“It’s Spread Like Wildfire”

In October 2014, nine immigrants detained at the time or in the past at a GEO Group facility in Aurora, Colorado, filed suit against the company. All had worked various jobs at the detention center, like serving meals or doing clerical work, through the facility’s “voluntary work program.” They were paid $1 per day.

All detainees were also forced by prison staff to clean the facility without any pay whatsoever, scrubbing windows, cleaning toilets, and mopping floors. When several of the plaintiffs in the case refused to do so, they were threatened with “the hole” — solitary confinement.

“You feel like you don’t have rights in there,” one man detained at the Aurora facility testified in the case. “They tell you, ‘Clean, because you’re going to the hole,’ I’m going to clean.”

These labor conditions violated several Colorado state wage and trafficking laws, attorneys representing the detainees alleged. They sued the private prison operator for $5 million, noting that in 2013, while GEO Group was forcing immigrants to do its janitorial work for free, the company raked in $1.52 billion in revenue.

Over the last ten years, GEO Group has “repeatedly sought to delay the case,” attorneys for the plaintiffs wrote in a brief this year. Among the defenses the private prison giant raised to stall for time was derivative sovereign immunity — the sweeping legal shield increasingly invoked by federal contractors. Because its contract with ICE had, among other things, required GEO Group to offer a work program for detainees, the prison operator claimed that it could not be sued under Colorado state law; it was simply carrying out the federal government’s orders.

GEO Group is hardly the first company to make such an argument. Private contractors, from third-party student loan servicers to weapons manufacturers, have increasingly used the derivative sovereign immunity defense when accused of misconduct.

“The courts have been addressing more and more arguments by government contractors that they’re entitled to this defense in a particular case,” said Nandan Joshi, an attorney with the consumer legal advocacy group Public Citizen. “It’s spread like wildfire.”

Sovereign immunity is a legal doctrine that originates from common law. In the United States, sovereign immunity protects the federal government from lawsuits (unless it has explicitly waived that right). Private contractors claim a similar legal shield through derivative sovereign immunity. If a federal contractor is required by the government to carry out an action, the logic goes, then sovereign immunity is passed down from the state, protecting the private company from liability as well.

This principle can be traced back to a 1940 Supreme Court ruling, Yearsley v. W. A. Ross Construction Co., that found a construction contractor working for the government wasn’t liable for damage to private land — although the high court didn’t use the term “immunity” in its opinion. Generally, the courts have determined that if a contractor is following precise orders from the government, it can often escape liability for its actions. But the scope of this defense is contested, and private contractors have been trying to expand the concept into blanket immunity.

Derivative sovereign immunity is just one of several legal shields private contractors have developed over the years to try to stymie lawsuits over their actions. Military contractors, particularly those working for the Pentagon in combat zones, are using a new case to seek their own unique legal protections.

The case, Hencely v. Fluor Corporation, arose from a lawsuit against a construction contractor operating in Afghanistan, which argued that the contractor’s negligence allowed a suicide bomber access to a military base, severely injuring the plaintiff, a US soldier, and killing five others. The contractor in question, Fluor, is arguing that it has broad immunity from lawsuits related to contract work it undertook for the government.

If the Supreme Court sides with the contractor, attorneys with Public Citizen wrote in an amicus brief in the case, it would grant “blanket immunity” for all lawsuits against military contractors working in wartime combat zones — an area of law that has long been murky.

Fluor “seems to be arguing that they are not liable for anything done within the scope of their contract, even where they breached their contract,” Joshi at Public Citizen told the Lever, a broader request than in the GEO Group case.

Alliance of Goliaths

The backdrop for these twin legal battles is the continual outsourcing of core US government functions to private contractors, which over time has created a class of powerful companies that fill in for the government but are in some ways more difficult to oversee.

“Public officials are generally more accountable to the public than private companies are,” said Joshi. Private companies have their investors to answer to, rather than a public mandate, and may be subject to different oversight or regulatory requirements than a public body.

The Pentagon, which spends trillions of dollars on private vendors, has never successfully passed an audit. ICE contractors regularly flout congressional disclosure requirements. Already these contractors are pushing for more impunity in the contracting process; military contractors have advocated for measures, which are being considered in this year’s defense policy bill, to speed up procurement and slash restrictions on contracting.

Further privatization often means replacing union jobs with low-wage positions, as one major union wrote in its amicus brief in the GEO Group case. And all of this comes at an enormous cost, as private contractors take in ever more government dollars.

If the Supreme Court sides with the contractors in the two cases — granting them stronger legal protections against lawsuits — it could further entangle private contractors in the government, eroding the distinction between public and private services, advocates warn.

In the GEO Group case, the Trump administration has taken the side of the plaintiffs, arguing that while a derivative sovereign immunity defense is “critically important” to government contractors, it is not as broad as GEO Group claims. But the Department of Justice is siding with military contractors in the Hencely case, arguing that immunity is necessary for its war contractors.

It’s not the first time that the government has sided with its contractors on this question. Elengold, in a 2021 paper the law professor coauthored on derivative sovereign immunity, dubs this an “alliance of Goliaths,” a marriage between the federal government and big business to crush efforts by consumers or the public to use the courts to push back on exploitative policy.

“My concerns come when private, for-profit entities are violating state and federal law when not strictly required by the federal government and then avoiding liability,” Elengold said. “I think that’s a huge problem.”

Experts are unsure what the Supreme Court will ultimately decide on this issue, particularly in the GEO Group case, since the prison company’s arguments lack the backing of the Trump administration. Unlike other issues, such as dark money or deregulation, it’s more difficult to divine where the justices will stand on derivative sovereign immunity. Currently the court is scheduled to hear arguments in the case later this fall.

Although the conservative supermajority has certainly proved a friend to big business, Joshi speculated that in this instance, it may not be as helpful to GEO Group.

“It’s really an open question,” he said. “More open than some other questions might be.”