The GEO Group, Inc. v. Menocal

LII note: The U.S Supreme Court has now decided The GEO Group, Inc. v. Menocal

    Issues

    Can a government contractor immediately appeal a denied claim for “derivative sovereign immunity” under the collateral-order doctrine?

    Oral argument:
    November 10, 2025
    Court below:
    United States Court of Appeals for the Tenth Circuit

    Menocal and other detainees (“Menocal”) filed a class action against GEO Group, Inc. (“GEO”), alleging forced labor and unjust enrichment. GEO argues it is shielded from suit because, under the Yearsley doctrine, a contractor has immunity for actions performed at the government’s direction. GEO further contends that the lower courts’ denials of these claims are immediately appealable under the collateral-order doctrine. Menocal asserts that the Yearsley doctrine does not provide immunity from suit, only a defense, and that the lower court’s denial is not immediately appealable. The outcome of this case implicates the right to bring a suit against government contractors and will impact public welfare.

    Questions as Framed for the Court by the Parties

    Whether an order denying a government contractor’s claim of derivative sovereign immunity is immediately appealable under the collateral-order doctrine.

    Facts

    The GEO Group, Inc. (“GEO”) operates the Aurora Immigration Processing Center (“AIPC”) under a contract with the U.S. Immigration and Customs Enforcement (“ICE”).  Alejandro Menocal was a detainee at AIPC in Aurora, Colorado, from June 2014 to September 2014.  During his detention, Menocal participated in the facility’s mandatory sanitation program—required by GEO’s Housing Unit Sanitation Policy—and the Voluntary Work Program. The Sanitation Policy required detainees to clean various common areas. A refusal to comply resulted in disciplinary actions, up to and including solitary confinement. As part of GEO’s Voluntary Work Program at AIPC, detainees could perform various jobs for a maximum of eight hours daily, or forty hours weekly, and received $1.00 per day as compensation.

    On October 22, 2014, Menocal and other plaintiffs (“Menocal”) initiated a class action lawsuit against GEO. Menocal asserted claims of forced labor under the Trafficking Victims Protection Act (“TVPA”), 18 U.S.C. § 1589, arising from the Sanitation Policy, and unjust enrichment under Colorado common law, arising from the Voluntary Work Program. The district court certified a class for each claim. GEO appealed the class certifications, but the Tenth Circuit affirmed the district court’s decision.

    Generally, the doctrine of sovereign immunity grants local and federal government entities an exemption from lawsuits or tort liability arising from their own activities. GEO claimed this immunity under the Yearsley doctrine, which GEO argued applied immunity to parties like government contractors when they have acted at the constitutional direction of the government. Menocal moved for summary judgment on GEO’s claim of “derivative sovereign immunity.” Menocal argued that because GEO was not required to maintain the Sanitation Policy or the Voluntary Work Program under its contracts with ICE, GEO could not assert derivative sovereign immunity under the Yearsley doctrine. The district court granted Menocal’s motion for summary judgment, concluding that ICE neither directed nor required GEO to (1) compel detainees’ labor as part of the Sanitation Policy, nor (2) only compensate Voluntary Work Program participants $1.00 per day.

    GEO filed a timely notice of appeal to challenge this interlocutory order and argued against the lower court’s denial of derivative sovereign immunity. However, the Tenth Circuit dismissed GEO’s appeal for lack of appellate jurisdiction. The Court held that the lower court’s decision could not be reviewed under the collateral-order doctrine. The collateral-order doctrine only allows for the immediate appeal of interlocutory orders if they meet three criteria: the order being appealed must (1) conclusively determine an important disputed question, (2) resolve an important issue separate from the merits, and (3) if not reviewed on interlocutory appeal, be effectively unreviewable from a final judgment. The circuit court reasoned that GEO failed on the second criterion: the issue GEO was appealing, the application of the Yearsley doctrine, could not be separated from Menocal’s claims against GEO.

    GEO petitioned the United States Supreme Court for a writ of certiorari, seeking review of the Tenth Circuit’s dismissal for lack of jurisdiction.  The Supreme Court granted certiorari on June 2, 2025, on the question of whether a government contractor’s claim of derivative sovereign immunity qualifies for immediate appeal under the collateral-order doctrine.

    Analysis

    SCOPE OF SOVEREIGN IMMUNITY

    The GEO Group, Inc. (“GEO”) contends that government contractors should be treated similarly to government officials in terms of legal immunity. GEO asserts that, historically, the common law does not recognize a difference between government officials and private individuals, such as government contractors, who act at the direction of the government. Thus, GEO claims that because government officials are entitled to various immunities from suits, a similar immunity extends to contractors who act at the direction of the government. According to GEO, Yearsley v. W.A. Ross Construction Co. established the framework of the conditional form of immunity available to government contractors. GEO acknowledges that the Court does not provide government contractors with the same unconditional immunity or “embracive immunity” as it provides government officials. GEO claims that, under the Yearsley doctrine, courts may grant derivative sovereign immunity when a contractor acts according to government instruction, provided that the instruction is within Congress’s constitutional authority. GEO posits that since it acted under the lawful direction of ICE, GEO can satisfy the Yearsley doctrine and qualify for derivative sovereign immunity—similar to the immunity courts would apply if the same claims were brought against ICE. GEO contends that the Yearsley doctrine does not provide merely a defense to avoid liability, but a right from suit.

    Alejandro Menocal and other detainees (“Menocal”) reject the assertion that government contractors are equivalent to government officials for immunity purposes.  Menocal argues that Congress has not enacted any legislation entitling government contractors to immunity. Menocal maintains that sovereign immunity is exclusive to the government alone and cannot be shared. Menocal claims that “derivative sovereign immunity” does not exist but is a misnomer formulated by lower courts. Furthermore, Menocal disagrees with GEO’s interpretation of the Yearsley doctrine, arguing that Yearsley did not extend immunity to government contractors. Menocal explains that Yearsley instead relied on the principles of agency law to establish a defense for government contractors against liability. According to Menocal, agency law prevents the government from passing on its immunities to a government contractor, but a government contractor can rely on the principal-agent relationship to defend themselves from liability. Under the Yearsley doctrine, Menocal explains, agents of the government, such as contractors, may avoid liability if the conduct at issue was constitutionally authorized by the government and performed at the direction of the government. Menocal asserts that GEO does not qualify for immunity under the Yearsley doctrine because GEO created and enforced its own policies—they were neither required nor directed by the government.  Menocal claims that, as a result, GEO was not acting as ICE’s agent and is not immune to liability.

    COLLATERAL-ORDER DOCTRINE AND APPEALABILITY

    GEO contends that the district court’s order denying GEO’s derivative sovereign immunity claim is a collateral order and is thus capable of immediate appeal. GEO asserts that derivative sovereign immunity is of the same character as qualified, absolute, or Eleventh Amendment immunities. GEO further argues that if an order denied any of those immunities, the order would be collateral and, as such, immediately appealable. Similarly, GEO points out that the scope of immunity granted by Congress to ICE implies a similar immunity for GEO. GEO posits that it is entitled to the same collateral-order appeal that ICE would warrant if ICE were in GEO’s position.

    Applying the collateral-order doctrine, GEO first asserts that the district court’s order conclusively determined the disputed question—whether GEO is entitled to immunity. The denial of derivative sovereign immunity, GEO explains, is conclusive because when the court determines that no immunity exists, the contractor must continue to litigate the claims against them. Regarding the second prong of the collateral-order doctrine, GEO asserts that the question of immunity remains “conceptually distinct” from Menocal’s claims. GEO argues that the potential existence of overlapping facts between these issues does not preclude the application of the collateral-order doctrine. GEO posits that an overlap in facts only poses an issue when the facts are in dispute, not when the facts are accepted for the purpose of appeal, as GEO contends the facts are in this case. Lastly, GEO asserts that the issue of GEO’s immunity is effectively unreviewable after a final judgment. GEO explains that after a judgment on Menocal’s claims, GEO will have already endured the burdens of litigation that immunity is meant to avoid.

    Conversely, Menocal asserts that the Tenth Circuit did not err in denying review of GEO’s claim of derivative sovereign immunity. Menocal contends that the statutory presumption in favor of finality precludes the immediate appeal of orders denying immunity under the Yearsley doctrine. Menocal points out that even for other forms of immunity, such as qualified immunity, the party arguing for immediate appeal must be able to show that an overriding public interest exists.  However, Menocal concedes that contractors may appeal orders concerning immunity under the Yearsley doctrine in exceptional circumstances, albeit with better, less blunt instruments than the collateral-order doctrine.

    Menocal argues that the district court’s order denying GEO immunity under the Yearsley doctrine does not qualify as a collateral order and thus cannot be immediately appealed. Applying the collateral-order doctrine, Menocal first asserts that an order denying the application of the Yearsley doctrine does not conclusively resolve the issue.According to Menocal, many such interlocutory orders are tentative and not suited to immediate appeal because they concern a dispute of facts as to whether the government directed the contractor’s actions, an element of the Yearsley doctrine. Secondly, Menocal argues that the Yearsley doctrine inherently overlaps with the merits of the case. Menocal highlights that GEO does not dispute the factual overlap. Finally, Menocal posits that an order denying a contractor’s claim for immunity under the Yearsley doctrine is a prime example of an order that can be properly reviewed after a final judgment. Menocal contends that the Yearsley doctrine is not a tool for contractors to avoid suit in the first place. According to Menocal, contractors still maintain the right to avoid liability, which is the purpose of the Yearsley doctrine.

    Discussion

    LITIGATION AGAINST GOVERNMENT CONTRACTORS

    The Chamber of Commerce of the United States of America (“The Chamber”), in support of GEO, argues that if government contractors lack immunity from suit, these contractors will be subjected to unwarranted lawsuits.  The Chamber contends that these lawsuits would be unwarranted because a contractor’s conduct is directed by government officials and authorized lawfully by the government. The Chamber argues this litigation will not only be unwarranted but also costly, prolonged, and potentially ruinous. The Nevada Hospital Association (“NHA”), on behalf of sixty-three hospitals in the state of Nevada, argues that imposing liability on government contractors will particularly harm small businesses, which accounted for 28% of government contractors in 2023.  NHA points out that some of these businesses are women and/or veteran-owned, and NHA argues that expensive and prolonged litigation will negatively impact these groups.  

    The American Federation of State, County, and Municipal Employees (“AFSCME”), in support of Menocal, argues that if the court grants government contractors immunity from suit for any work done on behalf of the government, holding contractors accountable for harm done to individuals would be nearly impossible.  AFSCME highlights that granting contractors immunity would insulate them in instances where the government would not be similarly insulated—for example, in cases involving violations of constitutional rights and unlawful withholding of wages.  Citizens for Responsibility and Ethics in Washington (“CREW”) further contends that, compared to private contractors, government officials are legally bound to serve the American people and are subject to many laws concerning ethics and corruption.  CREW argues that government contractors have independent financial interests and cannot perform “inherently governmental functions.” Therefore, CREW contends that government contractors should not be granted the same immunity from suit that comes with the authority to govern.

    PUBLIC WELFARE

    The Chamber, in support of GEO, argues that granting contractors immunity from suit enhances the government’s ability to perform its traditional functions. The Chamber argues that talented private-sector experts will decline government contracts because a lack of immunity will leave contractors facing full liability for actions undertaken under the instructions of government officials.The Chamber also raises concerns that fear of a lawsuit will “distract” contractors from effectively performing government responsibilities and lead to excessive hesitation in properly carrying out government work.  NHA outlines several benefits of hiring government contractors: contractors are skilled professionals with knowledge in their fields who can perform specific tasks within firm timelines. NHA argues that if the government is unable to contract with talented individuals, the overall quality of government services, as well as the quality of life of the American people, will decrease. NHA contends that subjecting contractors to liability may incentivize them to charge higher prices or cease contracting with the government entirely.

    AFSCME, in support of Menocal, argues that American workers will be subject to lower pay and increased work hazards if contractors like GEO have immunity from suit. AFSCME provides data illustrating that employees of government contractors in the carceral services industry make an average of $25,000 less than their federal counterparts and $9,000 less than state and local workers. Government contractors across multiple sectors have less access to benefits such as healthcare, sick leave, and retirement than their public-sector peers. AFSCME also provides data showing that private employees are subject to more safety and security-related incidents than their federal peers. AFSCME argues that American workers will face more dangerous working conditions if employed by private, for-profit contractors. AFSCME contends that if the court provided immunity for these violations, these businesses could artificially lower their costs, creating an unnatural incentive for governments to contract with them and further increasing the disparities in worker pay, benefits, and safety risks. AFSCME also highlights that privately run prisons have higher overall rates of repeat offenders, raising concerns about the safety of the general public if private carceral services contractors become common.

    Conclusion

    Authors

    Written by:    Brenda Narvaez and Ria Panchal

    Edited by:      Sara Fischer

     

     

    Additional Resources