Aug 13 (Reuters) - Private prison operator GEO Group ( GEO )

must pay more than $23 million to the state of Washington and

hundreds of immigrant detainees who were paid $1 a day to

participate in a work program, a U.S. appeals court ruled on

Wednesday.

The full 9th U.S. Circuit Court of Appeals in San Francisco

declined to reconsider a three-judge panel's January ruling that

said GEO does not enjoy the same immunity from state minimum

wage laws afforded to the federal government even though it

operates a Tacoma, Washington, detention centre under a contract

with the U.S. Immigration and Customs Enforcement.

The ruling was the latest blow for GEO in a pair of

consolidated lawsuits first filed in 2017.

Six judges dissented, saying the ruling misread U.S. Supreme

Court precedent extending government immunity to contractors and

would interfere with federal immigration enforcement.

"Under this court's decision, any State can impair any

federal policy - no matter how central to the federal government

- so long as the State regulates federal contractors rather than

the federal government itself," wrote Circuit Judge Patrick

Bumatay, an appointee of President Donald Trump. All of the

judges who dissented are appointees of Republican presidents.

GEO Group ( GEO ), the Washington Attorney General's office, and

lawyers for detainees who sued the company did not immediately

respond to requests for comment.

GEO is appealing a $17.3 million jury verdict for detainees

who were paid $1 a day to cook, clean, perform repairs, and

staff a barber shop and library at the Tacoma detention centre,

and a separate $6 million award for the state.

The Washington Supreme Court, in response to certified

questions from the 9th Circuit, ruled in 2023 that the detainees

were GEO's employees under state law and had to be paid the

minimum wage.

That left the federal court to consider GEO's claim that

because it was operating a government detention centre, it was

shielded from state wage laws just like the federal government.

The 9th Circuit panel in January had said the government did

not dictate the wages GEO must pay to detainees or require it to

operate the work program, and also rejected the company's claim

that the state minimum wage was preempted by federal immigration

law.

On Wednesday, Circuit Judge Mary Murguia wrote for the 9th

Circuit that the panel decision was well reasoned, and pushed

back against Bumatay's claim that the court had set a dangerous

precedent.

"Adoption of his position would allow any government

contractor to refuse to pay state-mandated minimum wage to its

employees," wrote Murguia, an appointee of President Barack

Obama, a Democrat. "No one in this case, not even GEO, has

suggested that this is the law."

The case is Nwauzor v. GEO Group Inc ( GEO ), 9th U.S. Circuit Court

of Appeals, No. 21-36024.

For the plaintiffs: Jennifer Bennett of Gupta Wessler

For the state: Marsha Chien of the Washington Attorney

General's Office

For GEO Group ( GEO ): Michael Kirk of Cooper & Kirk

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