High Court Says GEO Group Can't Appeal Immunity Ruling

The U.S. Supreme Court ruled Wednesday that GEO Group Inc. cannot immediately appeal a district court decision that found it does not derive sovereign immunity from the federal government in a forced labor class action brought by immigrant detainees.

In a 9-0 opinion, the justices affirmed the Tenth Circuit's dismissal of GEO's challenge to a Colorado federal judge's ruling that denied the company's claim to immunity under the 1940 Supreme Court case Yearsley v. W.A. Ross Construction , which GEO said it derived through its work as a government contractor for U.S. Immigration and Customs Enforcement.

Ruling that Yearsley provides contractors with a defense to liability, and not an immunity from suit like GEO argued on appeal, the justices said a district court order denying the so-called Yearsley defense can be effectively reviewed on appeal following a final judgment in the case.

"If eventually found liable, GEO may of course appeal the district court's rejection of its asserted Yearsley defense. But GEO must wait until then. A Yearsley denial is not appealable before the trial court's proceedings have ended," Justice Elena Kagan wrote in the opinion.

GEO's appeal stems from a 2014 class action brought by immigrant detainees at the Aurora Immigration Processing Center in Colorado, alleging that a mandatory cleaning policy, which could land detainees in solitary confinement for refusing, violates the Trafficking Victims Protection Act. The suit also claimed that GEO unjustly enriched itself by using their labor to run the facility while they earned only $1 per day under a voluntary work program.

A Colorado federal judge denied GEO's claim to immunity under Yearsley in October 2022, and ruled that the sanitation policy exceeded ICE's detention standards. To secure protection under Yearsley, GEO was required to show that Congress authorized its contract with the government and that GEO did not exceed its authority under the contract.

The Tenth Circuit dismissed GEO's appeal two years later, saying it lacked the authority to hear the appeal on immunity separately from the merits of the case under the 1949 Supreme Court case Cohen v. Beneficial Industrial Loan Corp. , in which the justices laid out a three-part test for determining whether a prejudgment order can be immediately appealed.

But while the Tenth Circuit based its decision on the second Cohen condition — which requires that the order in question resolves an important issue completely separate from the merits of the action — the justices focused on the third Cohen condition in their Wednesday ruling. That third condition requires for the order to be "effectively unreviewable on appeal from a final judgment."

"When, as here, an order denies a pretrial request to dismiss, appealability under Cohen will generally turn on whether the defendant has asserted a defense to liability or instead an immunity from suit. ... If a defense, Cohen is likely to block an immediate appeal; if an immunity, Cohen will likely allow it," Justice Kagan wrote in the opinion.

That's because an immunity from suit applies irrespective of the case's merits, and offers greater protection than a finding of nonliability by ensuring that defendants don't need to address their conduct in court and can avoid all the usual burdens of litigation, the justice said. The same is not true for a defense to liability, which "does not allow the defendant to escape the varied rigors and costs of legal proceedings," Justice Kagan said.

"That divergence — in whether the defendant possesses a right not to stand trial — matters for the third Cohen condition," which requires a right to be irretrievably lost absent an immediate appeal, Justice Kagan said.

"The right to avoid trial fits that description. It is irretrievably lost once trial occurs, even supposing the defendant were to prevail on the merits. And so, in the ordinary case, the denial of an immunity is immediately appealable," the justice said.

The right to a finding of nonliability is not the same because it can be vindicated after trial through an appellate court's reversal of an adverse final judgment, Justice Kagan said. As a result, an order denying a merits defense is generally appealable only after trial court proceedings have finished, the justice said.

As for Yearsley, Justice Kagan said because the legal doctrine only protects contractors when they have acted lawfully, Yearsley functions as a defense to liability on the merits, consistent with the ruling's language, which "never refers to an 'immunity,' or otherwise suggests that the defendant receives a pass from legal proceedings."

"Once Yearsley is understood in that way — as a merits defense — the question before us almost answers itself: No, a district court's denial of Yearsley protection is not immediately appealable under [Title 28 of the U.S. Code Section 1291]," Justice Kagan said.

Justices Clarence Thomas and Samuel Alito wrote concurring opinions, in which they said they agreed with the majority that Yearsley established a defense from liability and not an immunity from suit. Justice Thomas, however, took issue with the majority's application of the collateral order doctrine established by Cohen.

"I remain of the view that we should not expand the Cohen collateral order doctrine beyond orders that our precedents have already held to be immediately appealable," the justice said.

Justice Alito wrote in his concurrence that the majority's conclusion that Yearsley is a defense and not an immunity shouldn't rest solely on the fact that Yearsley's applicability turns on the legality of the defendant's conduct.

"In short, although the majority's focus — whether a defense turns on the legality of the defendant's conduct — can be relevant in the collateral order analysis, it is not dispositive of whether a defense constitutes an immunity," the justice said.

In response to the justices' decision, Jennifer Bennett of Gupta Wessler LLP, an attorney representing the detainees, said in a statement Wednesday that the ruling reaffirms that "government contractors like GEO do not qualify for sovereign immunity and must follow the same 'one case, one appeal' principle that governs every other litigant."

Representatives for GEO did not immediately respond to requests for comment Wednesday.

GEO is represented in-house by Scott A. Schipma and by Dominic Draye and William E. Eye of Greenberg Traurig LLP.

The detainees are represented by Jennifer Bennett and Robert Friedman of Gupta Wessler LLP, Juno Turner, Rachel Dempsey, Alexander Hood and David H. Seligman of Towards Justice, Adam Koshkin and Michael Scimone of Outten & Golden LLP, Hans Meyer of the Meyer Law Office PC and Brandt Milstein and Andrew H. Turner of Milstein Turner PLLC.

The case is The GEO Group Inc. v. Menocal et al., case number 24-758, in the U.S. Supreme Court.

--Editing by Daniel King.

Update: This article has been updated with additional information and comments.

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