Ugochukwu Nwauzor v. the Geo Group, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UGOCHUKWU GOODLUCK Nos. 21-36024

NWAUZOR; FERNANDO 22-35026

AGUIRRE-URBINA, individually and

on behalf of all those similarly D.C. No.

situated, 3:17-cv-05769-

RJB

Plaintiffs-Appellees,

v. OPINION

THE GEO GROUP, INC., a Florida

corporation,

Defendant-Appellant.

STATE OF WASHINGTON, Nos. 21-36025

22-35027

Plaintiff-Appellee,

D.C. No.

v. 3:17-cv-05806-

RJB

THE GEO GROUP, INC.,

Defendant-Appellant.

2 NWAUZOR V. THE GEO GROUP, INC.

Appeal from the United States District Court

for the Western District of Washington

Robert J. Bryan, District Judge, Presiding

Argued and Submitted October 6, 2022

Seattle, Washington

Before: Mary H. Murguia, Chief Judge, and William A.

Fletcher and Mark J. Bennett, Circuit Judges.

Opinion by Judge W. Fletcher;

Dissent by Judge Bennett

SUMMARY*

Washington’s Minimum Wage Act

The panel affirmed the district court’s judgment in favor

of a class of detainees and Washington State in their

consolidated actions against GEO Group, Inc., which

operates the Northwest Immigration and Customs

Enforcement Processing Center (“NWIPC”) in Tacoma,

Washington, for violations of Washington’s Minimum

Wage Act (“MWA”).

GEO operates the NWIPC under contract with the U.S.

Immigration and Customs Enforcement. GEO has a

*

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

NWAUZOR V. THE GEO GROUP, INC. 3

voluntary work program (“VWP”) at the NWIPC, which

included hundreds of civil detainees.

The panel held that the application of Washington’s

MWA to civil detainees held in GEO’s privately operated

federal detention center did not violate the doctrine of

intergovernmental immunity. The panel also held that

Washington’s MWA was not preempted by federal law.

Finally, the panel held that GEO did not have derivative

sovereign immunity under the government contractor

defense.

Dissenting, Judge Bennett would hold that Washington’s

MWA (1) violated the Supremacy Clause and was

unconstitutional as applied to NWIPC, and (2) was

preempted by federal immigration law as applied to the

NWIPC. Because he would reverse the district court on both

intergovernmental immunity and preemption grounds, he

would not reach GEO’s derivative sovereign immunity

argument.

COUNSEL

Jennifer D. Bennett (argued) and Neil K. Sawhney, Gupta

Wessler LLP, San Francisco, California; Thomas Scott-

Railton and Gregory A. Beck, Gupta Wessler LLP,

Washington, D.C.; Marsha J. Chien (argued) and Lane

Polozola, Managing Assistant Attorneys General; Andrea

Brenneke, Assistant Attorney General, Civil Rights

Division; Robert W. Ferguson, Attorney General; Office of

the Washington Attorney General, Seattle, Washington;

Adam J. Berger, Lindsay L. Halm, Jamal Whitehaead, and

Rebecca J. Roe, Schroeter Goldmark & Bender, Seattle,

Washington; Meena Pallipamu, Meena Pallipamu

4 NWAUZOR V. THE GEO GROUP, INC.

Immigration Law PPLC, Seattle, Washington; R. Andrew

Free, Law Office of R. Andrew Free, Atlanta, Georgia; for

Plaintiffs-Appellees.

Michael W. Kirk (argued), J. Joel Alicea, Joseph O.

Masterman, Tiernan B. Kane, and Charles J. Cooper, Cooper

& Kirk PLLC, Washington, D.C., for Defendant-Appellant.

Christopher J. Hajec and Gina M. D’Andrea, Immigration

Reform Law Institute, Washington, D.C., for Amicus Curiae

Immigration Reform Law Institute.

Catherine K. Ruckelshaus, National Employment Law

Project, New York, New York, for Amici Curiae National

Employment Law Project, Inc..

Kwi “Kat” Choi and Robin L. Goldfaden, Deputy Attorneys

General; Vilma R. Palma-Solana and Marisa Hernandez-

Stern, Supervising Deputy Attorneys General; Satoshi Yanai

and Michael L. Newman, Senior Assistant Attorneys

General; Rob Bonta, Attorney General of California; Office

of the California Attorney General, Los Angeles, California;

William Tong, Attorney General, State of Connecticut,

Hartford, Connecticut; Kathleen Jennings, Attorney

General, State of Delaware, Wilmington, Delaware; Holly T.

Shikada, Attorney General, State of Hawaii, Honolulu,

Hawaii; Kwame Raoul, Attorney General, State of Illinois,

Chicago, Illinois; Aaron M. Frey, Attorney General, State of

Maine, Augusta, Maine; Brian E. Frosh, Attorney General,

State of Maryland, Baltimore, Maryland; Dana Nessel,

Attorney General, State of Michigan, Lansing, Michigan;

Keith Ellison, Attorney General, State of Minnesota, St.

Paul, Minnesota; Matthew J. Platkin, Acting Attorney

General, State of New Jersey, Trenton, New Jersey; Hector

Balderas, Attorney General, State of New Mexico, Santa Fe,

New Mexico; Letitia James, Attorney General, State of New

NWAUZOR V. THE GEO GROUP, INC. 5

York, New York, New York; Ellen F. Rosenblum, Attorney

General, State of Oregon, Salem, Oregon; Peter F. Neronha,

Attorney General, State of Rhode Island, Providence, Rhode

Island; Thomas J. Donovan Jr., Attorney General, State of

Vermont, Montpelier, Vermont; Karl A. Racine, Attorney

General, District of Columbia; Washington, D.C.; for

Amicus Curiae The States of California, Connecticut,

Delaware, Hawaii, Illinois, Maine, Maryland, Michigan,

Minnesota, New Jersey, New Mexico, New York, Oregon,

Rhode Island, and Vermont, and the District of Columbia.

Jeremiah Miller, Fair Work Center, Seattle, Washington;

Hannah Woerner, Columbia Legal Services, Olympia,

Washington; for Amici Curiae La Resistencia, Fair Work

Center, and Professor Angelina Snodgrass Godoy.

Eunice H. Cho, American Civil Liberties Union, National

Prison Project, Washington, D.C.; Aditi Shah, American

Civil Liberties Union, National Prison Project, New York,

New York; John Midgley, American Civil Liberties Union

of Washington, Seattle, Washington; Mark Fleming,

National Immigrant Justice Center, Chicago, Illinois; for

Amici Curiae American Civil Liberties Union, The ACLU

of Washington, and The National Immigrant Justice Center.

Matt Adams, Michael K. Hur, Leila Kang, and Aaron

Korthuis, Northwest Immigrant Rights Project, Seattle,

Washington, for Amicus Curiae Northwest Immigrant

Rights Project.

Bradley Hinshelwood and Mark B. Stern, Attorneys,

Appellate Staff, Civil Division; Tessa M. Gorman, United

States Attorney; Brian M. Boynton, Principal Deputy

Assistant Attorney General; United States Department of

Justice, Washington, D.C.; for Amicus Curiae United States

of America.

6 NWAUZOR V. THE GEO GROUP, INC.

OPINION

W. FLETCHER, Circuit Judge:

The GEO Group (“GEO”) is a publicly traded private

corporation that operates detention and prison facilities.

Since 2005, GEO has operated the Northwest Immigration

and Customs Enforcement Processing Center (“NWIPC”),

an immigration detention center in Tacoma, Washington.

GEO operates the NWIPC under contract with United States

Immigration and Customs Enforcement (“ICE”), the federal

agency tasked with enforcement of immigration laws.

During the period relevant to this appeal, GEO had a

voluntary work program at the NWIPC. Every day,

hundreds of civil detainees at the NWIPC worked for GEO,

performing tasks essential to the operation of the facility.

GEO usually paid these workers $1 per day, the minimum

compensation mandated by ICE. Without objection from

ICE, GEO occasionally paid them up to $5 per day when

necessary to attract sufficient workers. Because of the labor

provided to GEO by the detained workers employed under

this program, GEO operated its facility with just a handful

of full-time staff hired from the local area, thereby saving

millions of dollars that it would otherwise have spent on

payroll.

In 2017, a class of detainees and Washington State each

sued GEO in federal court for violations of Washington’s

Minimum Wage Act (“MWA”). The district court

consolidated the actions. A jury awarded $17,287,063.05 in

back pay damages to the detainee class. After a bench trial,

the court awarded $5,950,340.00 in unjust enrichment to

Washington State and enjoined GEO from employing

detainees without paying Washington’s minimum wage.

NWAUZOR V. THE GEO GROUP, INC. 7

GEO appealed to this court. After hearing oral

argument, we certified three questions to the Washington

Supreme Court. Nwauzor v. GEO Group, Inc. (“Nwauzor”),

62 F.4th 509 (9th Cir. 2023). We have now received the

answers to those questions. We affirm the judgment of the

district court.

I. Background

The NWIPC has a maximum capacity of 1,575 detainees.

Detainees at the NWIPC are awaiting administrative review

of their immigration status. They are civil detainees. They

are not in criminal proceedings. Some detainees at the

NWIPC lack legal status in the United States. Others are

lawful permanent residents with work authorization.

Detainees are held until they are either deported because

they have no legal status or released into the United States

because they have a legal right to be here.

The current ten-year contract between GEO and ICE

began in 2015 and awards GEO a minimum of $700 million

over ten years. Between 2010 and 2018, GEO’s gross profit

from managing the NWIPC ranged between $18.6 million

and $23.5 million per year, with general net profit margins

of 16 to 19 percent.

GEO’s contract with ICE requires GEO to comply with

“all applicable federal, state, and local laws and standards,”

including “labor laws and codes.” Critically for purposes of

the case before us, the contract does not exclude state

minimum wage laws from the definition of state “labor laws

and codes.” Further, and also critically, the contract

provides that if “a conflict exist[s] between [federal and

local] standards, the most stringent standard shall apply.”

Finally, the contract provides, “Subject to existing law,

regulations and/or other provisions of this contract, illegal

8 NWAUZOR V. THE GEO GROUP, INC.

or other undocumented aliens will not be employed by the

Contractor, or with this contract.” (Emphasis added.) This

provision does not exclude state labor laws and codes from

its definition of “existing law.” Nor does it negate the “other

provision[] of this contract” that allows GEO to offer paid

employment to undocumented noncitizen detainees at the

NWIPC.

GEO’s contract also requires GEO to comply with ICE’s

Performance-Based National Detention Standards

(“PBNDS”). Section 5.8 of the PBNDS requires private

contractors operating detention facilities to offer a Voluntary

Work Program (“VWP”). Section 5.8 states that the purpose

of the VWP is to provide detainees “opportunities to work

and earn money while confined, subject to the number of

work opportunities available and within the constraints of

the safety, security and good order of the facility.” Detainees

who choose to participate in the VWP are not permitted to

work more than 8 hours per day and 40 hours per week.

Section 5.8 requires contractors to ensure that “working

conditions . . . comply with all applicable federal, state and

local work safety laws and regulations.” Section 5.8 also

requires contractors to compensate detainees at a rate of “at

least $1.00 (USD) per day” (emphasis added).

Nothing in GEO’s contract with ICE or in the PBNDS

provides that GEO may not compensate civil detainees at

rates higher than $1.00 per day. As described in greater

detail below, GEO has routinely paid detainees up to $5 per

day when necessary to attract sufficient workers. GEO has

done so without any objection from ICE.

ICE played no role in the development or management

of the VWP at the NWIPC. GEO created job roles and

descriptions, set work schedules, provided training,

NWAUZOR V. THE GEO GROUP, INC. 9

supervised detained workers, and managed payroll.

Detained workers’ responsibilities included meal

preparation and kitchen sanitation, janitorial work, building

repairs, waste management, and laundry. GEO started the

VWP when it first began to operate the NWIPC in 2005. In

the years since then, the number of daily participants in the

VWP has ranged from 200 to 470 detainees.

GEO’s contract with ICE requires it to keep the NWIPC

clean and free of pests, dispose of waste appropriately,

provide clean linens and blankets, and serve detainees three

nutritious meals daily. During the period relevant to this

case, GEO relied heavily on the labor of the detained

workers it employed to fulfill its contractual duties. In the

kitchen, GEO employed thirteen full-time outside

employees and used nearly one hundred detainees each day

to prepare meals, cook and serve food, and wash dishes.

Without the help of detainees, the kitchen staff would have

been “absolutely” unable to meet demand. In the laundry

room, one full-time outside employee typically supervised

twelve to fifteen detainees processing industrial loads of

laundry for the entire facility seven days a week. Detainees

cleaned the majority of the facility’s secured common areas,

including the kitchen, laundry room, communal bathrooms

and showers, and recreational areas. GEO employed three

outside employees as full-time janitors to clean non-secured

areas to which detainees were not permitted access. GEO

estimated that if the VWP at the NWIPC ended, it would

have to hire approximately 85 additional full-time outside

employees.

GEO usually paid its employed detained workers $1 per

day. GEO sometimes increased their pay up to $5 per day.

These temporary increases incentivized detainees to take

undesirable shifts or to work additional shifts when program

10 NWAUZOR V. THE GEO GROUP, INC.

participation was low, such as during hunger strikes or

outbreaks of disease. GEO always resumed paying

detainees $1 per day as soon as practicable. GEO never paid

its employed detainees Washington’s minimum wage.

Despite the low pay and working conditions, detainees

participated in the VWP because of the situation in which

they had been placed. One detainee testified in his

deposition: “I need the money desperately. I have no

choice.”

In 2017, a class of detained workers at the NWIPC and

Washington State brought separate actions against GEO in

federal district court. Both suits claimed that GEO violated

Washington’s MWA. The court consolidated the actions

and held two trials. A jury found that GEO violated the

MWA and awarded $17,287,063.05 in back pay damages to

the detainee class. After a bench trial, the district court

awarded $5,950,340.00 in unjust enrichment to the State.

The court enjoined GEO from continuing operation of the

VWP without paying Washington’s minimum wage to the

detainees it employed under the VWP. In response, rather

than pay Washington’s minimum wage to the detained

workers, GEO, with the approval of ICE, suspended the

VWP at the NWIPC during the pendency of this litigation.

GEO appealed to this Court. After hearing oral

argument, we certified three questions of state law to the

Washington Supreme Court: (1) whether detained workers

at the NWIPC, a private detention center, are “employees”

within the meaning of the MWA; (2) whether RCW

49.41.010(3)(k), the MWA’s government-institutions

exemption from MWA coverage, applies to work performed

by detainees confined in a private detention facility operated

under a contract with the State; and (3) whether the damages

award to the class forecloses equitable relief to the State in

NWAUZOR V. THE GEO GROUP, INC. 11

the form of an unjust enrichment award. Nwauzor, 62 F.4th

at 516–17.

The Washington Supreme Court answered all three

questions. Nwauzor v. The Geo Group., Inc. (Nwauzor II),

540 P.3d 93 (Wash. 2023). It answered “yes” to the first

question, concluding that the detainees employed by GEO in

its VWP program were employees within the meaning of the

MWA, and that the MWA requires GEO to pay

Washington’s minimum wage to those detainees. It

answered “no” to the second question, concluding that the

MWA government institutions exception “does not apply to

detained workers in private detention facilities regardless of

whether the private entity that owns and operates the facility

contracts with the state or federal government.” Id. at 99. It

answered “no” to the third question, concluding that GEO

may be held liable to the State for unjust enrichment when

detainees employed in the VWP program are paid less than

Washington’s minimum wage.

In its appeal to us, GEO presented five questions. Two

are no longer relevant in light of the responses of the

Washington Supreme Court. The three remaining questions

are: (1) whether Washington’s MWA violates the doctrine

of intergovernmental immunity; (2) whether the MWA is

preempted by federal law; and (3) whether the MWA

violates GEO’s derivative sovereign immunity. These are

questions of law that we review de novo. Hickcox-Huffman

v. U.S. Airways, Inc., 855 F.3d 1057, 1060 (9th Cir. 2017);

In re Hanford Nuclear Rsrv. Litig., 534 F.3d 986, 1000 (9th

Cir. 2008). We conclude that the district court answered all

those questions correctly in granting judgment to the

detainees and the State. Our dissenting colleague contends

that we (and the district court) have answered questions

12 NWAUZOR V. THE GEO GROUP, INC.

(1) and (2) incorrectly. We address the three questions in

turn.

II. Discussion

A. Intergovernmental Immunity

“The Constitution’s Supremacy Clause generally

immunizes the Federal Government from state laws that [1]

directly regulate or [2] discriminate against it.” United

States v. Washington, 596 U.S. 832, 835 (2022) (bracketed

numbers added); see also North Dakota v. United States, 495

U.S. 423, 435 (1990) (plurality opinion) (explaining that

states shall not “regulat[e] the United States directly or

discriminat[e] against the Federal Government or those with

whom it deals,” including private contractors). For purposes

of intergovernmental immunity, federal contractors are not

equivalent to the federal government. Thus, “states may

impose some regulations on federal contractors that they

would not be able to impose on the federal government

itself.” Geo Grp., Inc. v. Newsom, 50 F.4th 745, 760 n.10

(9th Cir. 2022) (en banc).

Case law distinguishes between the two kinds of

intergovernmental immunity. An example of the first kind

of intergovernmental immunity—immunity from direct

regulation—is Boeing Co. v. Movassaghi, 768 F.3d 832 (9th

Cir. 2014), in which a California statute authorized the State

to “‘compel a responsible party . . . to take or pay for

appropriate removal or remedial action necessary to protect

the public health and safety and the environment at the Santa

Susana Field Laboratory site.’” Id. at 839 (quoting Cal.

Health & Safety Code § 25359.20(a)). There was extensive

radioactive contamination at the Santa Susana site. All of

the contamination either was the result of federal activity or

was indistinguishable from the result of such activity. The

NWAUZOR V. THE GEO GROUP, INC. 13

federal government “accepted responsibility for the clean up

of radioactive contamination” at the site and “actively

conduct[ed] the cleanup through its cleanup contractor.” Id.

California law imposed higher cleanup standards on the

federal government than federal law or policy required. We

held that California law improperly imposed direct

regulation on the federal government because a state law

cannot “regulate what [a] federal contractor[] ha[s] to do or

how they d[o] it pursuant to their contracts.” Id. In a later

case, we characterized the California law as “impermissibly

interfer[ing] with federal functions by overriding federal

contracting decisions” as opposed to “merely increas[ing]

the federal government’s costs.” Newsom, 50 F.4th at 760.

An example of the second kind of immunity—immunity

from discriminatory regulation—is United States v.

Washington, 596 U.S. 832 (2022), in which a Washington

statute provided enhanced workers’ compensation benefits

to employees of federal contractors performing cleanup

work at the Hanford nuclear site in eastern Washington.

Washington law allowed workers employed by federal

contractors at Hanford to establish eligibility for benefits

more easily than other workers covered by Washington’s

workers’ compensation law. Because it mandated greater

eligibility for benefits for federal contractors’ Hanford

workers, the law increased the workers’ compensation costs

borne by the federal government compared to the costs borne

by other employers. Id. at 835–36. The Supreme Court held

that the law providing enhanced benefits for the Hanford

workers was improperly discriminatory because it “singl[ed]

out the Federal Government for unfavorable treatment”

compared to similarly situated state and private employers.

Id. at 839.

We address the two kinds of immunity in turn.

14 NWAUZOR V. THE GEO GROUP, INC.

1. Immunity from Direct Regulation

“When a state regulation of a contractor would control

federal operations, enforcement of the substance of the

regulation against the contractors would have the same effect

as direct enforcement against the Government.” Newsom,

50 F.4th at 760 (citation and internal quotation marks

omitted). However, “[t]he scope of a federal contractor’s

protection from state law under the Supremacy Clause is

substantially narrower than that of a federal employee or

other federal instrumentality.” Id. at 755. “Private

contractors do not stand on the same footing as the federal

government, so states can impose many laws on federal

contractors that they could not apply to the federal

government itself.” Id. at 750.

GEO is a private for-profit employer that operates the

NWIPC for its shareholders’ economic gain. The MWA

applies equally to all private employers, including GEO. In

the case before us, the MWA neither controls federal

operations nor dictates the terms of the contract between ICE

and GEO. It requires no action by federal officials. Nor does

it determine the work that detainees may perform.

In evaluating a federal contractor’s claim of

intergovernmental immunity, “courts distinguish regulations

that merely increase the federal government’s costs from

those that would control its operations.” Id. at 755; see also

Boeing, 768 F.3d at 839. Appearing as amicus, the

government argues that direct-regulation intergovernmental

immunity applies here because “[t]here can be no dispute

that if the federal government operated the detention facility

and implemented the Voluntary Work Program directly,

principles of intergovernmental immunity would bar

application of state minimum wage laws to detainees.”

NWAUZOR V. THE GEO GROUP, INC. 15

(Emphasis added.) The problem with the government’s

argument is obvious on its face: The government does not

“operate[] the detention facility.” Nor does it “implement[]

the Voluntary Work Program directly.” Instead, GEO, a

private for-profit company, performs those functions.

In its contract with GEO, the federal government has

chosen to control only some aspects of GEO’s operations at

the NWIPC. The government made a deliberate choice to

dictate to GEO the minimum rate at which it must pay its

detained workers under the VWP. But, critically, it also

made a deliberate choice not to dictate to GEO a maximum

rate at which it may pay those workers. GEO has usually

paid the minimum rate, but in recognition of the fact that its

contract with ICE does not cap the wages it may pay

detainees it has sometimes paid five times that rate. The

government has never objected to GEO so doing. More to

the point, the government has not claimed in this litigation

that GEO violated its contract—or, indeed, any federal

law—in so doing.

Washington’s MWA is analogous to state laws that

impose requirements on federal contractors that the Supreme

Court have upheld as merely increasing the federal

government’s costs. “Absent federal law to the contrary, the

Supremacy Clause . . . leaves considerable room for states to

enforce their generally applicable laws against federal

contractors.” Newsom, 50 F.4th at 755. As we have

explained, a “state law is [not] unconstitutional just because

it indirectly increases costs for the Federal Government, so

long as the law imposes those costs in a neutral,

nondiscriminatory way.” Id. (quoting Washington, 568 U.S.

at 839) (alteration in original). The Washington Supreme

Court has made clear that the MWA imposes minimum wage

standards on private employers in a neutral,

16 NWAUZOR V. THE GEO GROUP, INC.

nondiscriminatory way, irrespective of whether the private

employer is contracting with the federal or state government.

See Nwauzor II, 540 P.3d at 99.

There is a long-standing line of cases holding that states

may impose non-discriminatory taxes on federal contractors

even though those taxes may increase the costs of the

government. See, e.g., South Carolina v. Baker, 485 U.S.

505, 523 (1988); United States v. New Mexico, 455 U.S. 720

(1982). But the principle is not limited to tax cases. See,

e.g., Penn Dairies v. Milk Control Comm’n, 318 U.S. 261

(1943) (upholding state law imposing price control on

federal suppliers even though this may result in increased

costs to the government); James Stewart & Co. v.

Sadrakula, 309 U.S. 94, 104 (1940) (upholding state law

requiring federal contractor to use planking as walkways

even though it “may slightly increase the cost of construction

to the government”).

In Newsom, we struck down a California law that

categorically forbade the federal government to operate

private detention facilities in California. We held that by

categorically forbidding the federal government to use

private contractors, the law impermissibly sought to “control

its operations,” as opposed to merely increasing its costs.

Newsom, 50 F.4th at 755. The case before us is a far cry

from Newsom. Washington’s MWA does not forbid the

federal government to use private contractors to confine civil

detainees. Nor does it impose requirements on private

contractors that conflict with any requirement imposed by

the federal government. It merely requires private

contractors to pay civil detainees Washington’s minimum

wage for work these detainees perform for the benefit of the

contractor.

NWAUZOR V. THE GEO GROUP, INC. 17

The MWA is not comparable to state licensing

requirements that conflict with the federal government’s

requirements and thereby interfere with the government’s

authority to select its contractors. See, e.g., Leslie Miller,

Inc. v. Arkansas, 352 U.S. 187, 188 (1956); Gartrell Const.

Inc. v. Aubry, 940 F.2d 437, 438–39 (1991); Taylor v. United

States, 821 F.2d 1428, 1431–32 (9th Cir. 1987). Nor is it

comparable to a law requiring state approval of federal rates

for a common carrier transporting federal property. See Pub.

Util. Comm’n of State of Cal. v. United States, 355 U.S. 534

(1958). Those impermissible licensing and permitting

regimes involved direct control by the state over federal

government operations. They directly regulated the federal

government by “preventing [the federal government] from

hiring the personnel of its choice” or by dictating the terms

of a federal contract. Newsom, 50 F.4th at 757; see also

Gartrell, 940 F.2d at 438–39.

Washington’s MWA does not interfere with or dictate

federal decisions in the manner of the laws at issue in the

cases just cited. There is nothing—either in federal law or

in GEO’s contract with the federal government—that

prevents GEO from paying Washington’s minimum wage to

its civil detainees who perform work for the benefit of GEO.

Indeed, as we noted above, GEO’s contract with ICE

explicitly requires it to comply with “state labor laws and

codes.” The contract does not exclude minimum wage laws

from its definition of state labor laws and codes. Further, a

former GEO detention officer testified at trial that GEO was

free to add fully paid positions to its staff at the NWIPC

without a contract modification, and that GEO often did so

with the understanding that it would not be reimbursed by

the federal government for the cost of those additional

positions.

18 NWAUZOR V. THE GEO GROUP, INC.

If GEO were able to renegotiate a higher rate with the

federal government so as to retain its current level of profit

while also complying with the MWA, this would indirectly

increase costs to the federal government. At this time, there

has been no renegotiation, and we are unable to predict the

outcome of such renegotiation. However, we note that

financial data in the record suggest that even after complying

with Washington’s MWA GEO could still profit

substantially from operating the NWIPC under its current

contract. At trial, the class of detained employees won a

verdict of $17,287,063.05 for failure to pay Washington’s

minimum wage for work from 2014 through 2021. That

figure divided by seven years equals just under $2,500,000

per year. GEO’s gross profit from managing the NWIPC

between 2010 and 2018 ranged between $18.6 million and

$23.5 million per year. Subtracting $2.5 million from

GEO’s profits during those years would allow GEO—even

operating under its current contract—to retain a profit

margin of roughly $16 to $21 million per year while

complying with the MWA.

In sum, we agree with the district court’s conclusion that

“[a]pplication of the [MWA] does not mandate the way in

which GEO runs the [VWP]” or “replace or add to the

contractual requirements . . . GEO [must] fulfill in running

the [P]rogram.” That is, a requirement that GEO pay its

detained workers in compliance with Washington’s MWA

does not directly regulate the federal government. Even if

the government does ultimately pay more under future

contracts with GEO as a result of GEO’s compliance with

the MWA, such indirect effect would not violate the

principle of intergovernmental immunity.

NWAUZOR V. THE GEO GROUP, INC. 19

2. Immunity from Discriminatory Regulation

A state law or regulation discriminates against the

federal government if it treats comparable classes of federal

and state employees differently, advantaging the state

employees. Dawson v. Steager, 586 U.S. 171, 175–76

(2019). GEO and the federal government point to Wash.

Rev. Code § 49.46.010(3)(k), which exempts “resident,

inmate, or patient” employees of Washington government

institutions from coverage under the MWA. A covered

“employee” under the MWA “includes any individual

employed by an employer but shall not include: . . . [a]ny

resident, inmate, or patient of a state, county, or municipal

correctional, detention, treatment, or rehabilitative

institution.” Id. (emphasis added). That is, the MWA does

not apply to residents, inmates, or patients of institutions

operated by Washington State governmental entities. The

statute contains no comparable exemption for residents,

inmates or patients in federally operated institutions.

GEO and the government argue that Washington’s

MWA discriminates because it treats the federal government

differently from the state government. If the federal

government operated the NWIPC directly, and if

Washington sought to apply its MWA to employees of the

federal government working in the NWIPC, this would be a

good argument. But that hypothetical case is not the case

before us. In the case before us, the federal government does

not operate the NWIPC. Nor does it employ civil detainees

at the NWIPC. GEO does those things. Thus, the question

presented is not whether the MWA treats differently

facilities operated by the federal and state governments.

Rather, the question is whether the MWA treats private

facilities operated under contract with the federal

20 NWAUZOR V. THE GEO GROUP, INC.

government differently from private facilities operated

under contract with the state government.

The Washington Supreme Court’s response to our

second certified question provides the answer. The Court

wrote that the exemption from coverage under the MWA

does not apply to detained workers in private facilities

operating under contract with either the state or federal

government. See Nwauzor II, 540 P.3d at 99. Specifically,

the Court wrote that the exemption “does not apply to

detained workers in private detention facilities regardless of

whether the private entity that owns and operates the facility

contracts with the state or federal government.” Id. The

Court emphasized that the critical distinction under the

statute is between publicly and privately run institutions, not

between federal and state institutions. According to the

Washington Supreme Court, privately run detention

facilities—whether operated under contract with the federal

or the state government—are simply not included in the

exemption from the MWA. Both are subject to the MWA.

That is, privately run detention facilities are treated equally,

regardless of “whether the institution is operated pursuant to

a contract with the federal or state government.” Id. at 100.

Our dissenting colleague asks a different question from

the question presented by this case. He writes, “This case

involves a simple question: whether Washington can force a

federal contractor operating an immigration detention

facility to pay a higher minimum wage than its contract with

the federal government requires when Washington does not

require the same of detention facilities it operates.” Dissent

at 36. Our colleague asks the wrong question. He does not

ask whether Washington’s MWA treats equally apples and

apples. That is, he does not ask whether the MWA treats

equally private employers who have contracted with the state

NWAUZOR V. THE GEO GROUP, INC. 21

and private employers who have contracted with the federal

government. Instead, our colleague asks whether the MWA

treats equally apples and oranges. That is, he asks whether

the MWA treats equally state employers, on the one hand,

and private employers who have contracted with the federal

government, on the other. Because our colleague asks the

wrong question, he gets the wrong answer.

Our colleague relies on the Supreme Court’s decision in

Dawson to support his conclusion. But Dawson supports our

holding rather than his dissent. Plaintiff Dawson was a

retired U.S. Marshal. His home state of West Virginia taxed

as income the retirement benefits of all retired federal

employees, but it did not tax as income the benefits of certain

retired state law enforcement employees. Dawson

contended that West Virginia should treat him in the same

manner as it treated the retired state law enforcement

employees. The Supreme Court agreed, holding that West

Virginia was required to give the same tax benefit to Dawson

as it gave to the retired state law enforcement employees

because “there aren’t any ‘significant differences’ between

Mr. Dawson’s former job responsibilities and those of the

tax-exempt state law enforcement retirees.” Dawson, 586

U.S. at 175.

Dawson allows the application of the MWA to GEO’s

VWP. The question in Dawson was whether retired federal

law enforcement employees were improperly discriminated

against as compared to retired state law enforcement

employees. Dawson’s holding requires a comparison

between the employees of the federal and state governments

to ensure that similarly situated federal and state employees

are treated equally. Dawson does not require, and should not

be expanded to require, that employees of the government

and employees of private institutions be treated equally.

22 NWAUZOR V. THE GEO GROUP, INC.

The Washington Supreme Court made clear, in its

answer to our second certified question, that the MWA treats

equally the employees of state and federal government

institutions. The exception to the MWA applies to both. But

that exception does not apply to employees of private

institutions operated under contract with either the state or

the federal government. That is, the exception “does not

apply to detained workers in private detention facilities

regardless of whether the private entity that owns and

operates the facility contracts with the state or federal

government.” Nwauzor II, 540 P.3d at 99. The government

institutions exception “applies only to workers detained in a

government institution.” Id. (emphasis added). The MWA

applies equally to all private institutions regardless of

whether they are contracting with the state or federal

government. Id.

We have long recognized, in many contexts, that there

are “significant differences” between federal and state

government entities, on the one hand, and private companies

that contract with those governmental entities, on the other.

There are many examples. Federal government entities are

presumptively entitled to sovereign immunity, but private

companies that contract with the government do not have

sovereign immunity unless their conduct was dictated and

controlled by the federal government. See Campbell-Ewald

Co. v. Gomez, 577 U.S. 153 (2016). Federal entities have a

presumptive intergovernmental tax immunity, but private

contractors do not share that immunity unless their conduct

is “so closely connected to the Government that the two

cannot realistically be viewed as separate entities, at least

insofar as the activity being taxed is concerned.” New

Mexico, 455 U.S. at 735. For purposes of the Fourteenth

Amendment’s state action requirement, acts performed by

NWAUZOR V. THE GEO GROUP, INC. 23

“private contractors do not become acts of the [state]

government by reason of their significant or even total

engagement in performing public contracts.” Rendell-Baker

v. Kohn, 457 U.S. 830, 841 (1982). Federal officers can use

the federal-officer removal statute, but employees of a

company contracting with the federal government cannot

use the statute unless they demonstrate that they are

“common-law agents” of the government. DeFiore v. SOC

LLC, 85 F.4th 546, 556 (9th Cir. 2023). In the context of

qualified immunity, the Supreme Court has emphasized the

difference between “[g]overnment-employed prison guards”

and “prison guards who are employees of a private prison

management firm,” holding that only government-employed

guards are entitled to qualified immunity. Richardson v.

McKnight, 521 U.S. 399, 405, 401 (1997).

According to our dissenting colleague, Dawson

“suggests” that we should compare state entities to private

entities that contract with the federal government. Dissent

at 42. The dissent characterizes Dawson as suggesting that

“the relevant question isn’t whether [the NWIPC is]

similarly situated to [other private employers covered by the

MWA]; the relevant question is whether [it is] similarly

situated to those who [are exempt from the MWA].” Id.

(quoting Dawson, 586 U.S. at 178; bracketed language

supplied by the dissent). The dissent goes on:

The relevant comparison in Dawson was

between state employees, who received the

benefit, and federal employees, who did not.

Dawson, 586 U.S. at 178. Applied to the

MWA, Dawson requires equal treatment

between Washington state facilities, which

24 NWAUZOR V. THE GEO GROUP, INC.

receive the benefit, and the NWIPC, a federal

facility, which does not.

Id. at 42 n.5 (emphasis added). In both of these passages,

the dissent insists on comparing the NWIPC, a privately

operated facility, to facilities operated by Washington State.

In so insisting, the dissent refuses to acknowledge the

obvious. Contrary to what the dissent writes, the NWIPC is

not a “federal facility,” comparable to “Washington state

facilities.” Rather, it is a private facility, operated under

contract with the federal government.

Our dissenting colleague’s interpretation of Dawson

would improperly expand the intergovernmental immunity

doctrine. Our colleague’s interpretation would provide to

private, for-profit entities the same intergovernmental

immunity protection enjoyed by the federal government

when those entities are merely contracting with the federal

government. This reading of Dawson is inconsistent with

Geo Group, Inc. v. Newsom, where we recently explained

that “states may impose regulations on federal contractors

that they would not be able to impose on the federal

government itself.” 50 F.4th at 760 n.10 (en banc) (citing

Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738,

867 (1824); United States v. New Mexico, 455 U.S. 720, 735

n.11 (1982)).

Our colleague also relies on United States v. California,

921 F.3d 865 (9th Cir. 2019). Dissent at 44. The case before

us is poles apart from that case. In United States v.

California, the federal government challenged a California

statute that required state review of “facilities in which

noncitizens are being housed or detained for purposes of

civil immigration proceedings in California.” Id. at 882

(quoting Cal. Gov’t Code § 12532(a)). The statute

NWAUZOR V. THE GEO GROUP, INC. 25

specifically required review by state officials of “the

‘standard of care and due process provided to’ detainees, and

‘the circumstances around their apprehension and transfer to

the facility.’” Id. at 882–83 (quoting Cal. Gov’t Code

§ 12532(b)(1)). We wrote, “These additional requirements

burden federal operations, and only federal operations.” Id.

at 883. That is, these requirements did not apply to state

facilities that housed or detained noncitizens; they applied

only to federal facilities that performed those functions.

Because of the differential treatment, we held that the

California statute violated the doctrine of intergovernmental

immunity. In contrast to the statute at issue in United States

v. California, Washington’s MWA does not apply

differently to private facilities employing civil detainees

depending on whether the facility is operating pursuant to a

contract with the state or a contract with the federal

government. Instead, the MWA applies equally to such

facilities.

Our dissenting colleague reads an excerpt from

Washington Department of Labor and Industries guidance as

suggesting that a privately operated detention facility

contracting with Washington is exempt from the MWA.

Dissent at 40–41. The Washington Supreme Court,

however, relied on precisely this guidance to conclude that

such a privately operated detention facility is not exempt

from the MWA. See Nwauzor II, 540 P.3d at 99–100. The

guidance specifies that “residents, inmates, or patients of a

state, county or municipal correctional detention, treatment

or rehabilitative institution assigned by facility officials to

work on facility premises for a private corporation at rates

established and paid for by public funds are not employees

of the private corporation and would not be subject to the

MWA.” Id. (quoting Wash. State Dep’t of Lab. & Indus.

26 NWAUZOR V. THE GEO GROUP, INC.

Policy No. ES.A.1, § 5(k), Minimum Wage Applicability

(Dec. 29, 2020) (emphasis added by the Washington

Supreme Court)). In its answer to our certified question, the

Washington Supreme Court emphasized that the guidance

used the words “assigned by facility officials to work on

facility premises.” Relying on this language, the Court

interpreted the guidance as applying only to MWA

exemptions of government-operated facilities. See id. Thus,

according to the Court, the guidance indicates that privately

operated facilities are not exempt from the MWA.

The Washington Supreme Court was explicit in saying

that the MWA treats equally employees of private facilities

operated pursuant to contracts with the state and the federal

governments. According to that Court, both sets of

employees are covered by the MWA. It is true that at this

time there is no such private facility operating pursuant to a

contract with the State. But the Court stated clearly, in

answer to our second certified question, that Washington’s

MWA would apply to a private detention facility operating

under contract with the State. We have no reason to

disbelieve the Washington Supreme Court when it writes

that Washington’s MWA would apply equally to such a

facility.

Our dissenting colleague asks us to disregard the

considered opinion of the Washington Supreme Court. Our

colleague states accurately that at this time there is no private

detention facility operating under contract with the State.

From that undisputed fact, he argues that we should ignore

the opinion of the Washington Supreme Court on a question

of Washington law. We disagree. When we have asked a

question to that Court, and have received its answer, we are

not free to disregard that answer. To disregard the

considered opinion of the Washington Supreme Court on a

NWAUZOR V. THE GEO GROUP, INC. 27

question of law of that State, when we have asked for that

very opinion, is not only disrespectful to that Court but is

also contrary to the principles of federalism upon which our

Constitution is based.

Finally, during the pendency of this appeal, the parties

brought to our attention United States v. King County, No.

23-35362, ___F.4th___, 2024 WL 4918128 (9th Cir. Nov.

29, 2024), in which we held that an executive order of King

County, Washington, barring private servicing of charter

flights used for deportations at a local airport violated the

intergovernmental immunity doctrine. Id. at *9–11. We

held that the executive order effectively banned the federal

government from using privately contracted flights for

deportations at the local airport and discriminated directly

against the United States by singling out the federal

government and its contractors for unfavorable treatment.

Id. at *10.

King County is consistent with our holding today. As

explained above, the MWA neither improperly regulates

federal operations nor discriminates against the federal

government and its contractors. The King County executive

order targeted specific kinds of flights, effectively

preventing the federal government from using private

contractors for deportations at the local airport (improper

direct regulation) and applied only to private companies

contracting with the federal government (improper

discrimination). Id. at *9–11. The executive order was

comparable to the laws struck down in Newsom v. Geo

Group and United States v. California rather than to the

MWA. In contrast to the laws in those cases, the MWA is a

generally applicable statute that for over sixty years has

required private institutions in Washington State to pay their

workers minimum wage. See Nwauzor II, 540 P.3d at 99.

28 NWAUZOR V. THE GEO GROUP, INC.

B. Preemption

Federal law preempts state law when a party cannot

comply with both federal and state law, or when state law

poses an “obstacle to the accomplishment and execution of

the full purposes and objectives of Congress.” Nat’l Fed’n

of the Blind v. United Airlines Inc., 813 F.3d 718, 724 (9th

Cir. 2016) (citation omitted). There is a presumption against

preemption “when a state regulates in an area of historic state

power.” Knox v. Brnovich, 907 F.3d 1167, 1174 (9th Cir.

2018) (citation omitted). As relevant here, the States’

historic police powers include “[t]he power to regulate

wages and employment conditions.” RUI One Corp. v. City

of Berkeley, 371 F.3d 1137, 1150 (9th Cir. 2004). States

“possess broad authority under their police powers to

regulate the employment relationship to protect workers

within the State.” Id. (citation omitted).

Once triggered, the presumption against preemption

applies “even if the law ‘touch[es] on’ an area of significant

federal presence.” Knox, 907 F.3d at 1174. The

presumption applies to state laws that affect areas of

exclusive federal regulation, such as immigration, even if

they have “incidental effects in an area of federal interest.”

DeCanas v. Bica, 424 U.S. 351, 355 (1976) (“[T]he Court

has never held that every state enactment which in any way

deals with [noncitizens] is a regulation of immigration and

thus per se preempted by this constitutional power.”); Puente

Ariz. v. Arpaio, 821 F.3d 1098, 1104 (9th Cir. 2016)

(“[W]hile the [challenged] laws certainly have effects in the

area of immigration, the text of the laws regulate for the

health and safety of the people of Arizona.”).

The MWA falls squarely within the states’ historic police

powers to establish and require payment of a minimum

NWAUZOR V. THE GEO GROUP, INC. 29

wage. The fact that the MWA applies to civil detainees

working in an immigration detention center operated by a

private for-profit company does not transform it into a law

that has more than an incidental effect on immigration.

Knox, 907 F.3d at 1177; DeCanas, 424 U.S. at 355; Puente

Ariz., 821 F.3d at 1104. We therefore apply the presumption

against preemption.

To overcome the presumption against preemption, the

challenging party must show a “clear and manifest purpose

of Congress” to preempt state law. Arizona v. United States,

567 U.S. 387, 400 (2012) (internal citations omitted). GEO

and the government attempt to show a “clear and manifest

purpose” by arguing that in two statutes Congress showed its

intent to preempt the application of the MWA to civil

detainees held in private for-profit detention centers.

Neither argument is persuasive.

First, GEO and the government cite a statute enacted in

1950 providing that “[a]ppropriations . . . shall be available

for . . . payment of allowances (at such rate as may be

specified from time to time in the appropriation Act

involved) to aliens, while held in custody under the

immigration laws, for work performed.” 8 U.S.C. § 1555.

This statute empowers Congress to appropriate funds to ICE

to pay allowances to detainees who perform work while

detained. The statute imposes no limit on the amount that

may be appropriated. Nor does it impose any limit on the

amount that may be paid to a detained worker. Finally, in

enacting the statute, Congress could not have had in mind

payment of civil detainees held in private facilities operated

by for-profit companies because privately run immigration

detention centers did not exist until the 1980s, thirty years

after the statute was enacted.

30 NWAUZOR V. THE GEO GROUP, INC.

Second, GEO and the government cite a congressional

appropriations act from the late 1970s. In that act, Congress

appropriated funds to the precursor agency to ICE “at a rate

not in excess of $1 per day” for compensating detained

workers. Department of Justice Appropriations Act, 1979,

Pub. L. No. 95-431, 92 Stat. 1021 (1978). In the same act,

Congress authorized other uses for the appropriated funds,

including leasing aircraft, “tracking lost persons,” hiring

security guards, “attend[ing] firearms matches,” and

providing allowances to immigrants in custody. The act is

no longer in force. “As a general rule of thumb,

appropriations acts are in force during the fiscal year of the

appropriation and do not work a permanent change in the

substantive law.” Seattle Audubon Soc’y v. Evans, 952 F.2d

297, 304 (9th Cir. 1991). Congress did not reenact this

provision in a subsequent bill, and the text of the

appropriation specified that it would lapse. See Department

of Justice Appropriations Act, 1979, Pub. L. No. 95-431, 92

Stat. 1021, 1021 (1978) (“An Act making

appropriations . . . for the fiscal year ending September 30,

1979.”).

But even if the act were currently in force, it would not

help GEO. GEO contends in its brief that the act forbids it

to pay its detainees more than $1.00 per day. It writes,

“[T]he maximum rate of payment for ‘work performed’ by

‘aliens, while held in custody under the immigration laws,’

is $1 per day.” GEO is clearly incorrect. It is uncontested

that GEO has paid its civil detainees at up to five times the

rate it is now claiming is the maximum permitted rate, and

that ICE has never objected to its doing so. The government

explicitly disagrees with GEO on this point. The

government correctly concedes in its amicus brief that the

act, if still in force, would not forbid GEO from paying more

NWAUZOR V. THE GEO GROUP, INC. 31

than $1.00 per day. The act merely provided that the

government would not reimburse payments in excess of that

amount.

Further, even if the act were currently in force, it would

appropriate funds to ICE only to pay civil detainees held in

government facilities. The act did not and would not, if it

were still in force, address payment of civil detainees held

by private, for-profit contractors. Nothing indicates that

Congress intended, during the period the act was in force,

much less in perpetuity, to limit wages paid to such workers

and to preempt a state minimum wage requirement

applicable to private contractors that employ such workers.

The federal government as amicus makes an additional

argument not made by GEO. The government speculates

that compelling private contractors to pay state-mandated

minimum wage to detained workers will result in financial

disparities among detainees, and that such disparities could

lead to unrest in detention facilities. The government further

speculates that private contractors may scale back or

eliminate the VWP due to the increased financial burdens

associated with paying detained workers the state-mandated

minimum wage. The government argues that these possible

effects would impermissibly interfere with the

accomplishment of Congress’s goal in authorizing the VWP.

Whether or not the government’s speculations will be borne

out is, on the record before us, unknowable. We are aware

that, with the permission of the government, GEO has

suspended the VWP at the NWIPC during the pendency of

this litigation. However, we see nothing in this litigation-

specific response to indicate what the long-term

consequences will be if GEO is required to pay

Washington’s MWA to its civil detainees held at the

NWIPC.

32 NWAUZOR V. THE GEO GROUP, INC.

Our dissenting colleague disagrees with our analysis. He

contends that Washington’s MWA is preempted because it

poses an “‘obstacle to the accomplishment and execution of

the full purposes and objectives of Congress.’” Dissent at

49–50 (quoting Newsom, 50 F.4th at 758 (quoting United

States v. California, 921 F.3d at 879)). It is true that

requiring GEO to pay Washington’s minimum wage to its

civil detainees who perform work for GEO at the NWIPC

may result in the federal government paying more to GEO,

if and when its contract for the NWIPC is renewed. That is,

the rate paid under the new contract may take into account

the expense to GEO of paying Washington’s minimum wage

to its civil detainee employees.

It is, of course, true for all federal contractors that the

federal government takes into account, when setting contract

rates, the expenses the contractor will incur. If a federal

contractor is required to pay state minimum wage to its

employees, the cost of the contract to the government is

likely to reflect that fact. The parties have not cited a case—

and we are aware of none—holding that state minimum

wage laws may not apply to federal contractors.

However, our dissenting colleague contends that the

federal contractor in this case is different from other federal

contractors. He points out that regulation of immigration is

an important and quintessential federal function, and

contends that the federal government should therefore be

spared the expense of entering into a contract when its

contractor would be required to comply with Washington’s

minimum wage law. We agree with our colleague that

regulation of immigration is an important and quintessential

federal function. But so are other federal functions, such as,

for example, designing and building aircraft and ships for

our national defense. State minimum wage laws are

NWAUZOR V. THE GEO GROUP, INC. 33

routinely applied to federal defense contractors. No one,

including our dissenting colleague, has ever suggested that

the application of a state minimum wage law to federal

defense contractors is an “obstacle to the accomplishment

and execution of the full purpose and objectives of

Congress.”

C. Derivative Sovereign Immunity

Derivative sovereign immunity protects a private entity

that has contracted with the federal government, provided

that the government acted within its constitutional authority

and that the government has specifically authorized the

contractor’s actions at issue. Campbell-Ewald Co., 577 U.S.

at 167; Boyle v. United Technologies Corp., 487 U.S. 500,

506 (1988); Yearsley v. W.A. Ross Const. Co., 309 U.S. 18,

21 (1940).

We have characterized the government contractor

defense as “allow[ing] a contractor-defendant to receive the

benefits of sovereign immunity when a contractor complies

with the specifications of a federal government contract.” In

re Hanford Nuclear, 534 F.3d at 1000 (9th Cir. 2008) (citing

Boyle, 487 U.S. at 511–12). A contractor whose challenged

conduct is not dictated by its contract with the government,

but is rather within the contractor’s discretion, is not entitled

to derivative sovereign immunity. Cabalce v. Thomas E.

Blanchard & Assocs., Inc., 797 F.3d 720, 732 (9th Cir.

2015). In Cabalce, we held that a private company with a

government contract to store fireworks was not entitled to

derivative sovereign immunity where the record did not

show that the company “‘had no discretion’ in devising the

destruction plan for the fireworks” and it was “undisputed

that [the contractors] designed the destruction plan without

34 NWAUZOR V. THE GEO GROUP, INC.

government control or supervision.” Id. at 732 (quoting

Hanford, 534 F.3d at 1001).

GEO’s argument that it is entitled to derivative sovereign

immunity fails on two grounds.

First, GEO’s contract with ICE does not forbid GEO to

comply with Washington’s MWA. Indeed, the plain

language of the contract requires quite the opposite. As

noted above, the contract requires GEO to comply with “all

applicable federal, state, and local laws and standards,”

including “labor laws and codes.” It specifies that if “a

conflict exist[s] between [federal and local] standards, the

most stringent standard shall apply.” The plain meaning of

state “labor laws and codes” includes state minimum wage

laws. Only an explicit exclusion of minimum wage laws

from the definition of “labor laws and codes” would allow

us to conclude that minimum wage laws are not included.

There is no such exclusion in the contract. Finally, the

contract provides, “Subject to existing law, regulations

and/or other provisions of this contract, illegal or other

undocumented aliens will not be employed by the

Contractor, or with this contract.” (Emphasis added.) This

provision does not exclude state labor laws and codes from

its definition of “existing law.” Nor does it negate the “other

provision[] of this contract” that allows GEO to offer paid

employment to undocumented noncitizen detainees at the

NWIPC. We therefore conclude that the plain language of

the contract requires GEO to pay its civil detainees

Washington’s minimum wage so long as the MWA is

“applicable.” In response to our certified question, the

Washington Supreme Court wrote that Washington’s MWA

is applicable to work performed by civil detainees held by

GEO at the NWIPC.

NWAUZOR V. THE GEO GROUP, INC. 35

Second, even if the contract did not require GEO to pay

its detainees in accordance with Washington’s MWA, there

is nothing in the contract that would forbid GEO to do so.

The contract sets a minimum compensation of $1 per day,

but it does not forbid payments in excess of that amount.

GEO chose to exceed that amount, without objection from

the government, by paying up to $5 per day whenever

necessary to persuade detainees to participate in the VWP.

GEO could equally well have chosen, consistent with the

contract, to exceed that amount by paying workers

Washington’s minimum wage.

Conclusion

We hold that the application of Washington’s MWA to

civil detainees held in GEO’s privately operated federal

detention center does not violate the doctrine of

intergovernmental immunity. Further, we hold that

Washington’s MWA is not preempted by federal law.

Finally, we hold that GEO does not have derivative

sovereign immunity under the government contractor

defense.

We affirm the judgment of the district court.

36 NWAUZOR V. THE GEO GROUP, INC.

BENNETT, Circuit Judge, dissenting:

This case involves a simple question: whether

Washington can force a federal contractor operating an

immigration detention facility to pay a higher minimum

wage than its contract with the federal government requires

when Washington does not require the same of detention

facilities it operates. The majority holds that Washington

can do so. Because I believe that Washington’s Minimum

Wage Act (MWA) violates the Supremacy Clause and is

preempted by federal immigration law, I respectfully

dissent.

I. The MWA violates the Supremacy Clause and is

unconstitutional as applied to the Northwest

Immigration and Customs Enforcement Processing

Center.

On August 22, 2019, the United States filed a statement

of interest before the district court arguing that “[b]asic

constitutional principles prevent a State from interfering

with the federal government’s activities in the way

Washington is trying to do here.” DOJ Statement of Interest

at 1, Nwauzor v. GEO Grp., Inc., No. 17-cv-05769 (W.D.

Wash. Aug. 20, 2019), ECF No. 185. Nearly five years later,

on February 21, 2024, the United States filed an amicus brief

before this court maintaining its argument that “[a]pplication

of the [MWA] also[1] independently contravenes

intergovernmental immunity because it would make federal

detainees subject to provisions that do not apply, and never

1

As discussed below, the United States’s 2024 amicus brief reiterates its

argument before the district court that the MWA is also preempted. DOJ

Amicus Br. at 12, ECF No. 114.

NWAUZOR V. THE GEO GROUP, INC. 37

have applied, to persons in state custody.” DOJ Amicus Br.

at 2. I agree with the United States that applying the MWA

to The GEO Group, Inc. (GEO) here is both unconstitutional

and preempted.

The MWA prescribes a minimum wage that must be paid

to all “employees” in the State. Wash. Rev. Code

§ 49.46.020. Now that wage is $16.28 per hour. See id.

§ 49.46.020(2)(b). GEO contracted with Immigration and

Customs Enforcement (ICE) to provide “detention

management services” at the Northwest ICE Processing

Center (NWIPC) in Tacoma, Washington. As part of that

contract, GEO agreed to abide by ICE’s Performance-Based

National Detention Standards (PBNDS). The PBNDS

require that GEO offer detainees the opportunity to

participate in the Voluntary Work Program (VWP).

Congress created the VWP to reduce the “negative

impact of confinement . . . through decreased idleness,

improved morale and fewer disciplinary incidents,” while

also allowing detainees to earn money. Performance-Based

National Detention Standards § 5.8, at 405 (ICE 2016). The

VWP provides substantial benefits to participating

detainees. As GEO notes, detainees can earn money to pay

for “calls to family and friends,” build a more personalized

relationship with security staff, experience a “change of pace

and location in an otherwise necessarily restricted area,” and

acquire valuable work experience that detainees can

leverage to their advantage in finding post-detention

employment. The VWP is voluntary: “Detainees shall be

able to volunteer for work assignments but otherwise shall

not be required to work, except to do personal

housekeeping.” Performance-Based National Detention

Standards § 5.8, at 405 (ICE 2016). Before this lawsuit,

38 NWAUZOR V. THE GEO GROUP, INC.

between 200 and 500 detainees at NWIPC participated in the

VWP program and received its benefits.2

The Supremacy Clause, through a doctrine known as

intergovernmental immunity, “prohibit[s] States from

interfering with or controlling the operations of the Federal

Government.” United States v. Washington (Washington I),

596 U.S. 832, 838 (2022). Originally, intergovernmental

immunity barred any state law whose “effect . . . was or

might be to increase the cost to the Federal Government of

performing its functions,” including laws that increased the

costs to federal contractors. United States v. County of

Fresno, 429 U.S. 452, 460 (1977). Now, however, a state

law is “no longer unconstitutional just because it indirectly

increases costs for the Federal Government, so long as the

law imposes those costs in a neutral, nondiscriminatory

way.” Washington I, 596 U.S. at 839 (emphasis added).

State laws applied to federal contractors are

unconstitutionally discriminatory if they “single[] out

contractors” for less favorable “treatment,” Washington v.

United States (Washington II), 460 U.S. 536, 546 (1983), or

if they unfavorably regulate contractors based on their

governmental “status,” North Dakota v. United States, 495

U.S. 423, 438 (1990) (plurality opinion); see Washington I,

596 U.S. at 839 (adopting North Dakota’s discrimination

analysis). “[W]hat matters isn’t the intent lurking behind the

law but whether the letter of the law treats those who deal

with the federal government as well as it treats those with

whom the State deals itself.” Dawson v. Steager, 586 U.S.

2

As discussed below, because of the district court’s ruling, the VWP at

the NWIPC has been suspended since October 28, 2021.

NWAUZOR V. THE GEO GROUP, INC. 39

171, 177 (2019) (cleaned up) (quoting Phillips Chem. Co. v.

Dumas Indep. Sch. Dist., 361 U.S. 376, 385 (1960)).

The MWA expressly exempts “[a]ny resident, inmate, or

patient of a state, county, or municipal correctional,

detention, treatment or rehabilitative institution.” Wash.

Rev. Code § 49.46.010(3)(k). The MWA thus facially treats

the federal government differently because it does not

include federal facilities in its list of exemptions. Even if

Washington intends for the MWA to apply equally to all

private employers, including hypothetical private operators

of state detention facilities, the effect of the letter of the law

is to treat the federal government differently than

Washington treats itself. Putting this effect in context,

Washington caps its own labor programs at paying detainees

a rate that “will not exceed $40 per week.” Wash. State

Dep’t of Corr., Policy No. 700.100 at 3, Class III Work

Programs (Oct. 6, 2023). If a detainee in a state facility in

Washington works 40 hours per week, the detainee is

entitled to no more than $40. The effect of the majority’s

opinion is that an NWIPC detainee working the same 40

hours per week would be entitled to more than $640—a more

than 1500% increase over what Washington would pay its

detainees—solely because the NWIPC detainee is housed in

a facility operated by a federal contractor.

The majority’s rejoinder that the MWA is neutral and

generally applicable to all private employers—that is, not

based on an employer’s affiliation with the federal

government—is unpersuasive because the statute’s

application to GEO has the clear effect of targeting only the

federal government.

Washington conceded at oral argument that nothing in

the record suggests that any detention facility in Washington

40 NWAUZOR V. THE GEO GROUP, INC.

other than NWIPC will be subject to the MWA. Oral Arg.

at 27:40–28:55. And the record was developed so that if

there were such a facility, it would have been brought to the

district court’s attention. All evidence before us indicates

that the NWIPC federal detention facility is the only

detention facility in Washington subject to the MWA.

Moreover, guidance from the Washington State

Department of Labor and Industries suggests that even were

there a privately operated state-run detention facility, those

private operators would be exempt from the MWA.3 Wash.

State Dep’t of Lab. & Indus., Policy No. ES.A.1, § 5(k),

Minimum Wage Act Applicability (Dec. 29, 2020). This

guidance underscores that Washington is singling out only

federal detention facilities for MWA coverage. The majority

contends that the Washington Supreme Court specifically

addressed the Washington State Department of Labor and

Industries guidance and found that a hypothetical privately-

operated state immigration facility would not be exempt

from the MWA. Maj. at 25–27. But the Washington

Supreme Court’s hypothetical does not modify what the

Washington State Department of Labor and Industries said

and, more importantly, does not alter the reality that there

3

The Department of Labor and Industries has determined that:

Residents, inmates or patients of a state, county or

municipal correctional detention, treatment or

rehabilitative institution assigned by facility officials

to work on facility premises for a private corporation

at rates established and paid for by public funds are not

employees of the private corporation and would not be

subject to the MWA.

Wash. Dep’t of Lab. & Indus., Policy No. ES.A.1, § 5(k), Minimum

Wage Act Applicability, (Dec. 29, 2020).

NWAUZOR V. THE GEO GROUP, INC. 41

are presently no private state facilities that meet this

hypothetical.

Put simply, if the NWIPC were run by Washington, the

facility would not be forced to pay detainees the minimum

wage set by the MWA. But because NWIPC is run by a

federal contractor, the facility must pay that minimum wage.

The majority asserts the question posed here would be

different “[i]f the federal government operated the NWIPC

directly, and if Washington sought to apply its MWA to

employees of the federal government working in the

NWIPC,” Maj. at 19, but the only reason GEO must abide

by the MWA is because it is a federal contractor. The MWA,

as interpreted by the majority, punishes the federal

government for its policy choice to use private contractors

and treats the federal government differently from state

facilities. That is the very definition of a state affording itself

better treatment than it affords the United States. This

violates the Supremacy Clause.4

4

The majority claims the MWA does not “dictate[] the terms of the

contract between ICE and GEO. It requires no action by federal officials.

Nor does it determine the work that detainees may perform.” Maj. at 14.

The majority contends that the MWA “is analogous to state laws that

impose requirements on federal contractors that the Supreme Court ha[s]

upheld as merely increasing the federal government’s costs.” Maj. at 15.

But this claim highlights the constitutional flaw in the majority’s

holding. The only detention facility to which the MWA applies is the

only one that is operated by a federal contractor, and the federal

government can either maintain the status quo and pay the over 1500%

increase in labor costs GEO will incur or cease the use of federal

contractors in Washington. As Washington has acknowledged, if the

federal government operated the NWIPC, it could not dictate the wages

paid to detainees. So either Washington is forcing a federal contractor

to pay more just because it is a federal contractor, or it is forcing the

42 NWAUZOR V. THE GEO GROUP, INC.

Caselaw from both the Supreme Court and our court is

illustrative. In Dawson v. Steager, the Supreme Court struck

down a law that “treat[ed] retired state employees more

favorably than retired federal employees [when] no

significant differences between the two classes justif[ied] the

differential treatment.” Dawson, 586 U.S. at 175 (internal

quotation marks omitted) (quoting Davis v. Mich. Dep’t of

Treasury, 489 U.S. 803, 814–16 (1989)). Here, there is no

question that Washington treats the NWIPC worse than it

treats its own detention facilities. Indeed, Dawson suggests

that “the relevant question isn’t whether [the NWIPC is]

similarly situated to [other private employers covered by the

MWA]; the relevant question is whether [it is] similarly

situated to those who [are exempt from the MWA].”5 Id. at

178. Thus, the “relevant question” is whether the NWIPC is

similarly situated to Washington’s own detention facilities

exempt under the MWA.

Under this lens, the NWIPC is no different from the

detention facilities operated by Washington. Although GEO

federal government to change how it operates the NWIPC. Putting the

United States to this choice violates the Supremacy Clause.

5

The majority argues that “Dawson does not require, and should not be

expanded to require, that employees of the government and employees

of private institutions be treated equally.” Maj. at 21. My application of

Dawson does not expand its scope. The relevant comparison in Dawson

was between state employees, who received the benefit, and federal

employees, who did not. Dawson, 586 U.S. at 178. Applied to the

MWA, Dawson requires equal treatment between Washington state

facilities, which receive the benefit, and the NWIPC, a federal facility,

which does not. The Supreme Court in Dawson even provided an

example when it had previously “compared the class of federal lessees

with the favored class of state lessees, even though the State urged [it] to

focus instead on the disfavored class of private lessees.” Id. at 178–79

(citing Phillips, 361 U.S. at 381–82).

NWAUZOR V. THE GEO GROUP, INC. 43

may have a more explicit profit motive than government

entities, both state and federal governments also share an

interest in reducing the costs of detention or incarceration.

And all have an interest in providing meaningful programs,

including work programs, for detainees. Under this same

lens, I see no relevant difference between the work programs

for detainees at public detention facilities operated by

government entities and detention facilities operated by

entities like GEO. In all cases, work programs both provide

meaningful activities for detainees and decrease the cost of

detention facilities. The majority points out that detainees at

the NWIPC are not facing criminal proceedings. Maj. at 7.

But state facilities exempt from the MWA also detain those

not facing criminal proceedings, including those who are

civilly committed.6 The majority contends that “significant

differences” in how our precedent treats private contractors

and state entities render the comparison between the NWIPC

and state facilities inapposite. Maj. at 22–23. While those

6

The MWA exempts from the definition of “employee” “[a]ny resident,

inmate, or patient of a state, county, or municipal correctional, detention,

treatment or rehabilitative institution.” Wash. Rev. Code

§ 49.46.010(3)(k). As one example of the reach of this exemption,

Chapter 71.05 of the Revised Code of Washington provides for a broad

range of circumstances in which individuals may be civilly committed.

As the ACLU of Washington, Disability Rights Washington, and the

Washington Defender Association have explained, the focus of

Washington’s Involuntary Treatment Act, Wash. Rev. Code, ch. 71.05,

which provides for civil commitment proceedings, “has shifted from

protecting personal liberty and facilitating the deinstitutionalization of

mental health care to committing more people over a concern for public

safety.” Amicus Br. for ACLU of Wash., et al. at 11, In re Detention of

A.C., 533 P.3d 81, 85 (Wash. 2023) (Nos. 100668-3, 100690-0). As a

result, the MWA employee exception is exceedingly broad.

44 NWAUZOR V. THE GEO GROUP, INC.

differences might be relevant in other contexts, they simply

do not apply here.

In United States v. California, 921 F.3d 865 (9th Cir.

2019), we struck down a California statute that imposed an

inspection requirement on federal immigration detention

facilities because that requirement did not apply to state

facilities. Id. at 882–85. Although we permitted the state’s

imposition of other inspection requirements that did apply to

state facilities, we reasoned that the state cannot “impose an

additional economic burden exclusively on the federal

government.” Id. at 884. We compared inspections imposed

on privately run federal immigration detention facilities with

inspections at state and municipal detention institutions. Id.

at 882–85. We held that the relevant inquiry was whether

the state treated its own detention centers in the same manner

it treated federal detention facilities run by private

contractors. The same rule must apply here. Washington

seeks to impose a requirement on the NWIPC that it

apparently does not impose on any other detention facility in

the state. That violates the Supremacy Clause.

The majority asserts that “[t]he case before us is poles

apart” because “Washington’s MWA does not apply

differently to private facilities employing civil detainees

depending on whether the facility is operating pursuant to a

contract with the state or a contract with the federal

government.” Maj. at 24–25. This argument ignores the

context of this case. As the majority readily admits, “at this

time there is no such private facility operating pursuant to a

contract with the State.” Maj. at 26. The effect of the

majority’s holding is to treat federal facilities differently

from relevantly comparable state facilities.

NWAUZOR V. THE GEO GROUP, INC. 45

Plaintiffs rely in large part on North Dakota, 495 U.S.

423, for the proposition that “[t]he Supremacy Clause

requires Washington to treat federal contractors and state

contractors equally—not to treat contractors like it treats

government institutions.” The majority holds that the MWA

does not violate intergovernmental immunity because it

treats all private actors equally. Maj. at 19–22. In doing so,

the majority ignores the effect of the MWA, which is to treat

one facility that just so happens to be operated by a federal

contractor differently than all state operated detention

facilities. But in North Dakota, the Supreme Court upheld a

North Dakota law establishing labeling and reporting

requirements for suppliers of alcoholic beverages.7 495 U.S.

at 434–39. The case is inapposite. In North Dakota, the

federal government could not point to a single supplier in the

state that was not subject to the reporting and labeling

requirements. Id. at 437–39. All alcohol suppliers were

treated the same, regardless of their affiliation with the

federal government. Id.

Here, by stark contrast, all state detention facilities in

Washington are treated better than the NWIPC. Washington

is applying a regulation against a federal contractor running

a federal detention facility that it does not apply to itself, any

of its facilities, or any of the facilities run by its

municipalities or other subsidiary government entities.

Contrary to the majority’s framing of the issue, our inquiry

is not whether Washington treats all private entities alike, but

whether Washington treats a federally affiliated entity worse

7

Although only four Justices joined the lead opinion in North Dakota,

495 U.S. at 426, Justice Scalia fully concurred in the judgment, id. at

444–48 (Scalia J., concurring in the judgment), and the remaining

Justices concurred as to the reporting requirement, id. at 448–71

(Brennan, J., concurring in the judgment in part and dissenting in part).

46 NWAUZOR V. THE GEO GROUP, INC.

than it treats any similar entity. “[T]he relevant question

isn’t whether [NWIPC is] similarly situated to [other private

employers that are not exempt from the MWA]; the relevant

question is whether [it is] similarly situated to those who [are

exempt].” Dawson, 586 U.S. at 178.

In Graves v. O’Keefe, 306 U.S. 466 (1939), the Supreme

Court upheld a New York state income tax on salaries above

a certain income level, which happened to apply to a person

employed by an instrumentality of the federal government.

Id. at 477–80. As in North Dakota, the tax applied equally

to all New York residents with salaries above the income

threshold. Id. at 480–81. It made no difference that some

state residents fell below the threshold, because all federal

employees were treated the same as all other employees with

respect to the neutral and universally applicable threshold.

Id. Again, that is not the case here. Although the MWA

nominally extends to all private employers, it carves out an

exception for only some detention facilities—those operated

by the state. Because application of that exception treats a

federal contractor worse than a similarly situated class of

state-run institutions, the MWA is not like the tax at issue in

Graves. As Dawson instructs, if a state law exempts a class

of employers from an otherwise generally applicable

requirement, it must extend that exemption to all similarly

situated employers regardless of federal affiliation. Dawson,

586 U.S. at 178.8

8

Dawson stated:

The problem here is fundamental. While the State was

free to draw whatever classifications it wished, the

statute it enacted does not classify persons or groups

based on the relative generosity of their pension

benefits. Instead, it extends a special tax benefit to

NWAUZOR V. THE GEO GROUP, INC. 47

As these cases demonstrate, we must compare the

NWIPC to Washington state-run detention facilities, the

group favored by the MWA. Because all parties agree that

Washington applies an exception to itself that it does not

extend to the NWIPC, the MWA discriminates against a

federal contractor and thus violates intergovernmental

immunity principles. As noted above, the United States

adopted this view in its statement of interest filed in the

district court, arguing that Washington’s application of the

MWA to GEO was “an aggressive and legally unjustified

effort . . . to interfere with federal immigration

retirees who served as West Virginia police officers,

firefighters, or deputy sheriffs—and it categorically

denies that same benefit to retirees who served in

similar federal law enforcement positions.

586 U.S. at 179. One could easily transform this basic premise to the

MWA:

The problem here is fundamental. While the State was

free to draw whatever classifications it wished, the

statute it enacted does not classify [detention facilities

based on what they do]. Instead, it extends a

special . . . benefit to [facilities run by the State or

other parts of State government by exempting those

state facilities from the obligation to pay the MWA

wage]—and it categorically denies that same benefit

to [federal facilities that perform] similar [detention

functions].

Id.

As the United States explains, applying the MWA to GEO

“contravenes intergovernmental immunity because it would make

federal detainees subject to provisions that do not apply, and never have

applied, to persons in state custody, singling out a [federal] contractor . .

. for obligations Washington does not itself bear.” DOJ Amicus Br. at 2.

48 NWAUZOR V. THE GEO GROUP, INC.

enforcement,” and because “Washington excludes its state

inmates from the minimum wage . . . [t]his is a quintessential

violation of intergovernmental immunity principles.” DOJ

Statement of Interest at 2.

The United States reiterates this view in its amicus brief

filed in this court, writing “Washington has exempted its

own detention operations from the state minimum wage

laws,” meaning “[t]he only detainees in the state that must

be paid minimum wage are thus federal detainees—and only

if those detainees are housed in facilities owned and operated

by a private contractor pursuant to the federal government’s

authority to contract.” DOJ Amicus Br. at 25–26. Because

the purpose of the intergovernmental immunity doctrine is

to protect the federal government from burdensome or

discriminatory state regulation, either directly or through its

contractors, the federal government’s views are particularly

relevant. See North Dakota, 495 U.S. at 437–38 (“The

nondiscrimination rule finds its reason in the principle that

the States may not directly obstruct the activities of the

Federal Government.”). I agree with the United States that

the application of the MWA “independently contravene[s]

principles of intergovernmental immunity by discriminating

against the federal government’s detention operations.”

DOJ Amicus Br. at 25. Applying the MWA to GEO violates

the Supremacy Clause and is thus unconstitutional.

II. The MWA is preempted as applied to the NWIPC.

The majority concludes that GEO and the United States

have failed to show any congressional intent “to preempt the

application of the MWA to civil detainees held in private for-

profit detention centers.” Maj. at 29. In so holding, the

majority elects to support Washington’s use of its police

powers to set the minimum wage over the federal

NWAUZOR V. THE GEO GROUP, INC. 49

government’s broad authority over immigration. As the

United States points out, this decision has serious

ramifications for the United States operating immigration

detention facilities around the country. DOJ Amicus Br. at

14–16. Applying the MWA to GEO “create[s] dramatic

distinctions in the allowances applicable to detainees based

on the happenstance of the location of their detention and the

operator of their detention facility.” Id. at 15–16. Congress

has recognized the benefits of the VWP for decades, but the

majority’s holding “imperil[s] the [VWP’s] ongoing

viability.” Id. at 16. The majority has charted a roadmap for

states to circumvent the Supremacy Clause and Congress’s

authority and force the federal government to meet a higher

standard than the state imposes on itself.

Preemption stems from the “fundamental principle of the

Constitution . . . that Congress has the power to preempt state

law.” Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363,

372 (2000). There are three types of preemption: “conflict,

express, and field.” Murphy v. Nat’l Collegiate Athletic

Ass’n, 584 U.S. 453, 477 (2018) (internal quotation marks

omitted). Here, conflict preemption requires us to reject

application of the MWA to GEO. Conflict preemption

comes in two forms: impossibility preemption, which is

when “it is impossible . . . to comply with both state and

federal requirements,” and obstacle preemption, which

exists when a “state law stands as an obstacle to the

accomplishment and execution of the full purposes and

objectives of Congress.” Ryan v. Editions Ltd. W., Inc., 786

F.3d 754, 761 (9th Cir. 2015) (internal quotation marks

omitted).

For obstacle preemption, “a state law is preempted if it

‘stands as an obstacle to the accomplishment and execution

of the full purposes and objectives of Congress.’” Geo Grp.,

50 NWAUZOR V. THE GEO GROUP, INC.

Inc. v. Newsom, 50 F.4th 745, 758 (9th Cir. 2022) (en banc)

(quoting California, 921 F.3d at 879). In evaluating any

preemption claim we

must be guided by two cornerstones of [the

Supreme Court’s] jurisprudence. First, “the

purpose of Congress is the ultimate

touchstone in every pre-emption case.”

Second, “[i]n all pre-emption cases, and

particularly those in which Congress has

‘legislated . . . in a field which the States have

traditionally occupied,’ . . . we ‘start with the

assumption that the historic police powers of

the States were not to be superseded by the

Federal Act unless that was the clear and

manifest purpose of Congress.’”

Wyeth v. Levine, 555 U.S. 555, 565 (2009) (alterations in

original) (citations omitted) (quoting Medtronic, Inc. v.

Lohr, 518 U.S. 470, 485 (1996)).

Few areas of the law are as exclusively within the

domain of the federal government as immigration. As the

Supreme Court has explained, “[i]mmigration policy can

affect trade, investment, tourism, and diplomatic relations

for the entire Nation, as well as the perceptions and

expectations of aliens in this country who seek the full

protection of its laws.” Arizona v. United States, 567 U.S.

387, 395 (2012). As part of that immigration policy,

“Congress has directed federal officials to detain noncitizens

in various circumstances during immigration proceedings.”

Geo Grp., 50 F.4th at 751 (citing 8 U.S.C.

§§ 1225(b)(1)(B)(ii), (b)(2)(A), 1226(a), (c)(1), 1231(a)(6)).

To carry out that directive, the Secretary of the Department

NWAUZOR V. THE GEO GROUP, INC. 51

of Homeland Security (DHS) is empowered to contract with

private parties “as may be necessary and proper to carry out

the Secretary’s responsibilities.” 6 U.S.C. § 112(b)(2). This

includes the responsibility given to the Attorney General and

carried out by DHS to “arrange for appropriate places of

detention for aliens detained pending removal or a decision

on removal.” 8 U.S.C. § 1231(g)(1).

ICE, a component of DHS, does not operate its own

facilities for immigration detention. “Instead, ICE contracts

out its detention responsibilities to (1) private contractors,

who run facilities owned either by the contractor or the

federal government, and (2) local, state, or other federal

agencies.” Geo Grp., 50 F.4th at 751. ICE’s contract with

GEO here comes from Congress’s preference that the federal

government use existing facilities for immigration detention.

See 8 U.S.C. § 1231(g).

Embedded in this congressionally mandated relationship

between ICE and GEO, Congress has approved “allowances

(at such rate as may be specified from time to time in the

appropriation Act involved) to aliens, while held in custody

under the immigration laws, for work performed.” 8 U.S.C.

§ 1555(d). DHS implements this detainee work provision

through the VWP. As noted, the VWP is governed by ICE’s

PBNDS. See Performance-Based National Detention

Standards § 5.8, at 405–09 (ICE 2016). The PBNDS allows

detainees to “volunteer for work assignments” and

guarantees monetary compensation of “at least $1.00 (USD)

per day” for any work completed. Id. at 405, 407. The VWP

is purely voluntary: “Detainees shall be able to volunteer for

work assignments but otherwise shall not be required to

work, except to do personal housekeeping.” Id. at 405.

Congress has operated in this space and set the daily rate

since the late 1970s. See Departments of State, Justice, and

52 NWAUZOR V. THE GEO GROUP, INC.

Commerce, the Judiciary, and Related Agencies

Appropriation Act, 1979, Pub. L. No. 95-431, 92 Stat. 1021,

1027 (1978). As the Eleventh Circuit recently reaffirmed:

“[N]o Court of Appeals has ever questioned the power of a

correctional institution to compel inmates to perform

services for the institution without paying the minimum

wage.” Barrientos v. CoreCivic, Inc., 951 F.3d 1269, 1277

(11th Cir. 2020) (alteration in original) (quoting Villarreal v.

Woodham, 113 F.3d 202, 207 (11th Cir. 1997)).

Congress has expressly capped the amount which DHS

will reimburse contractors for detainee work under the

VWP. See 8 U.S.C. § 1555(d). Congress has reserved the

right to set the wage amount for detainee work performed

under the VWP through the appropriations process. Id.

Congress has set that wage rate at $1.00 per day and has not

changed that since its implementation in 1979. The majority

contends that “other federal functions, such as, for example,

designing and building military aircraft and ships for our

national defense” are important quintessential functions yet

“[s]tate minimum wage laws are routinely applied to federal

defense contractors.” Maj. at 32–33. However, Congress

has told us the federal immigration context is different by

expressly capping the rate at which DHS will reimburse

contractors. Yet the majority finds no issue with applying

Washington’s MWA to GEO, even though doing so results

in a dramatic increase to the wage rate set by Congress. For

instance, if an NWIPC detainee works one hour per day, the

wage set by the MWA represents an increase of more than

1500% over the rate set by Congress. If an NWIPC detainee

works four hours per day, that percentage increase amounts

to more than 6000%. And as noted, Washington pays its

detainees no more than $40 per week, no matter how many

hours those detainees work. Applying the MWA to a federal

NWAUZOR V. THE GEO GROUP, INC. 53

contractor carrying out immigration policy like GEO

fundamentally frustrates, if not entirely defeats, the delicate

immigration public and private partnership structure

envisioned and created by Congress.

The majority argues ICE does not forbid GEO from

complying with the MWA and that GEO’s “contract requires

GEO to comply with ‘all applicable federal, state, and local

laws and standards,’ including ‘labor laws and codes’” such

that the contract requires GEO to pay its civil detainees

Washington’s minimum wage. Maj. at 34. This is, at best,

a strained reading of the contract. As the United States

points out in its amicus brief, “[n]either party understood the

contract to impose this obligation, and the federal

government has never understood any contract for operation

of the Voluntary Work Program to require payments under a

State’s minimum wage laws.” DOJ Amicus Br. at 18. The

contract’s plain language supports this mutual

understanding. GEO’s contract requires that “each person

employed” by GEO is a U.S. citizen or a lawful permanent

resident with work authorization and has resided in the

United States for the past five years. GEO’s contract

prohibits “illegal or undocumented aliens” from being

employed under the contract. By its plain language, the

contract, consistent with the intent of the parties, did not

intend for GEO to pay civil detainees the Washington state

minimum wage.

The effect of the majority opinion is that “[c]ontractors

are unlikely to agree to operate the [VWP] on terms that

would inevitably lead to considerable unreimbursed costs,”

which means “detainees at some facilities would have no

opportunity to participate in the [VWP], despite the benefits

Congress and DHS have determined flow from that

Program.” DOJ Amicus Br. at 16. As a result, detainees will

54 NWAUZOR V. THE GEO GROUP, INC.

lose access to a voluntary program that provides meaningful

benefits. This is not speculation. As GEO notes,

“application of the []MWA has already interfered with a

federal function,” because “GEO can no longer operate the

VWP at the NWIPC.” “As an immediate consequence of the

district court’s judgments that Washington employment law

applies to operation of the VWP at the NWIPC, ICE, at

GEO’s request, suspended operation of the program.” The

detainees at NWIPC have not been able to benefit from the

VWP since October 28, 2021, when GEO and ICE

discontinued operating the VWP as a result of the district

court’s injunction. The effect of the district court’s

judgments, which the majority affirms, is that for the past

three years, detainees at NWIPC have had no ability to

participate in the VWP and receive the benefits from the

program only because Washington seeks to hold federal

contractors to an illegal minimum wage standard.

As the United States persuasively argues in its amicus

brief, the “statutory structure does not contemplate a role for

states or state law in governing the [VWP]” and any approval

of the application of Washington’s MWA to GEO here

threatens to “create dramatic distinctions in the allowances

applicable to detainees based on the happenstance of the

location of their detention and the operator of their detention

facility.” DOJ Amicus Br. at 14–16. The majority attempts

to minimize the extreme ramifications of its opinion by

noting that while it might force the federal government to

“pay more under future contracts with GEO,” the federal

government’s concerns that private contractors “may scale

back or eliminate the VWP due to the increased financial

burdens” is “unknowable.” Maj. at 18, 31.

While I think the majority’s speculation is just incorrect,

the larger point is that it is irrelevant, as the majority

NWAUZOR V. THE GEO GROUP, INC. 55

misunderstands the presumption against preemption. Maj.

at 28–29. The majority is correct that the “presumption

against preemption [applies] ‘when a state regulates in an

area of historic state power.’”9 Maj. at 28 (quoting Knox v.

Brnovich, 907 F.3d 1167, 1174 (9th Cir. 2018)). But as we

have more recently explained, “the presumption does not

apply when a state law would interfere with inherently

federal relationships.” Geo Grp., 50 F.4th at 761. The

MWA displaces the contractual floor established by

Congress and solidified in the contract between ICE and

GEO. It also dictates the terms by which federal detainees

perform work under the VWP authorized by Congress. We

have not only previously rejected the presumption against

preemption when a statute required federal construction

contractors to be licensed under state law, but we essentially

applied a presumption for preemption because of the lack of

a “‘clear Congressional mandate’ and ‘specific

Congressional action’ that unambiguously authorize state

regulation of a federal activity.” Gartrell Constr. Inc. v.

Aubry, 940 F.2d 437, 440–41 (9th Cir. 1991) (quoting

Hancock v. Train, 426 U.S. 167, 178–79 (1976)).

We apply such a presumption for preemption where the

matter involves “states’ active frustration of the federal

government’s ability to discharge its operations.”

California, 921 F.3d at 885. While the MWA “does not

regulate whether or where an immigration detainee may be

confined,” it does “require that federal detention decisions .

9

The majority’s definition of the “area of historic state power” is far too

broad. The majority looks to the state’s police power to regulate wages.

Maj. at 28–29. But the appropriate “area” on which we should focus is

regulation of federal immigration detainees—an area in which states (for

obvious reasons) have not historically exercised their police powers.

56 NWAUZOR V. THE GEO GROUP, INC.

. . conform to state law” in that GEO must pay the minimum

wage set by the MWA. Id. To state that the MWA does not

frustrate the federal government’s ability to discharge its

operations relative to immigration—an area of law reserved

to the federal government—is to turn a blind eye to the

reality of the majority’s opinion.

Even setting aside the incorrect application of the

presumption against preemption, there are two other flaws in

the majority’s reasoning. Individually, they undermine the

MWA’s application to GEO, but, together, they present a

danger to the nation’s immigration policy.

First, the majority diminishes the effect of its opinion.

ICE and GEO specifically contracted with the understanding

that GEO would pay $1.00 per day to detainees who

participate in the VWP. The current rate set by the MWA is

$16.28 per hour. It is naïve to think that GEO is willing to

incur an increase in detainee labor costs of more than 1500%

for each hour worked with only minimal financial

repercussions to the federal government should ICE and

GEO renegotiate the contract to operate the NWIPC.10 Put

10

The majority gives as one reason for its holding that the resulting

1500% increase in wage-related costs to GEO “merely increas[es] the

federal government’s costs.” Maj. at 15. The majority claims that “even

after complying with Washington’s MWA GEO could still profit

substantially from operating the NWIPC under its current contract.”

Maj. at 18. The majority may well be correct, but it is not up to the

majority to set the nation’s immigration policy, including the policy of

how much immigration detainees should be paid. The majority also

recognizes that GEO’s NWIPC contract expires at the end of 2025. Maj.

at 7. While the majority attempts to diminish the severity of its erroneous

holding by claiming “[a]t this time, there has been no renegotiation, and

we are unable to predict the outcome of such renegotiation,” Maj. at 18,

this is simply irrelevant to the preemption issue. And I could speculate

that perhaps the reason for no new negotiation is that GEO and the

NWAUZOR V. THE GEO GROUP, INC. 57

differently, the majority believes GEO can simply incur the

costs associated with paying a detainee $65.12 for four hours

of work when currently GEO pays $1.00 and carry on with

business as usual. The reality of the majority’s opinion is

that it will force ICE to either operate the NWIPC itself,

something ICE does not do and is contrary to congressional

policy,11 contract with the state, as the state exempts its own

facilities from the MWA, or have no immigration detention

facilities (other than those effecting brief detentions, pending

transfers out of state) in the State of Washington.12 In

reaching its conclusions, the majority has severely restricted

ICE’s ability to negotiate and contract with contractors in

Washington. This clearly “stands as an obstacle to the

accomplishment and execution of the full purposes and

federal government hope that either our court or the Supreme Court will

correct the fundamental flaws in the district court’s opinions.

11

As we have recognized, “ICE does not build or operate its own

detention facilities. Instead, ICE contracts out its detention

responsibilities to (1) private contractors . . . and (2) local, state, or other

federal agencies.” Geo Grp., 50 F.4th at 751. According to the ACLU,

“as of July 2023, 90.8 percent of people detained in ICE custody each

day are held in detention facilities owned or operated by private prison

corporations.” Eunice Hyunhye Cho, Unchecked Growth: Private

Prison Corporations and Immigration Detention, Three Years Into the

Biden Administration, ACLU (Aug. 7, 2023), https://www.aclu.org/

news/immigrants-rights/unchecked-growth-private-prison-corporations

-and-immigration-detention-three-years-into-the-biden-administration.

12

The latter is not unlikely. And were it to occur, Washington

immigration detainees and their families would be the ones to suffer from

the detainees being held in other states instead of Washington. And, of

course, it is detainees who already suffer from the elimination of the

VWP at the NWIPC. Again, what has been eliminated is not a

mandatory work requirement, but a purely voluntary and beneficial work

program which provides both daily tangible and intangible benefits to

hundreds of detainees.

58 NWAUZOR V. THE GEO GROUP, INC.

objectives of Congress.” Geier v. Am. Honda Motor Co.,

529 U.S. 861, 873 (2000) (quoting Hines v. Davidowitz, 312

U.S. 52, 67 (1941)).

Second, the majority’s opinion will result in vast

discrepancies in ICE’s ability to contract with contractors

throughout the country. In fact, the discrepancies and

ramifications that come with the majority’s opinion are near

certainties. A detainee would receive more than $16.00 per

hour in Washington and $1.00 per day in Nevada for

performing the same work. As the federal government

notes, ever since the district court issued its injunction on

October 28, 2021, the VWP at NWIPC has been

suspended—undermining any argument by the majority that

the application of the MWA will not undermine Congress’s

goals associated with the VWP. DOJ Amicus Br. at 16. The

majority rejects the federal government’s contention that the

MWA’s application to GEO will result in a chilling effect

that “private contractors may scale back or eliminate the

VWP due to the increased financial burdens” as

“unknowable,” Maj. at 31, even though that is precisely what

has happened here. In 1979, Congress devised a statutory

scheme to provide for allowances for federal immigration

detainees to work for a rate of $1.00 per day. Every federal

contractor operating an immigration detention facility has

operated within that statutory scheme.13 In this uniquely

13

The majority oddly challenges the 1979 Appropriations Act’s

expiration date. Maj. at 30. Section 1555(d) authorizes the use of

appropriated funds “hereafter provided” to pay allowances “at such [a]

rate as may be specified from time to time in the appropriation Act

involved.” 8 U.S.C. § 1555(d). Congress has never altered the rate set

in the 1979 Appropriations Act, so, regardless of its expiration as an

appropriations act in general, the rate set remains the current rate for

purposes of § 1555(d) until Congress specifies otherwise. As the United

NWAUZOR V. THE GEO GROUP, INC. 59

federal area of the law, Congress has created a public-private

partnership to provide for detainees to receive payment for

their work while detained. The application of the MWA to

GEO “stands as an obstacle to the accomplishment and

execution of the full purposes and objectives of Congress,”

Hughes v. Talen Energy Mktg., LLC, 578 U.S. 150, 163

(2016) (quoting Crosby, 530 U.S. at 373), by making the

VWP too costly to operate, creating discrepancies between

similarly situated immigration detainees, and severely

restricting if not entirely undermining ICE’s ability to

negotiate with federal contractors. The MWA therefore is

preempted as an obstacle to the execution of the federal

VWP and its application to the nation’s immigration policy.

* * *

The MWA violates the Supremacy Clause of the

Constitution because Washington grants preferential

treatment to its own detention facilities while holding the

NWIPC to a more onerous standard just because GEO is a

federal contractor. Plus, applying the MWA to GEO

impermissibly frustrates Congress’s ability to effectuate its

immigration policy and the VWP. As a result, it is

preempted. Accordingly, I would vacate the judgments

against GEO and the district court’s injunction against GEO

States points out in its amicus brief, because Congress has not modified

the rate set in 1979, “DHS accordingly cannot expend appropriations in

excess of that amount to reimburse contractors for operating the [VWP].”

DOJ Amicus Br. at 5. Thus, as stated by the United States, the rate set

in the 1979 Appropriations Act “remains the case for Voluntary Work

Programs administered by private contractors in facilities operated on

behalf of DHS.” Id. at 14.

60 NWAUZOR V. THE GEO GROUP, INC.

enjoining continued operation of the VWP, and order it to

instead enjoin application of the MWA to GEO.14

14

As I would reverse on both intergovernmental immunity and

preemption grounds, I would not reach GEO’s derivative sovereign

immunity argument.