Opinion by Judge CHOY; Dissent by Judge CANBY.
CHOY, Circuit Judge:
Appellant, Dr. John Doe, Ph.D. (“Doe”), on behalf of himself and all others similarly situated, appeals the district court’s dismissal of his breach of contract claim against the Regents of the University of California (“University”) and his § 1983 claim against John Nuckolls (“Nuckolls”), director of the Lawrence Livermore National Laboratory (“Laboratory”) which is owned by the United States Department of Energy (“Department”) and is operated by the University.
Doe is a mathematical physicist who signed an employment contract with the Laboratory. Doe contends that the Laboratory wrongfully refused to perform the contract of employment by peremptorily determining that Doe could not obtain a security clearance from the Department. The district court dismissed Doe’s breach of' contract claim against the Laboratory and the University because it held that the Laboratory and the University, as arms of the state, were immune from suit in federal court under the Eleventh Amendment. Doe appeals the district court’s decision to grant Eleventh Amendment immunity to the University, as manager of the Laboratory.
Doe also appeals the district court’s dismissal of his 42 U.S.C. § 1983 claim against Nuckolls, in his official capacity, and seeks reconsideration of his application for employment at the Laboratory without reference to security clearance matters. The district court dismissed the § 1983 claim because it determined that Nuckolls was not a “person” under § 1983 and thus was not liable for Doe’s claim which sought relief solely for a violation alleged to have occurred in the past.
Having jurisdiction under 28 U.S.C. § 1291, we reverse the district court’s dismissal of Doe’s breach of contract claim. We hold that the Eleventh Amendment does not immunize the University from suit in federal court because the University is not an “arm of the state” in this specific instance. We also reverse the dismissal of Doe’s § 1983 claim against Nuckolls, in his official capacity, because Nuckolls is a “person” under § 1983 and is liable to suit for retrospective relief. We need not address the issue of whether reconsideration of Doe’s employment constitutes prospective injunctive relief but remand to the district court for further proceedings in accordance with our holding.
I
Doe is a mathematical physicist who received his Ph.D. from Harvard University in 1981. The Laboratory is a facility operated by the University under contract with the Department. Although the University controls all employment matters at the Laboratory, the Department exclusively handles security clearances for Laboratory employees.
Doe allegedly accepted the Laboratory’s written offer of employment as a physicist in mid-June, 1991. The employment offer included a salary of $6,100 per month and required Doe to obtain a “Q” security clearance from the Department in a reasonable period of time after he became an employee of the Laboratory. Doe alleges that shortly after he accepted the employment offer, the Laboratory attempted to withdraw the offer, claiming that Doe could not obtain the required security clearance from the Department.
The contract between the United States of America (“Government”) and the University for the management and operation of the Laboratory specifies that the Department, [773] rather than the University, will pay the costs of any judgment rendered against the University in performing the contract, including all costs involved in litigation. Modification No. M205, Supplemental Agreement to Contract No. W-7405-ENG-48 (“Contract”).
On June 18, 1992, Doe filed his initial complaint against the University, its president, David Gardner (“Gardner”), the Laboratory, and its director, Nuckolls.1 The complaint contained a claim for breach of employment contract against the Laboratory, the University, Gardner, and Nuckolls. In addition, the complaint contained a § 1988 claim against the Laboratory, the University, and Nuckolls and Gardner, in their official capacities, alleging deprivation of due process of law because unqualified personnel at the Laboratory peremptorily determined eligibility for a “Q” security clearance in violation of federal security clearance regulations. Finally, the complaint contained a claim for failure to enforce security regulations. On October 22,1992, Doe amended his complaint to add allegations suing Nuckolls and three additional employees of the University, all in their individual capacities, for violation of § 1988.
On December 9, 1992, the defendants moved to dismiss Doe’s § 1983 claim on the ground that the University and the Laboratory, as arms of the State, and Gardner and Nuckolls, in their official capacities, are not “persons” within the meaning of § 1983. In addition, the defendants sought to dismiss the three newly-added University employees and Nuckolls, in his individual capacity, on the ground that the statute of limitation period had run. Finally, Gardner and Nuckolls moved to dismiss Doe’s breach of contract claim on the ground that neither was alleged to be party to the employment contract.
On February 5, 1993, the district court dismissed all claims against Gardner, the breach of contract claim against Nuckolls, and the § 1983 claim against the University, the Laboratory, the three University employees, and Nuckolls, in his official capacity. In its order, however, the district court noted that a plaintiff may assert a § 1983 claim against a state official, acting in her official capacity, if the plaintiff seeks prospective injunctive relief. Doe’s breach of contract claim against the University and the Laboratory, and his § 1983 claim against Nuckolls, in his individual capacity, survived.
On April 7, 1993, Doe filed a second amended complaint which contained two claims. The first claim, against the Laboratory and the University, alleged breach of employment contract. Doe also brought a § 1983 claim, seeking declaratory and prospective injunctive relief, against the University, the Laboratory, and Nuckolls, in his official and individual capacities. Finally, the second amended complaint added class action allegations.
On May 10,1993, the defendants moved to dismiss Doe’s breach of contract claim against the University and the Laboratory on the ground that they were immune from suit under the Eleventh Amendment. In addition, the defendants moved to dismiss Doe’s renewed § 1983 claim against the University and the Laboratory on the ground that neither is a “person” within the meaning of § 1983. Finally, the defendants moved to dismiss Doe’s § 1983 claim against Nuckolls, in his official capacity, insofar as the claim was based upon alleged past violations of law because Nuckolls is not a “person” for such retrospective § 1983 relief.
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Opinion by Judge CHOY; Dissent by Judge CANBY.
CHOY, Circuit Judge:
Appellant, Dr. John Doe, Ph.D. (“Doe”), on behalf of himself and all others similarly situated, appeals the district court’s dismissal of his breach of contract claim against the Regents of the University of California (“University”) and his § 1983 claim against John Nuckolls (“Nuckolls”), director of the Lawrence Livermore National Laboratory (“Laboratory”) which is owned by the United States Department of Energy (“Department”) and is operated by the University.
Doe is a mathematical physicist who signed an employment contract with the Laboratory. Doe contends that the Laboratory wrongfully refused to perform the contract of employment by peremptorily determining that Doe could not obtain a security clearance from the Department. The district court dismissed Doe’s breach of' contract claim against the Laboratory and the University because it held that the Laboratory and the University, as arms of the state, were immune from suit in federal court under the Eleventh Amendment. Doe appeals the district court’s decision to grant Eleventh Amendment immunity to the University, as manager of the Laboratory.
Doe also appeals the district court’s dismissal of his 42 U.S.C. § 1983 claim against Nuckolls, in his official capacity, and seeks reconsideration of his application for employment at the Laboratory without reference to security clearance matters. The district court dismissed the § 1983 claim because it determined that Nuckolls was not a “person” under § 1983 and thus was not liable for Doe’s claim which sought relief solely for a violation alleged to have occurred in the past.
Having jurisdiction under 28 U.S.C. § 1291, we reverse the district court’s dismissal of Doe’s breach of contract claim. We hold that the Eleventh Amendment does not immunize the University from suit in federal court because the University is not an “arm of the state” in this specific instance. We also reverse the dismissal of Doe’s § 1983 claim against Nuckolls, in his official capacity, because Nuckolls is a “person” under § 1983 and is liable to suit for retrospective relief. We need not address the issue of whether reconsideration of Doe’s employment constitutes prospective injunctive relief but remand to the district court for further proceedings in accordance with our holding.
I
Doe is a mathematical physicist who received his Ph.D. from Harvard University in 1981. The Laboratory is a facility operated by the University under contract with the Department. Although the University controls all employment matters at the Laboratory, the Department exclusively handles security clearances for Laboratory employees.
Doe allegedly accepted the Laboratory’s written offer of employment as a physicist in mid-June, 1991. The employment offer included a salary of $6,100 per month and required Doe to obtain a “Q” security clearance from the Department in a reasonable period of time after he became an employee of the Laboratory. Doe alleges that shortly after he accepted the employment offer, the Laboratory attempted to withdraw the offer, claiming that Doe could not obtain the required security clearance from the Department.
The contract between the United States of America (“Government”) and the University for the management and operation of the Laboratory specifies that the Department, [773] rather than the University, will pay the costs of any judgment rendered against the University in performing the contract, including all costs involved in litigation. Modification No. M205, Supplemental Agreement to Contract No. W-7405-ENG-48 (“Contract”).
On June 18, 1992, Doe filed his initial complaint against the University, its president, David Gardner (“Gardner”), the Laboratory, and its director, Nuckolls.1 The complaint contained a claim for breach of employment contract against the Laboratory, the University, Gardner, and Nuckolls. In addition, the complaint contained a § 1988 claim against the Laboratory, the University, and Nuckolls and Gardner, in their official capacities, alleging deprivation of due process of law because unqualified personnel at the Laboratory peremptorily determined eligibility for a “Q” security clearance in violation of federal security clearance regulations. Finally, the complaint contained a claim for failure to enforce security regulations. On October 22,1992, Doe amended his complaint to add allegations suing Nuckolls and three additional employees of the University, all in their individual capacities, for violation of § 1988.
On December 9, 1992, the defendants moved to dismiss Doe’s § 1983 claim on the ground that the University and the Laboratory, as arms of the State, and Gardner and Nuckolls, in their official capacities, are not “persons” within the meaning of § 1983. In addition, the defendants sought to dismiss the three newly-added University employees and Nuckolls, in his individual capacity, on the ground that the statute of limitation period had run. Finally, Gardner and Nuckolls moved to dismiss Doe’s breach of contract claim on the ground that neither was alleged to be party to the employment contract.
On February 5, 1993, the district court dismissed all claims against Gardner, the breach of contract claim against Nuckolls, and the § 1983 claim against the University, the Laboratory, the three University employees, and Nuckolls, in his official capacity. In its order, however, the district court noted that a plaintiff may assert a § 1983 claim against a state official, acting in her official capacity, if the plaintiff seeks prospective injunctive relief. Doe’s breach of contract claim against the University and the Laboratory, and his § 1983 claim against Nuckolls, in his individual capacity, survived.
On April 7, 1993, Doe filed a second amended complaint which contained two claims. The first claim, against the Laboratory and the University, alleged breach of employment contract. Doe also brought a § 1983 claim, seeking declaratory and prospective injunctive relief, against the University, the Laboratory, and Nuckolls, in his official and individual capacities. Finally, the second amended complaint added class action allegations.
On May 10,1993, the defendants moved to dismiss Doe’s breach of contract claim against the University and the Laboratory on the ground that they were immune from suit under the Eleventh Amendment. In addition, the defendants moved to dismiss Doe’s renewed § 1983 claim against the University and the Laboratory on the ground that neither is a “person” within the meaning of § 1983. Finally, the defendants moved to dismiss Doe’s § 1983 claim against Nuckolls, in his official capacity, insofar as the claim was based upon alleged past violations of law because Nuckolls is not a “person” for such retrospective § 1983 relief.
On June 24, 1993, the district court granted the motion to dismiss all aspects relevant to this appeal. The district court dismissed the breach of contract claim against the University and the Laboratory on Eleventh Amendment ground. The district court also dismissed the § 1983 claim against the University and the Laboratory, noting that the same claim already had been dismissed in its February 5, 1993 order. Finding that the relief Doe sought — reconsideration of his employment application — did not constitute prospective injunctive relief, the district court dismissed Doe’s § 1983 claim against Nuc-kolls in his official capacity. The district court entered a final judgment on September [774]*77416, 1993, and Doe timely filed a notice of appeal on September 22, 1993.
II
Doe contends that the district court erred when it dismissed his breach of employment contract claim against the University, as manager of the Laboratory, on the ground that the Eleventh Amendment of the United States Constitution grants the University immunity from suit in federal court. A determination of a state’s immunity from suit under the Eleventh Amendment is a question of law which is reviewed de novo. BV Eng’g v. University of Cal., L.A., 858 F.2d 1394, 1395 (9th Cir.1988), cert. denied, 489 U.S. 1090, 109 S.Ct. 1557, 103 L.Ed.2d 859 (1989).
The Eleventh Amendment provides:
The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
U.S. Const, amend. XI. The United States Supreme Court has extended the reach of the Eleventh Amendment to bar federal courts from presiding over any suit in which a state or “arm of the state” is a defendant. State Highway Comm’n v. Utah Constr. Co., 278 U.S. 194, 199, 49 S.Ct. 104, 106, 73 L.Ed. 262 (1929). However, “not all state-created or state-managed entities are immune from suit in federal court.... an entity may be organized or managed in such a way that it does not qualify as an arm of the state entitled to sovereign immunity.” Durning v. Citibank, N.A., 950 F.2d 1419, 1423 (9th Cir.1991).
We apply a five-factor analysis to determine whether the University, acting in a managerial capacity for the Laboratory, is an arm of the state and thus entitled to Eleventh Amendment immunity from suit in federal court. See Mitchell v. Los Angeles Community College Dist., 861 F.2d 198, 201 (9th Cir.1988) (considering the source of funding for California state colleges and universities to determine whether they are protected by Eleventh Amendment immunity), cert. denied, 490 U.S. 1081, 109 S.Ct. 2102, 104 L.Ed.2d 663 (1989). The five factors are:
[1] whether a money judgment would be satisfied out of state funds, [2] whether the entity performs central governmental functions, [3] whether the entity may sue or be sued, [4] whether the entity has power to take property in its own name or only the name of the state, and [5] the corporate status of the entity.
ITSI TV Prods. v. Agricultural Ass’ns, 3 F.3d 1289, 1292 (9th Cir.1993).
State liability for money judgment is the single most important factor in determining whether an entity is an arm of the state. Durning, 950 F.2d at 1424. We must evaluate “whether a judgment against the defendant entity under the terms of the complaint would have to be satisfied out of the limited resources of the entity itself or whether the state treasury would also be legally pledged to satisfy the obligation.” Id. We conclude that this factor weighs against granting the University Eleventh Amendment immunity from suit in federal court. The Contract makes clear that the Department, and not the State of California, is liable for any judgment rendered against the University in its performance of the Contract. ‘When a state entity is structured so that its obligations are its own special obligations and not general obligations of the state, that fact weighs against a finding of sovereign immunity under the arm of the state doctrine....” Id. at 1425-26.
The second factor, whether the University performs central government functions, weighs in favor of finding that the University is an arm of the state and granting it Eleventh Amendment immunity. In analyzing this factor, we look at the overall function of the University and not merely to the specific function it performs in relation to the Laboratory. See id. at 1426. We look to the way California law treats the University in order to assess whether the University performs central government functions. Id. at 1423. The California State Attorney General has stated that the University is “a branch of the state government equal and coordinate with the Legislature, the judiciary, and the executive.” 30 Ops.Cal.Att'y Gen. 162, 166 (1957). [775] California case law also clearly recognizes the University as a branch of the state government. See Ishimatsu v. Regents of Univ. of Cal., 266 Cal.App.2d 864, 72 Cal.Rptr. 756, 762-68 (1968); Regents of Univ. of Cal. v. City of Santa Monica, 77 Cal.App.3d 130, 143 Cal.Rptr. 276, 279 (1978). Finally, the California Education Code defines the University’s mission, accords the University with exclusive jurisdiction over education in certain professions, and allocates to it the primary responsibility for “state-supported academic ... research.” Cal.Educ.Code § 66010.4(c) (West Supp.1995). The regulation of public education is an important central government function, thus the second factor weighs in favor of granting immunity to the University.
The University is not entitled to Eleventh Amendment immunity, however, because the remaining factors, in addition to the first and most important factor, weigh against a finding of immunity. The third factor weighs against immunity because the California Constitution grants the University “the power to sue and be sued.” Cal. Const, art. 9, § 9(f). The fourth factor, whether the entity may take property in its own name, also weighs against immunity. The University is vested “with the legal title and the management and disposition of the property of the university” and is given the “power to take and hold, either by purchase or by donation, ... all real and personal property for the benefit of the university.” Id. Finally, the fifth factor weighs against immunity because the California Constitution establishes a “corporation known as ‘The Regents of the University of California.’” Cal. Const, art. 9, § 9(a).
The district court erred when it relied upon Thompson v. City of L.A., 885 F.2d 1439, 1443 (9th Cir.1989) (holding that the University was immune from a civil rights suit in federal court where the State of California would have been ultimately responsible for payment of the judgment) and Jackson v. Hayakawa, 682 F.2d 1344, 1350 (9th Cir.1982) (stating in dictum, that the University was an instrumentality of the state), to rule that the University is always immune from suit in federal court.
The district court should have applied the five-factor analysis to this unique situation in which the Department, and not the State of California, pays for any judgment rendered against the University in its management of the Laboratory. It is true that the University has been granted Eleventh Amendment immunity in a number of cases. See, e.g., Hamilton v. Regents of the Univ. of Cal., 293 U.S. 245, 257, 55 S.Ct. 197, 201, 79 L.Ed. 343 (1934); Thompson, 885 F.2d at 1443; B.V. Eng’g, 858 F.2d at 1395 (citing Jackson, 682 F.2d at 1350); Vaughn v. Regents of the Univ. of Cal., 504 F.Supp. 1349, 1351-54 (E.D.Cal.1981). However, previous grants of immunity in contexts where the State of California is financially responsible for the University do not automatically translate into immunity in this unique situation. Vaughn, 504 F.Supp. at 1352-54 (examining the pertinent factors as they relate to the University in order to determine whether the University is entitled to Eleventh Amendment immunity, rather than blindly asserting immunity).
The University is an enormous entity which functions in various capacities and which is not entitled to Eleventh Amendment immunity for all of its functions. See, e.g. Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 940 (Fed.Cir.1993) (recognizing that Congress has abrogated the University’s immunity from suit in federal court for violation of patent law), cert. denied, — U.S. -, 114 S.Ct. 1126, 127 L.Ed.2d 434 (1994); In re Holoholo, 512 F.Supp. 889, 901-02 (D.Haw.1981) (finding that the University waived its Eleventh Amendment immunity by signing a government contract that contemplated possible suits against it in federal court and by entering into a federally regulated area), superseded by statute, not in relevant part, as stated in, Bator v. Judiciary, Adult Probation Div., 1992 WL 690295, 1992 U.S.Dist. Lexis 22214 (D.Haw. May 20, 1992). The source of funding in each situation, in addition to the four other factors for determining Eleventh Amendment immunity, must be examined closely to ascertain that the University is indeed functioning as an arm of the state.
The University argues that the district court in Holoholo, 512 F.Supp. at 895, held [776] that the University is an arm of the state despite an indemnification provision similar to the one in the Contract in this case. The district court in that case held that “since the [University] depends upon appropriations by the California Legislature, any damages awarded against the [University] would, absent insurance or other indemnification, come from the state treasury.” Id. at 895 (emphasis added). In making that statement, the district court had not considered the specific indemnification provision in the contract between the University and the United States and later acknowledged that “the exact nature and extent of the indemnification are not elear[,]” but that the indemnification provision “could render the Eleventh Amendment inapplicable to these state defendants [including the University].” Id. at 899 n. 14.
After applying the five-factor analysis, we find that the University, acting in a managerial capacity for the Laboratory, has not satisfied the burden of proving that it is entitled to Eleventh Amendment immunity. Because we hold that the University, in this specific instance, is not entitled to Eleventh Amendment immunity from suit in federal court, we need not address whether the University has waived or Congress has abrogated the University’s immunity. See BV Eng’g, 858 F.2d at 1396.
Ill
Doe next contends that the district court erred when it dismissed his § 1983 claim against Nuckolls, in his official capacity. We have determined that the University is not protected by the Eleventh Amendment from suit in federal court because the University, in this particular instance, is not functioning as an arm of the state. Because we hold that the University is not an arm of the state in this instance, it is a “person” under § 1983. See Will v. Michigan Dep’t of State Police, 491 U.S. 58, 70, 109 S.Ct. 2304, 2312, 105 L.Ed.2d 45 (1989); see also Fuchilla v. Layman, 109 N.J. 319, 537 A.2d 652, 654 cert. denied, 488 U.S. 826, 109 S.Ct. 75, 102 L.Ed.2d 51 (1988). Nuckolls, acting as the director of the University-managed Laboratory, is therefore not a state official but a “person” who is fully hable under § 1983. See Thompson, 885 F.2d at 1442-43 (“only those governmental entities which are ‘persons’ within the meaning of § 1983 can be held hable under § 1983.”).
Because we hold that the University and Nuckolls, acting in his official capacity, are fully hable to suit under § 1983, we need not address the question of whether reconsideration of Doe’s employment by the Laboratory constitutes prospective injunctive rehef. Doe may sue both the University and Nuckolls in federal court regardless of whether the rehef he seeks constitutes prospective or retrospective rehef. We remand to the district court for further proceedings in accordance with our ruling. We deny Doe’s request for attorney’s fees because the defendants brought forth a legitimate argument on the basis of Eleventh Amendment immunity.
REVERSED and REMANDED.