GEO Group, a private prison operator, ran a detention facility in Colorado under a contract with ICE. A former detainee, Alejandro Menocal, filed a class action alleging that GEO's work policies for detainees violated federal bans on forced labor and state laws against unjust enrichment. GEO moved to dismiss the case, arguing that under Yearsley v. W. A. Ross Constr. Co., it could not be held liable for conduct that the Government had lawfully authorized and directed. The District Court rejected this argument, finding that the contract did not instruct GEO to adopt the challenged policies and that GEO had exceeded its authority. When GEO immediately appealed the denial of its motion, the Tenth Circuit dismissed the appeal for lack of jurisdiction, holding that such orders do not qualify for interlocutory review. The Supreme Court granted certiorari to resolve whether a pretrial order denying Yearsley protection is immediately appealable.
Justice Kagan, writing for the Court, analyzed the appealability of the order under the final-judgment rule of 28 U.S.C. § 1291 and the narrow collateral-order doctrine established in Cohen v. Beneficial Industrial Loan Corp. To be immediately appealable, a non-final order must satisfy three conditions: it must conclusively determine the disputed question, resolve an issue separate from the merits, and be effectively unreviewable on appeal from a final judgment. The Court focused on the third condition, which turns on whether the defendant asserts a defense to liability or an immunity from suit. An immunity is an entitlement not to stand trial; its denial is irretrievably lost if trial occurs. A defense to liability, by contrast, is a claim that the conduct was lawful; the right to a finding of non-liability can be vindicated after trial through reversal of an adverse judgment. The Court held that Yearsley provides a merits defense, not an immunity. Yearsley shields contractors only when they act within the scope of lawful government authorization, meaning the protection runs out if the contractor violates the law. This distinguishes it from sovereign immunity, which does not extend to government agents. Because Yearsley is a defense to liability, its denial is not effectively unreviewable after a final judgment, and thus does not satisfy the collateral-order doctrine.
GEO Group must proceed to trial in the District Court without the benefit of interlocutory appellate review. The decision clarifies that federal contractors cannot bypass trial to challenge Yearsley denials immediately. If GEO is found liable at trial, it may then appeal the rejection of its Yearsley defense. The ruling preserves the final-judgment rule and prevents piecemeal litigation, while leaving open the possibility of review via the § 1292(b) certification process for special circumstances.