Yearsley v. W.A. Ross Construction Co. (1940)
The Supreme Court ruled that a private construction company building levees on the Missouri River under a federal Army Corps of Engineers contract could not be sued for erosion damage to a neighboring landowner's property. The Court held that when a contractor acts under valid government authorization without exceeding its scope, it shares the government's own immunity from suit.
The contractor avoided liability for property damage caused during federally directed construction work.
Created the doctrine of "derivative sovereign immunity" that government contractors have relied on for 86 years to shield themselves from lawsuits. The doctrine has been invoked by military contractors, healthcare providers, and — as in this case — private prison operators.
GEO Group built its entire defense on this 1940 precedent, arguing it should inherit the government's immunity because it operates under an ICE contract. The Supreme Court's 2026 ruling did not overturn Yearsley but sharply limited its procedural power: it is a defense to be argued at trial, not a get-out-of-court card.