At a press conference in January 2010, California Governor Arnold Schwarzenegger proposed sending undocumented inmates from California prisons to cheaper, privately run prisons in Mexico as a solution to the state’s budget crisis and prison overcrowding problems. Though seemingly far-fetched, the Governor’s proposal represents a creative solution to a nation-wide problem of growing illegal immigrant populations, overburdened penal systems, and increasing pressures to cut costs. National trends in privatization and the offshoring of government functions make exporting inmates to lower cost prisons abroad a tempting remedy, albeit one that is fraught with legal complications. This Note argues that the California Governor’s proposal is infeasible because it does not fit within the existing U.S.-Mexico treaty structure and California is constitutionally prohibited from entering into its own treaty with Mexico. Furthermore, the massive civil liability risk created by a private extra-territorial prison substantially reduces the cost savings incentives.