As governments increasingly delegate traditional public functions to private, forprofit entities, the federal civil rights statute, 42 USC § 1983, has the potential to play an important role in encouraging private entities to respect constitutional rights when they take on public duties. That potential is undermined, however, by the prevailing view that private entities subject to § 1983 should be exempt from the traditional tort principle of respondeat superior liability simply because the Supreme Court already has held that municipal entities are exempt. Exempting private entities carries significant implications, not only because of the growing privatization of government functions, but also because respondeat superior liability often is critical for fulfilling tort law objectives of deterrence and compensation.

This Article examines differences regarding how private entities and governmental entities behave and contends that those differences justify imposing respondeat superior liability on private § 1983 defendants even if public § 1983 defendants remain exempt. Initially, the Supreme Court’s rationale for exempting municipalities from respondeat superior liability was particular to public entities and does not justify exempting private parties from respondeat superior liability. Additionally, as a policy matter, the fact that profit-motivated, private entities may be both more responsive than electorally accountable public entities to tort liability incentives and less responsive to other nonfinancial constraints on behavior suggests that respondeat superior may be better suited for deterring private misconduct than public misconduct. Imposing respondeat superior liability on private parties therefore can help ensure that when private parties agree to perform important public functions, they will not diminish important constitutional values.