Supreme Court Holds That Denials Of Contractor “Immunity” Are Not Immediately Appealable
Client Alert | February 25, 2026
The GEO Group, Inc. v. Menocal, No. 24-758 – Decided February 25, 2026
Today, the Supreme Court unanimously held that federal contractors may not take immediate appeals from pretrial orders rejecting a defense to liability based on compliance with the government’s directives.
“Because Yearsley provides a defense to liability, not an immunity from suit, an order denying its protection can be effectively reviewed after a final judgment. So appellate review of such an order, as of most pretrial rulings, must await completion of the district court’s proceedings.”
Justice Kagan, writing for the Court
Background:
In Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), the Supreme Court held that government contractors cannot be held liable for acts that they undertake pursuant to validly conferred governmental authority. Yearsley gave rise to what many have described as “derivative sovereign immunity.”
GEO Group operates a private detention facility in Aurora, Colorado under contract with U.S. Immigration and Customs Enforcement (ICE). A class of detainees who were detained at GEO’s Aurora facility sued GEO in federal court, alleging that GEO’s facility-sanitation policy and voluntary-work program violate federal and Colorado law. GEO moved for summary judgment, asserting derivative sovereign immunity based on GEO’s claim that ICE authorized its challenged policies. After the district court denied the motion on the theory that ICE neither directed nor required those policies, GEO took an immediate appeal.
The Tenth Circuit dismissed the appeal for lack of jurisdiction. Under 28 U.S.C. § 1291, courts of appeals have jurisdiction over appeals from “final” decisions, which terminate the litigation. Under the collateral-order doctrine, appellate courts can hear appeals from certain, non-case-terminating decisions that (1) conclusively determine the disputed question, (2) resolve an issue completely separate from the merits of the action, and (3) are effectively unreviewable on appeal from a final judgment. The Tenth Circuit held that orders denying derivative sovereign immunity under Yearsley are not immediately appealable because they are not completely separate from the merits. Both the Yearsley defense and the merits of the case turn on whether the government directed the contractor’s challenged actions, so GEO would have to wait until the conclusion of litigation in the district court to appeal.
GEO petitioned for certiorari, noting a circuit split regarding whether government contractors can immediately appeal from denials of derivative sovereign immunity.
Issue:
Is an order denying a government contractor’s “derivative sovereign immunity” defense under Yearsley immediately appealable under the collateral-order doctrine?
Court’s Holding:
No. The Yearsley defense is a defense to liability on the merits, not an immunity from suit. Because merits defenses can be effectively reviewed on appeal from a final judgment, the collateral-order doctrine does not permit an immediate appeal.
What It Means:
- Today’s decision clarifies that derivative sovereign immunity under Yearsley is not, despite its label, a true immunity from suit, but a defense to liability on the merits. The Supreme Court explained that government authorization relieves contractors of liability because the Yearsley defense turns on the legality of the defendant’s conduct. Government authorization does not and cannot delegate the government’s immunity from suit to its agents; sovereign immunity belongs to the government alone.
- Because Yearsley does not provide an immunity from suit, orders rejecting that defense turn on the legality of the defendant’s conduct and therefore are effectively reviewable on appeal from a final judgment, defeating an immediate appeal as of right under the collateral-order doctrine.
- At the same time, the Court went out of its way to note that government contractors could use the appeal-certification process in 28 U.S.C. § 1292(b) to seek immediate appellate review of an otherwise unappealable order denying the Yearsley defense.
- Concurring in the judgment, Justice Thomas reiterated his longstanding position that the Court should refuse to allow interlocutory appeals from any new category of pretrial orders absent express congressional authorization.
- Justice Alito also wrote separately. He would have denied a right to an immediate appeal because the Yearsley defense does not vindicate sufficiently important constitutional or public-policy interests, not because the defense turns on the legality of the defendant’s conduct.
The Court’s opinion is available here.
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Related Practice: Government Contracts
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This alert was prepared by associates Patrick Fuster and Connor P. Mui.
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