## Facts

- The legislature enacted an amendment authorizing establishment of one privately managed prison under a long-term concession, with capacity up to 800 inmates.
- The scheme allowed a private corporation, licensed by the state and contracting with the prison service, to manage and operate the facility.
- The amendment regulated licensing, employee qualifications, the scope of staff authority (including coercive powers), and state supervision and oversight.
- The initiative was justified by the government as an efficiency measure to address prison overcrowding and resource limits.
- A concessionaire was selected and a concession contract signed before final judicial resolution.
- Petitioners (including a public-interest academic center and individuals connected to corrections) filed a direct constitutional challenge seeking annulment of the amendment under the constitutional protections for liberty and dignity.
- Respondents argued privatization was not per se unconstitutional if the state retained regulatory control and oversight, and cited comparative experience.

## Issues

1. Whether authorizing a privately operated prison violates the constitutional rights of inmates to personal liberty and human dignity.
2. Whether the transfer of incarceration and day-to-day coercive prison powers from the state to a profit-making concessionaire constitutes an inherent rights violation regardless of actual prison conditions.
3. If a violation exists, whether it is justified under the constitutional limitations clause, including proportionality.

## Decision

- The court, by majority, invalidated the amendment as unconstitutional.
- The majority held the arrangement created a disproportionate infringement of inmates’ liberty and dignity because incarceration and continuous coercive control were delegated to a profit-driven entity.
- The majority accepted that efficiency and overcrowding relief could be proper legislative purposes but concluded less rights-restrictive alternatives existed (e.g., state-run expansion or reforms; outsourcing non-coercive services).
- A dissent would have upheld the law at that stage, preferring to evaluate constitutionality after operation began and concrete harms were shown.
- The invalidation prevented implementation of the concession and the planned privately operated prison did not open.

## Legal Principles

- Incarceration entails ongoing, severe state coercion; prisoners retain constitutional protections for dignity and liberty subject only to restrictions necessary for lawful punishment.
- Delegating core law-enforcement punishment powers—especially continuous deprivation of liberty—to a private, profit-seeking actor can itself infringe dignity and liberty, independent of proof that conditions will worsen.
- The legitimacy of imprisonment depends on serving public purposes; converting incarceration into an activity tied to private profit impermissibly treats inmates as instrumental means.
- Even where a law serves a proper purpose, a structural infringement of protected rights must satisfy proportionality, including consideration of less restrictive means and overall balance between public benefit and rights costs.

## Conclusion

The court held that authorizing a privately managed prison unconstitutionally and disproportionately infringed inmates’ rights to liberty and human dignity because incarceration is a core sovereign punishment function that cannot be transferred to a profit-motivated concessionaire, notwithstanding formal oversight mechanisms.


Academic Ctr. of L. & Bus. v. Minister of Fin., HCJ 2605/05 (Isr. Nov. 19, 2009)