Prisons, Privatization, and the Elusive Employee-Contractor Distinction — Part 2

On Friday, I posted the introduction to my latest paper, Prisons, Privatization, and the Elusive Employee-Contractor Distinction, which you can find here on SSRN.

Based on reading the comments to the last post, let me make one thing clear: this article is only about the non-empirical arguments against privatization. If you oppose private military companies because you think they’ll do a bad job or not be seen as legitimate or tarnish the image of the U.S. or won’t have a professional ethic or will kill more innocents than the public military, this argument is not aimed at you. If you oppose private prisons because you think they’re more expensive or mistreat prisoners or don’t rehabilitate prisoners as well or lobby for stricter criminal laws, then this argument is not aimed at you.

The only arguments I’m attacking are the non-empirical ones — that is, arguments that oppose doing the job through contractors rather than employees even if it could be shown that no one cared about it in the world and that it affected no actions. I’m going through the arguments made in the literature, and arguing that (1) the argument is actually empirical, or (2) the argument isn’t actually about privatization, or (3) the argument is wrong.

Finally, this paper shouldn’t be read as endorsing any sort of utilitarianism, consequentialism, or anything else: for purposes of the article, I concede the validity of all sorts of potentially non-consequentialist, non-instrumentalist concerns (e.g., accountability has inherent importance, those who incarcerate must be motivated by public purposes, society must engage in moral dialogue with the prisoner); I merely deny that using contractors is inherently contrary to any of these concerns.

Anyway, with that out of the way,  here’s  the next section of the paper, about accountability and legality concerns.

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A. Accountability Concerns

I’ve already alluded to the argument that private providers are less accountable—in other words, that contracting out for prison management violates core commitments of public law.

Mostly, these concerns turn out to be instrumental: accountability is valuable because it ensures that the agent does what the principal wants and is held accountable for any failures. The political accountability that comes from elections, the legal accountability that comes from lawsuits, and the administrative accountability that comes from agency oversight—all these are justified primarily as ways of preventing or punishing abuses. And the instrumental focus implies an empirical analysis. So, right or wrong, accountability-based critiques of privatization seem to be entirely legitimate on my view.

Some accountability-based arguments purport to be tougher on privatization, though, and in fact claim to rule it out on non-instrumental, non-empirical grounds. As Malcolm Thorburn writes: “Surely the bite of these objections remains even if private contractors regularly produce good outcomes; the simple fact that they do so without having to account for their conduct, that their operations are hidden from public scrutiny, and so forth is reason enough to object.”

What’s so great about accounting for one’s conduct and being subject to public scrutiny (aside from the empirical results)? Thorburn—who’s actually discussing private police services,but his concerns apply more broadly—explains that without these elements, one can’t be said to be acting in the name of the state. “[L]egitimate policing,” after all, “is necessarily non-partisan” and “bound up with impartiality,”and only “the state, if properly constructed, can both represent us collectively . . . and yet speak for no private party in particular.” To “legitimately claim to be acting in the name of the state,” one must “meet the accountability standards set out in public law—roughly, reasonableness and fairness,” as well as “the rights protections set out in constitutional bills of rights, to which private citizens and private action are not similarly subject.”

So what makes private policing services illegitimate, in Thorburn’s view, is that—at least in the U.S. today—they’re not subject to public law norms or the Bill of Rights, and therefore aren’t acting in the name of the state, which is a necessary condition for legitimate policing. Presumably alternative accountability mechanisms, like tort liability, are insufficient.

But this critique isn’t an argument against privatization at all—it’s really just an argument against unaccountability. “Privatization” doesn’t have to mean privatization with the minimum of procedural protections under the current state of U.S. constitutional law. Conceivably, one could counter Thorburn’s objection by passing an APA- and/or FOIA-like statute to cover private providers, by increasing judicial scrutiny, or by changing constitutional doctrine so they become “state actors” for constitutional purposes. (Incidentally, private prisons already are state actors for constitutional purposes insofar as they interact with prisoners. The state action doctrine looks to actual function, not to the employee vs. contractor distinction.) To the extent accountability concerns are about individuals “having their day in court,” the statutes can guarantee that as well. Finally, contracts—with appropriately detailed provisions and adequate monitoring—can be used to extend public law values to private contractors.

It’s true that “employee” and “independent contractor” are legal terms of art distinguished, in part, by the extent of the principal’s control rights, so one could argue that employees are more accountability than contractors by definition. But this would inappropriately give too much importance to only one form of control. One can have significant de facto control over one’s contractor just by having known reasons for failing to renew the contract, possibly sometimes even more than over public employees protected by qualified immunity or by civil service rules. Where providers effectively compete with one another, market accountability can also be a powerful tool that cuts in favor of private provision, and the same could be said of legal accountability, if private providers are more amenable to lawsuits.

So the empirical argument about whether public or private providers are more accountable could go both ways. At the end of the day, given the proper safeguards, and bearing in mind the less-than-stellar record of the public sector,private provision could conceivably be more accountable than public provision.

One might still answer that contractual accountability (or other alternative sources of accountability) would never work—that private providers, because of their profit-based incentives, could never act as neutrally as government employees, even if we subjected them to every known procedural and constitutional requirement.

Ahmed White’s critique proceeds along roughly these lines. He writes that the rule of law requires the government to be a “legally and politically transparent entity with clearly demarcated boundaries,” whereas the private prison “thoroughly merges the private and the public and blurs the boundaries of the sovereign.” This blurring “expand[s]” “the coerciveness of the state” because it “conceal[s] the identity of state actors.”

While White’s critique is sometimes phrased as though it’s non-empirical, it turns out to hinge on empirical predictions—though ones he believes are fairly solid. The state “probabl[y]” reduces its civil-rights litigation expenses when it privatizes (though it’s possible that contractors would simply demand correspondingly high contract payments to cover litigation expenses). The state would “likely” be insulated from “a more symbolic, political” accountability. Less solidly: Confusion over jurisdiction (in the case of interstate prisoner transfers) and access (to records and the like) “perhaps cannot lend[] itself to any consistent resolution.” There is a “possibility” that private prison firms will manipulate disciplinary proceedings to “sustain their occupancy rates.” And so on.

White’s view is that all these results are likely and indeed “predictable,” and that there are “inherent, structural reasons to suppose that private prisons will always, on the whole, remain more dysfunctional and indeed more socially malignant than public prisons.”But the important point here is that he doesn’t deny that “aggressive courts, competent legislatures, and zealous reform theoretically could resolve” these problems (even if they probably won’t).

The accountability critique thus isn’t an inherent critique of privatization: instead, it’s a critique of unaccountability, sometimes coupled with an empirical prediction that abuses are more likely under privatization.

B. Specific Legal Prohibitions

Let’s move on to arguments that privatization violates specific legal provisions. These, too, aren’t about privatization as such. Many of these legal provisions actually don’t distinguish between public and private providers; as for those that do, one can of course favor following the law for non-instrumental reasons, but such a procedural concern for legality doesn’t support the substance of the law and thus doesn’t provide any argument against changing the law.

One could argue, for instance, that prison privatization violates the Due Process Clause because government can’t “delegate discretionary functions to private entities with a financial stake in the way such discretion would be applied.” But the Due Process Clause itself says nothing about privatization as such. One of the classic cases in this line of doctrine, Tumey v. Ohio, involved not a private contractor at all, but rather a clearly public village mayor/judge who, the Court held, would be unduly swayed to convict defendants because his salary was increased by the amount of the “costs” paid by convicted (but not acquitted) defendants.

Public actors, just like private ones, can have their judgment affected by their pecuniary self-interest, but this is an argument for neutral compensation rules, not against privatization. As a result, if Due Process doctrine ends up applying with special force to private parties—sometimes it does and sometimes it doesn’t—it’s because of an empirical prediction that how they exercise their discretion, given how they’re compensated, will more often tend to affect their bottom line and that this will more often skew their judgment.

One could also argue that prison privatization violates the nondelegation doctrine. But again, the Nondelegation Clause says nothing about privatization as such—there isn’t even a Nondelegation Clause in the Constitution. The doctrine itself derives from the Article I Vesting Clause, which vests all legislative power in Congress and therefore (so the Supreme Court has said) prevents any delegation of such power.But because the focus is on how much power Congress gives up, it’s not clear why it should matter whether the recipient of the delegation is public or private, and indeed, the federal nondelegation doctrine doesn’t distinguish between public and private delegations. (The same goes for the more limited area of delegations of power to make regulations respecting federal property under the Property Clause.) And the doctrine’s requirement that any delegation be accompanied by an “intelligible principle”is motivated by various empirical concerns, including the (debatable) fear that an over-delegating Congress will legislate irresponsibly and that the recipients of broadly delegated power will act unaccountably.

Some states take a stronger view against delegations to private parties, but even then, the concern (when clearly stated) is often empirical. According to the Texas Supreme Court, for instance, private delegations are more problematic than public delegations because of possible “personal or pecuniary interest[s]” and because of the possibility of “public powers [being] abandoned to those who are neither elected by the people, appointed by a public official or entity, nor employed by the government.” The ultimate rule for judging private delegations in Texas depends on explicitly empirical factors like whether the delegate’s actions are “subject to meaningful review,” whether affected persons are “adequately represented in the decisionmaking process,” whether the Legislature has “provided sufficient standards,” and the like.

Accordingly, commentators have discussed delegation to private prisons in terms of explicitly empirical criteria, such as the possibility that the profit motive will bias disciplinary decisionsor grant too much discretion to act arbitrarily.

Similar empirical concerns can be seen to animate other constitutional arguments,for instance under the Take Care Clause or the Appointments Clause.

But even suppose the law is frankly unsympathetic to privatization. Perhaps there is some legal provision that bars private ownership or operation as such, like the prohibition in the Federal Activities Inventory Reform Act of 1998 against contracting out of any “inherently governmental function”—defined as “a function that is so intimately related to the public interest as to require performance by Federal Government employees.”This definition obviously isn’t a model of clarity, but suppose it can be fairly interpreted to bar private federal prisons.

One can certainly believe that—regardless of why the legal provision was enacted or whether it’s a good idea now—compliance with the law is desirable, and not just because compliance is instrumentally useful. I’m glad to concede for purposes of this Article that compliance with the law may have non-instrumental value and that empirics thus aren’t relevant; but again, the argument isn’t about privatization as such. A legality-based argument of this sort obviously doesn’t say anything about whether the law at issue is a good idea, and therefore it doesn’t provide us with any arguments against repealing the law.