Justices Nix Fast Appeal in GEO $1-Per-Day Forced Labor Case (2)

The US Supreme Court blocked GEO Group Inc. from immediately appealing a lower court’s rejection of its immunity defense to escape forced labor claims from immigration detainees in Colorado.

The justices on Wednesday upheld the US Court of Appeals for the Tenth Circuit, which declined to hear the private prison operator’s appeal of a trial judge’s dismissal order until the merits of the detainees’ claims are decided.

The case, filed in 2014, claimed GEO forced detainees at a Colorado facility to perform various jobs, including preparing food, operating the library, and doing laundry, or risk solitary confinement under a voluntary work program. GEO, a private contractor operating the facility for Immigration and Customs Enforcement, allegedly paid them just $1 per day.

The high court’s opinion clears up a 5-3 split among circuit courts over whether federal contractors can quickly appeal a motion to dismiss order when they’re blocked from claiming the government’s immunity from being sued—a defense known as “derivative sovereign immunity.” The US District Court for the District of Colorado had rejected the contractor’s claim of derivative sovereign immunity from suits concerning government contracts afer finding that ICE didn’t explicitly required GEO to adopt the challenged labor policies.

The justices concluded that GEO Group can assert a defense to liability, but doesn’t have immunity from being sued or from going through trial. “Sovereign immunity belongs alone to the government,” they said.

Yearsley Limits Clarified

The ruling hinged on the high court’s interpretation of the scope and nature of a contractor’s defense under its 1940 Yearsley v. W.A. Ross Construction Co. decision.

The justices clarified that Yearsley only provides federal contractors a potential merits defense, which can be reviewed after trial through the normal appeal process, if they acted lawfully and within the government’s authorization.

“Yearsley thus ensures that it will never shield unlawful conduct, in the way that all immunities do,” the unanimous opinion said.

The Supreme Court further clarified that federal appellate courts usually have jurisdiction only over final decisions that resolve an entire case, and that interlocutory appeals are limited to three exceptions. These include when an order conclusively determines a disputed question, addresses an important issue separate from the case’s merits, or is effectively unreviewable after a final judgment, it said.

Thomas Draws Caution

Justice Clarence Thomas agreed with the high court’s core holding that federal contractors like GEO can’t claim immunity from suit under Yearsley.

But he wrote separately to express concern about his colleagues using the judge-made collateral-order doctrine to define appeal rights.

The Supreme Court created the doctrine in its 1949 Cohen v. Beneficial Industrial Loan Corp. decision to interpret the federal appellate jurisdiction statute, which allows appeals only from final decisions and certain interlocutory orders.

According to Thomas, the doctrine “conflicts with Congress’s authority over federal appellate jurisdiction” and may improperly expand appellate jurisdiction. He emphasized that Congress, not courts, should determine when interlocutory appeals are permitted.

In the wake of the ruling, lower court proceedings against the private prison operator will proceed. GEO faces two classes of approximately 60,000 detainees accusing it of unjust enrichment and violating the Trafficking Victims Protection Act.

Jennifer Bennett of Gupta Wessler LLP, who argued for the detainees, said in a statement that the justices’ decision “affirms a straightforward rule: 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.”

“We’re very pleased with the Court’s ruling that preserves the orderly administration of justice,” she added.

Representatives for GEO didn’t immediately respond to requests for comment.

Greenberg Traurig LLP represents GEO. Gupta Wessler LLP represents the detainees.

The case is The GEO Group Inc. v. Menocal, U.S., No. 24-758, opinion issued 2/25/26.