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Privatization is the process of delegating control of a governmental function to the private sector. The role of privatization in America is rapidly expanding on the belief that privatization of government function is an effective tool to cut costs and reduce budget deficits and the prison system is not the exception. Therefore the major constitutional question is whether prisoners in private facilities will benefit from same constitutional protections offered to prisoners in government facilities, or whether the private prison must be subject to Constitution.
This article examines issue about the application of constitution to private prisons in U.S. focusing state action doctrine. The fourteenth amendment established the state-action requirement as a constitutional limit on the government, in order to protect individual rights. However, the courts over the past half century have expand the meaning of state action, failing to apply a consistent analysis for determining. The key constitutional problem of private prison is that the private prison can be considered the state actor which attributable to state and subject to constitution.
Part I of this article introduces arguments for and against privatization and complex legal issues. Part II of this article explores the history of prison privatization and the issues on constitutional law and civil rights law in the United States. Part III of this article overviews state action theory in U.S. Constitution and four state action test. Part IV explores the U.S. Supreme Court decisions related the application of constitution to private prison.
Privatization of prisons does not mean that it will eliminate, or at least reduce constitutional liability. State action can be found in the private-prison or private-jail context under any of the various tests. Though the Supreme Court has increasingly restricted the application of the state-action doctrine, the doctrine is certainly flexible enough to be used with vigor in the right case, such as one involving the management of a private prison or jail. As Justice Brennan has written, the Government is free to privatize some functions it would otherwise perform. But such privatization ought not automatically release those who perform government functions from constitutional obligations.

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