Dismissal of defense of derivative sovereign immunity can be addressed on appeal after judgement on the merits so collateral order doctrine does not apply.
Plaintiffs lived in military housing on the Naval Amphibious Base Coronado near San Diego while on active duty in the Navy. The housing was owned by defendant San Diego Family Housing [SDFH] a public-private venture created by statute. The house leaked and had mold. Plaintiffs were not satisfied with defendants efforts to remediate so they sued. SDFH moved to dismiss claiming it has derivative sovereign immunity. The Federal District Court for the Southern District of California denied the motion. SDFH appealed to the United States Court of Appeals for the Ninth Circuit. The 9thCircuit dismissed the appeal for lack of jurisdiction.
In order to successfully assert the derivative sovereign immunity defense, the defendant must basically establish that the alleged wrongful conduct was performed solely at the direction or orders from the government. The district court determined this was not established by SDFH. In order for SDFH to appeal the dismissal of that defense it must convince the appellate court that the collateral order doctrine applies.
Under this doctrine an order that does not terminate the litigation is nonetheless treated as final and appealable if it
(1) conclusively determines the disputed question,
(2) resolves an important issue completely separate from the merits of the action, and
(3) is effectively unreviewable on appeal from a final judgment.
Here while factors one and two are met here the third is not. There is no reason this case can't be decided on its merits where following a final judgment the issue regarding the applicability of derivative sovereign immunity could be raised on appeal. Therefore the 9th Circuit has no jurisdiction to hear this appeal at this time.