A dog sniff inspection can be helpful in investigations because trained dogs are sensitive to smells and can identify suspicious objects more easily than humans. Whether a dog sniff inspection constitutes a search or seizure under the Fourth Amendment depends on whether there is a reasonable expectation of privacy intruded by the inspection.
The Supreme Court case which held sections 3, 5(C), and 6 of Arizona’s Support Our Law Enforcement and Safe Neighborhoods Act (S.B. 1070) were preempted by federal law, but that section 2(B) must be allowed to be construed in practice before deciding whether the provision should be enjoined. (Read the opinion here).
The Court held in Waters-Pierce Oil Co. v. Texas, 212 U.S. 86 (1909), that States, through their police powers, have the authority to punish crimes; The Supreme Court can only interfere with state legislation if fines are grossly excessive.
Full case name: National Federation of Independent Business, et al. v. Sebelius, Secretary of Health and Human Services, et al. (2012)