Doe v. Lawrence Livermore Nat. Laboratory

• Decision Date: 11 September 1995
• Docket Number: No. 93-16792,93-16792
• Parties: 103 Ed. Law Rep. 583, 95 Cal. Daily Op. Serv. 7153, 95 Daily Journal D.A.R. 12,247 John DOE, Ph.D., and all others similarly situated, Plaintiffs-Appellants, v. LAWRENCE LIVERMORE NATIONAL LABORATORY, John Nuckolls, Director, Defendants, and The Regents of the University of California, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 771

65 F.3d 771

103 Ed. Law Rep. 583, 95 Cal. Daily Op. Serv. 7153,

95 Daily Journal D.A.R. 12,247

John DOE, Ph.D., and all others similarly situated, Plaintiffs-Appellants, v. LAWRENCE LIVERMORE NATIONAL LABORATORY, John Nuckolls, Director, Defendants, and The Regents of the University of California, Defendant-Appellee.

No. 93-16792.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 15, 1995.

Decided Sept. 11, 1995.

Richard Gayer, San Francisco, CA, for plaintiffs-appellants.

Douglas H. Barton, Hanson, Bridgett, Marcus, Vlahos & Rudy, San Francisco, CA, for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before: CHOY, CANBY and T.G. NELSON, Circuit Judges.

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 Sec. 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. Sec. 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 Sec. 1983 claim because it determined that Nuckolls was not a "person" under Sec. 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. Sec. 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 Sec. 1983 claim against Nuckolls, in his official capacity, because Nuckolls is a "person" under Sec. 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 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 Sec. 1983 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 Sec. 1983.

On December 9, 1992, the defendants moved to dismiss Doe's Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 1983 claim against the University and the Laboratory on the ground that neither is a "person" within the meaning of Sec. 1983. Finally, the defendants moved to dismiss Doe's Sec. 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 Sec. 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 Sec. 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 Sec. 1983 claim against Nuckolls in his official capacity. The district court entered a final judgment on September 16, 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...