At the center of the dispute is GEO Group, a private company that operates immigration detention facilities under contract with the federal government. Detainees sued GEO over its Voluntary Work Program. GEO argued it was simply executing government directives — including a disciplinary scale and program structure drawn directly from federal standards, with Congress appropriating the stipend GEO pays participants according to GEO's account — and that it was therefore immune from suit under the doctrine articulated in Yearsley v. W.A. Ross Construction Co. The district court denied GEO's motion for summary judgment on the Yearsley defense and granted summary judgment to the respondents on that issue; the Tenth Circuit then dismissed GEO's interlocutory appeal. The question before the Supreme Court is whether that denial qualifies as an immediately appealable collateral order under 28 U.S.C. § 1291.
Arguing for GEO, Dominic Draye contended that Yearsley confers a genuine immunity from suit — not merely a defense to liability — and that denials of such immunity have always been immediately appealable under the Court's collateral order doctrine. He pointed to the Court's 2019 decision in Knick v. Township of Scott as recognizing that Yearsley was correct to identify an immunity from suit, and argued that the same policy rationales underlying qualified immunity for government employees apply equally to contractors following government instructions. He also argued that GEO cannot price litigation risk into its fixed-price contract because the Federal Acquisition Regulations, specifically FAR Part 31.205, greatly restrict such costs, and that attempting to embed them as overhead could expose the company to False Claims Act liability.
Several justices questioned those arguments. Justice Sotomayor argued that Yearsley was never an immunity case at all — that it was about allocating responsibility for a taking, with the Court holding the agent not liable because the government, not the contractor, was the responsible party. Justice Jackson pressed on whether Yearsley is better understood as a defense, noting that sovereign immunity cannot be delegated and that the contractor's claimed protection is derivative in a way that does not fit traditional immunity doctrine. Justice Kagan questioned whether satisfying the Yearsley criteria — acting within Congress's constitutional power and in compliance with government directions — simply means the contractor did nothing wrong, making the concept of immunity redundant.
Responding for the detainees, Jennifer Bennett argued that GEO fails all three prongs required to establish a collateral order. She contended that Yearsley is a defense rooted in agency principles, not a right to avoid trial, citing Brady's statement that immunity from suit in the government contracting context is not favored and would require a grant from Congress in unambiguous terms. She also argued that the second Yearsley prong — whether the government directed the specific conduct that caused the plaintiff's injury — always requires a fact-intensive, record-bound inquiry, making Yearsley orders categorically different from qualified immunity denials, which turn on a pure question of law. She pointed to Will v. Hallock as holding that the burden of litigation alone does not justify immediate appeal even for government employees asserting a statutory immunity from suit.
Sopan Joshi, arguing for the United States as amicus supporting the detainees, told the Court the government views Yearsley as a rule about liability and a defense to liability, not an immunity from standing the burdens of trial. He acknowledged that the defense is critically important to government contracting operations and that the costs of contractor liability are real, but said those considerations do not change the collateral order analysis. He also disputed GEO's claim that litigation costs cannot be priced into contracts, stating that overhead costs and insurance against litigation expenses are permissible, and that OLC has long taken the position that indemnity clauses are acceptable as long as they are capped and conditioned expressly in the contract on there being appropriated funds available at the time payment is due.
Justice Kavanaugh returned repeatedly to the government's position, noting that if Yearsley is as important to government programs as GEO claims, it was difficult to understand why the government was opposing immediate appealability. Draye acknowledged the tension, attributing the government's stance to its recharacterization of Yearsley as a principal-agent privilege rather than an immunity — a position he said the government had not held before approximately eight years ago and that no court has accepted.