In its introduction to its analysis of the issue for the Michigan Sheriffs' Association, PSC admits that from a fiscal standpoint, privatization is, at first glance, undeniably attractive due to the recognized ability of the private sector to deliver greater value at a lower price while simultaneously earning a profit. Nevertheless, MSA – through PSC – objects to privatization on the grounds that critical legal issues are raised by this practice.
PSC cites federal court decisions which note that despite having contracted with a private entity, a county remains liable for any constitutional deprivations caused by the policies or the customs of the private entity; and court decisions which state that inmates confined in private correctional institutions must be afforded the same rights and duties, privileges and obligations, and remedies, and liabilities as those confined in public facilities. (PSC, pages 5 and 6). Therefore, because every inmate is constitutionally guaranteed due process, every such dispute holds the potential for federal civil rights action and results in MSA's raising questions as to whether or not the power to incarcerate can be delegated. Citing additional federal court rulings which argue that contracting out detention facilities in itself violates no inmates' rights so long as access to due process is preserved, PSC informs MSA that virtually all the activities attendant to the operation of a secure detention facility can be delegated (emphasis intended) if government is willing to assume ultimate liability, should such liability emerge (emphasis intended). (PSC, page 6 and 7).
Moreover, PSC's report to MSA acknowledges that such authority as private prison operators possess derives directly from governmental contracts and applicable state statutes. Inmates, MSA recognizes in knowing or unknowing opposition to the argument continually made by ACLU opponents of privatized corrections facilities, are not denied their freedom by private firms, but by government. "Inmates are incarcerated directly as a result of the workings of state and local law", not by the actions of a private prison contractor. (PSC, page 8) Therefore, as MSA argues through PSC, privatized jails open the grave possibility of "exposing the state and its political subdivisions to costly, and perhaps futile, litigative defenses in future court decisions aimed at making local governments fully liable for the actions of their private sector penal vendors." (PSC, page 8).
As MSA surely knows, liability of the contracting government agency is based on thepremise that corrections is an essential aspect of the police powers of "Mestate, county, or municipality.  Despite its expression of concern suggesting that an irresponsible private vendor would impose heavy liability burdens on local corrections officials, in a seemingly contradictory passage in the same context, MSA virtually acknowledges that government is better protected against direct liability when facilities are operated by private vendors than it is now. In its analysis for MSA, PSC notes that since the 11th Amendment generally bars citizens from federal court suits against their own state or its political subdivisions, a private company would be far more open to prisoner suits than would a state prison operator if for n[ other reason than it's easier to sue a private firm than it is to sue government.
Therefore, in opposition to the argument that private firms can do the job for less, PSC and MSA argue that private firm would be compelled to carry costly liability insurance which would raise their costs well above what it would cost government to build and operate jails. (PSC, page 5) In other words, MSA knows that the real liability for problems in a corrections facility operated by a private vendor would fall on that vendor, not the county. 
In expressing concern about the cost to the private contractor of obtaining insurance to cover legal liability should a prisoner sue for violation of civil rights, MSA is dearly arguing that primary liability will lie with the private vendor and the private vendor would have to incur costs not currently incurred by government-operated jails. (Emphasis intended). This expression of concern derives from the assumption that a private vendor will virtually always do a poorer jab of operating a jail and looking after inmates' civil rights than would a government operator.
Yet in its 1988 analysis for MSA, PSC notes that just in the preceding year, more than 19,000 prisoner civil rights suits were filed against the federal penal system alone. An equal number of suits have been filed against state prisons and county jails. Therefore, under current "within system" techniques of jail management, States and their political jurisdictions are not directly threatened with the loss of money from such suits – indeed, sheriffs currently boast of their lack of need to incur insurance costs against the possibility of financial loss – they are threatened with the loss of something more fundamental: legal power and democratic control over the operation of the correctional facility. When bad management brings courts into the picture, power over the facility (which means the power which citizens have over the facility) is removed from the state or county and given to non-elected judges.
But a private vendor, as the target of choice, would lose money. Therefore it is always (emphasis intended) in the private vendor's interest to operate a corrections facility in a manner which dramatically reduces the probability of such suits. No such incentive currently resides in government operation of corrections facilities. If the concern is about protecting the civil rights of inmates, private vendors promise better performance than government operators because their potential financial costs for failure to properly manage are real, potentially knowable, and insurable. Therefore, such costs will certainly be taken into account when contracts are bid – as they are in every private contract currently in place where private firms operate corrections facilities, and operate them for less than it had previously cost government.
However, if the concern is about the potential for legal liability passed upward to units of government in the event suits are filed by inmates – and that seems to be MSA's only concern – it should be acknowledged that, given the condition of government-operated facilities in the absence of privatization – government operators, as attested by the thousands of suits which have already been filed, are extraordinarily open to such suits now. and are losing control of the facilities they operate. It is difficult to believe that private operators who must focus on maintaining their operations in ways which assure security and which minimize grounds for costly suits – since, as noted above, well-managed facilities are less costly to operate and, therefore, more profitable to operate – would bring greater threats for legal liability on local governments, than already exists.