Many countries face the problem of the population's preferences varying greatly from region to region. Federalism is often praised as the ideal solution for how a community should deal with this heterogeneity. However, a dark side of this institutional arrangement is the unequal treatment of people with a migratory background in local administrations and regional courts. The paper presents a theoretical framework to explain how the local anti-immigration mood and other extra-legal factors contribute to the discriminatory decisions of administrators and judges within a federal context. Integrating classical theories of discrimination and the literature on illiberal beliefs, I argue that decision-makers exposed to anti-migration attitudes, consciously or unconsciously, adopt the preferences of their informal regional peers. Novel datasets linking the asylum determination decisions by the offices of the German Office for Migration and Refugees (BAMF) spread out over the country to the 48 administrative courts that make the final decision on an asylum request allow me to test these conjectures. The preliminary evidence reveals that courts can reduce the discriminatory behavior of federal agents who operate in anti-migration environments.