The Supreme Court’s grant of certiorari in GEO Group, Inc. v. Menocal, No. 24-758 (U.S. argued Nov. 10, 2025), raises a procedural question about the collateral-order doctrine, but it also raises a deeper doctrinal inconsistency in the Court’s treatment of private entities that perform governmental functions. Private prison companies are state actors for purposes of liability under 42 U.S.C. § 1983, yet they lack the sovereign immunities that shield state agencies. Menocal now asks whether these same private entities may nonetheless claim derivative sovereign immunity, a federal-common-law doctrine originating in Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), to obtain immunity from suit and immediate appellate review. Derivative sovereign immunity shields government contractors from liability when they act pursuant to valid governmental authorization and within the scope of that authorization. It does not, however, traditionally provide immunity from suit itself.
The central question in Menocal is whether a denial of derivative sovereign immunity should be treated as immediately appealable, which would transform a limited liability defense into an immunity that blocks litigation. That transformation would widen, rather than resolve, the doctrinal gap between state-action attribution and immunity attribution for private prison contractors.
GEO’s position cannot be squared with the Court’s immunity jurisprudence. GEO’s argument attempts to expand derivative sovereign immunity into something it has never been: a state-actor-like immunity from litigation itself. The doctrinal history cannot sustain this expansion. Accepting GEO’s theory would force the Court to treat private prison companies as sovereigns and non-sovereigns simultaneously.
Background
The GEO Group operates the Aurora, Colorado immigration detention center under an ICE contract. Detainees (including Menocal, named in the suit) allege that GEO’s “Voluntary Work Program” violated the Trafficking Victims Protection Act (TVPA), 18 U.S.C. § 1589, and constituted unjust enrichment, claiming they were coerced into janitorial labor for $1/day and threatened with discipline for refusing. The district court denied GEO’s motion for summary judgment on derivative sovereign immunity, finding factual disputes about whether ICE itself directed the challenged conduct, specifically GEO’s compensation practices and disciplinary threats. The Tenth Circuit dismissed GEO’s interlocutory appeal for lack of jurisdiction, reasoning that derivative sovereign immunity does not qualify for immediate appellate review under the collateral-order doctrine. Menocal v. GEO Group, Inc., 86 F.4th 1234 (10th Cir. 2024).
GEO argues that private contractors executing federal directives are entitled to immediate review of immunity denials, analogizing the doctrine to qualified immunity. Meanwhile, respondents, with the United States through the DOJ as amicus, contend that Yearsley immunity is limited to contractors executing precise governmental instructions and does not create immunity from suit, only from liability.
Private prison companies exist in a doctrinal paradox in how they are treated by the courts. Courts treat them as state actors when plaintiffs seek to impose constitutional liability under §1983, yet they are categorically denied sovereign immunity as “arms of the state” (Language used in Eleventh Amendment cases to determine if the entity in question is so closely connected to the State that a suit against it is effectively a suit against the State itself), This asymmetry is a central tension in privatization jurisprudence.
On the one hand, the Supreme Court has long held that private entities performing traditional public functions act “under color of state law.” In West v. Atkins, 487 U.S. 42 (1988), the Court held that a privately contracted prison physician was a state actor for §1983 purposes. Lower courts have extended this reasoning to private prison guards and operators because incarceration is a “traditional and exclusive” public function. See, e.g., Rosborough v. Management & Training Corp., 350 F.3d 459 (5th Cir. 2003); Street v. CCA, 102 F.3d 810 (6th Cir. 1996).
Yet, when these same private prison companies attempt to invoke state sovereign immunity, courts emphatically reject the analogy that because they are state actors for liability purposes that they are “arms of the state” for immunity purposes. For Eleventh Amendment purposes, private contractors are not “arms of the state,” because they lack state control, state funding, and state legal personality. See Hale v. GEO Group, 50 F.4th 1249 (10th Cir. 2022). The Supreme Court also confirmed in Correctional Services Corp. v. Malesko, 534 U.S. 61 (2001), that federal private prison operators cannot claim federal sovereign immunities.
Thus, private prisons bear the liability of state actors without enjoying their immunities. The concept of liability without immunity is a constitutional safeguard that allows states to outsource and privatize certain public functions, while preventing private actors, who lack democratic accountability, from abusing state power by imposing liability and withholding immunity. This divergence is one that Menocal threatens to complicate. Although Menocal arises in the context of immigration detention, it is not an isolated dispute. Courts have confronted similar claims of derivative sovereign immunity by private contractors across a range of contexts, including military contracting, infrastructure development, and federal communications programs See, e.g., Boyle v. United Technologies Corp., 487 U.S. 500 (1988); Ackerson v. Bean Dredging LLC, 589 F.3d 196 (5th Cir. 2009); Campbell-Ewald Co. v. Gomez, 577 U.S. 153 (2016). The case thus implicates a broader question about the legal consequences of privatizing governmental functions, particularly where contractors seek to invoke sovereign protections without assuming sovereign accountability.
Argument
1. Limited Scope of Derivative Sovereign Immunity Under Yearsley
GEO invokes Yearsley, arguing that contractors who follow government directives inherit the government’s immunity. But Yearsley is much narrower than that; contractors are shielded only when (1) the government authorized the contractor’s actions, and (2) the contractor faithfully executed that authorization. 309 U.S. at 20–21.
Authorization in this context requires more than a general contractual relationship. Courts look for specific governmental direction such as mandated designs, required methods, or compulsory policies. Conversely, when contractors exercise discretion or adopt independent practices not dictated by the government, Yearsley does not apply. That is why factual disputes about the scope of authorization are often dispositive.
Critically, Yearsley immunity is immunity from liability, not immunity from suit, and courts have repeatedly refused to equate it with qualified immunity or sovereign immunity. See Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 166–67 (2016). GEO’s position collapses this distinction by arguing that a denial of Yearsley immunity should be immediately appealable under the collateral-order doctrine, which is a procedural treatment reserved for true immunities from suit, such as qualified immunity or sovereign immunity. See Mitchell v. Forsyth, 472 U.S. 511 (1985).
GEO’s argument therefore attempts to expand derivative immunity into something it has never been: a state-actor-like immunity from litigation itself.
2. Doctrinal Incoherence of Treating Private Prisons as Sovereigns
Accepting GEO’s view would intensify the already unstable doctrinal asymmetry. Under §1983, private prisons are treated as states for purposes of liability. But, under sovereign-immunity doctrine, private prisons are treated as non-states for purposes of immunity. Under GEO’s version of derivative immunity, private prisons would be treated as states again, this time for immunity from suit.
This back-and-forth lacks coherence. State action doctrine focuses on public function and attribution; immunity doctrine focuses on government accountability and structural constitutional principles, such as preserving democratic accountability. The doctrines serve fundamentally different purposes. GEO’s theory collapses them, treating “performing a governmental function” as sufficient to gain sovereign immunity, which is precisely the move courts have resisted for decades.
In Richardson v. McKnight, 521 U.S. 399 (1997), the Court denied qualified immunity to private prison guards, rejecting functionalist arguments that immunity should follow from the nature of the task performed. The Court emphasized that immunity does not automatically attach to private actors simply because they perform public functions. Privatization is a policy choice with legal consequences, and one consequence is the loss of sovereign protections. GEO asks the Court to repudiate that logic.
3. Responding to GEO’s counterarguments
GEO argues that there needs to be “uniformity” across government contractors, and argues that contractors need predictable immunity rules. However, Richardson held that private firms performing public functions do not receive automatic access to public immunities. Courts have drawn similar distinctions in cases involving military contractors, federal marketers, and private professionals retained by the government. See, e.g., Richardson v. McKnight, 521 U.S. 399 (1997); Campbell-Ewald Co. v. Gomez, 577 U.S. 153 (2016); Boyle v. United Techs. Corp., 487 U.S. 500 (1988); Filarsky v. Delia, 566 U.S. 377 (2012). The uniformity argument is therefore settled by precedent.
GEO also argues that it acted pursuant to federal directives. However, the district court found factual disputes about whether ICE mandated GEO’s pay practices or disciplinary threats. Under Yearsley, discretionary acts outside of governmental instruction are not immune. Allowing GEO to appeal these factual disputes would convert Yearsley into a jurisprudential shield far broader than intended.
GEO argues that it needs immunity because the harm of the burden of litigation is effectively unreviewable after final judgment. Similar to how the Eleventh Amendment protects states from becoming mired in endless lawsuits and having to go through the costs of litigation, GEO wants derivative sovereign immunity from suit for similar reasons. However, immunity from suit is reserved for actors whose burdens implicate structural constitutional concerns, which only applies to states, not contractors. See Alden v. Maine, 527 U.S. 706 (1999).
Conclusion
The paradox at the core of privatized incarceration is that it is state action without sovereign status. This paradox demands doctrinal clarity, not an expansion of private contractors’ immunity. The Supreme Court’s decision, which is pending after oral argument was held in November, in GEO Group v. Menocal will determine whether private prison companies can strategically toggle between public and private identities. That is, public enough to be state actors for purposes of liability, yet private enough to escape sovereign immunity, and, if GEO prevails, public once again for purposes of derivative immunity from suit. Such a regime would render accountability near impossible. A denial of interlocutory review would preserve the longstanding doctrinal boundary between state attribution and sovereign protection. This would reaffirm that privatization of government functions is not a mechanism for outsourcing sovereign prerogatives into private hands. As the state increasingly outsources its functions, the Court must ensure that sovereign immunity remains tethered to the sovereign itself.