments in the case. It has yet to issue a ruling.

Brewer said the state would most likely have to pursue its claims all the way to the U.S. Supreme Court.

She added that legal costs were covered by donations from thousands of Americans, and that no state taxpayer funds had been spent in defending the law.

(Writing by Tim Gaynor; additional reporting by Jeremy Pelofsky in Washington; editing by Greg McCune)

LOS ANGELES (Reuters) – Fast-growing burrito chain Chipotle Mexican Grill Inc said on Thursday it was too early to tell if it would change its hiring practices after a federal immigration crackdown forced it to fire hundreds of employees in Minnesota.

But as the company faces a widening probe into restaurants in Virginia and Washington D.C., executives said they are trying to head off the kind of disruption that occurred in Minnesota, where new hiring and training added 20 percent to 30 percent in restaurant crew hours.

"This has not been an easy process for anyone involved," co-Chief Executive Monty Moran told analysts on a fourth-quarter earnings call. "But we're navigating our way through it, and we're learning as much as we can so that we can avoid this sort of disruption in the future."

Analysts' scrutiny of the immigration probe was one of the few critical notes in an otherwise stellar day for Denver-based Chipotle, which reported strong quarterly results that sent shares up 7 percent.

The company -- whose motto is "Food with Integrity" -- is one of the most high profile employers to come under the scrutiny of Immigration and Customs Enforcement (ICE) since the agency shifted its focus two years ago to probing employers' hiring rather than snaring workers in surprise workplace raids.

The investigation into Chipotle is also serving as a wake-up call to the restaurant industry, which relies on immigrant labor for around one-quarter of its work force.

Moran assured analysts that his company has a strict policy against hiring employees who are not authorized to work in the United States. He said it has professionals review documents to detect forgeries and train managers to examine them at the store level.

Moran said he wants to "use the Minnesota situation to get better" as the company plans to add 135 to 145 new stores to its 1,100 restaurants across the United States.

"This is a new situation for us -- to find out that there were a significant number of undocumented workers in Minnesota," said Moran. "And we're working with ICE and with a number of experts and professionals to make sure the disruption that occurred there is not something that takes place in the future for Chipotle."

NEW YORK, Feb 10 (Reuters Legal) – Retail stores may not ask a customer to provide a zip code in the course of a credit card transaction, the California Supreme Court ruled on Thursday.

The decision, which has implications for all retailers doing business in California, arose in a class action suit against Williams-Sonoma. Plaintiff Jessica Pineda alleged that the housewares company used customer zip codes to obtain the home addresses of "hundreds of thousands, if not millions" of customers and then used the data for marketing or sold the information to other businesses.

Pineda said the practice breached her right to privacy under the California Constitution and violated the Song-Beverly Credit Card Act of 1971, which prohibits retailers from recording a customer's "personal identification information" in a credit card transaction. Each violation carries a civil penalty of up to $1,000.

In its 15-page, unanimous decision, the California Supreme Court ruled that the act was designed to promote consumer protection and that personal identification information includes a cardholder's zip code. Any other result, the court wrote, would be an "end run" around the statute's clear purpose. The ruling reversed two lower courts and rejected an argument by Williams-Sonoma that the statute was unconstitutionally vague. The ruling also allowed the decision to be applied retroactively to past customer transactions.

"People don't understand they're giving information on their addresses," said Gene Stonebarger, a lawyer for Pineda who presented oral arguments before the Supreme Court in January. "They believe they need to provide the zip code to process the transaction, similar to what they do at a gas station." Gas stations, however, do not store zip codes after a transaction has been approved.

SIMILAR LAWSUITS

Williams-Sonoma had argued that the law was never intended as sweeping privacy legislation to prevent a retailer from using legal means to send catalogues to its customers. Even without zip codes, a business could still use other ways to track down customer addresses, such as a phone book or electronic database, the company said.

Craig Cardon, who represented Williams-Sonoma, declined to comment on the court's decision.

Retailers doing business in California, including Polo Ralph Lauren and Pottery Barn, a unit of Williams-Sonoma, have faced a number of similar lawsuits. Most recently, in a 2008 case against Party City, the California 4th District Court of Appeals ruled that zip codes were too general to fall under the law's ban.

Donna Wilson, an attorney who has defended multiple retailers in these cases, said the Williams-Sonoma decision was "about as broad a decision as could have been issued" and raises the question of how retailers can maintain contact with their customers without risking a violation of the law. Applying it retroactively, she said, exposes retailers to liability even though they relied on lower court opinions that blessed the practice of zip-code gathering.

David Faustman, who represented Party City in the previous case, said this kind of litigation has caused retailers to reconsider doing business in California.

It was not immediately clear whether the ruling would have an impact beyond California. The Song-Beverly act was modeled after a similar statute in New York, and other states including Delaware, Kansas, Maryland, Massachusetts, Nevada and Rhode Island have similar laws. None of those states prohibit the collection of zip codes, Williams-Sonoma argued in its brief.

(Reporting by Terry Baynes of Reuters Legal; Editing by Amy Singer)