FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MICHAEL M. SATO,

Plaintiff-Appellant,

v.

ORANGE COUNTY DEPARTMENT OF 

EDUCATION,

Defendant-Appellee.

No. 15-56402

D.C. No.

8:15-cv-00311-

JLS-JCG

OPINION

Appeal from the United States District Court

for the Central District of California

Josephine L. Staton, District Judge, Presiding

Argued and Submitted February 16, 2017

Pasadena, California

Filed June 28, 2017

Before: Richard C. Tallman and N. Randy Smith, Circuit 

Judges, and Stephen Joseph Murphy III,* District Judge.

Opinion by Judge Tallman

 * The Honorable Stephen Joseph Murphy III, United States District 

Judge for the Eastern District of Michigan, sitting by designation.
2 SATO V. ORANGE CTY. DEP’T OF EDUC.

SUMMARY**

Civil Rights

The panel affirmed the district court’s dismissal of a 

lawsuit brought pursuant to 42 U.S.C. § 1983 and state law 

by a former employee of the Orange County Department of 

Education who alleged that his termination violated his 

Fourteenth Amendment substantive and procedural due 

process rights and constituted a breach of contract. 

The district court found that the Orange County 

Department of Education, as an arm of the state, was 

immune from suit under the Eleventh Amendment. In 

affirming the district court, the panel rejected plaintiff’s 

contention that California Assembly Bill 97, which 

streamlined public education financing and decentralized 

education governance, abrogated the holding in Belanger v. 

Madera Unified School District, 963 F.2d 248 (9th Cir. 

1992), that California school districts are entitled to 

sovereign immunity.

Applying the factors set forth in Mitchell v. Los Angeles 

Community College District, 861 F.2d 198 (9th Cir. 1988), 

the panel held that California school districts and County 

Offices of Education remain arms of the state and continue 

to enjoy Eleventh Amendment immunity. The panel held 

that AB 97 reformed the financing and governance of 

California public schools in important ways, but it did not so 

fundamentally alter the relationship between Offices of 

 ** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
SATO V. ORANGE CTY. DEP’T OF EDUC. 3

Education and the state as to abrogate this court’s decision 

in Belanger.

COUNSEL

Douglas A. Ames (argued), Ames Law Office, Fountain 

Valley, California, for Plaintiff-Appellant.

Jeffrey P. Thompson (argued) and Gregory A. Wille, 

Declues Burkett & Thompson APC, Huntington Beach, 

California, for Defendant-Appellee.

OPINION

TALLMAN, Circuit Judge:

In 2013, the California legislature enacted Assembly Bill 

97 (AB 97), a massive reform package designed to 

streamline public education financing and decentralize 

education governance. 2013 Cal. Legis. Serv. ch. 47 (A.B. 

97). This appeal asks us to consider whether AB 97 

abrogated our decisions in Belanger v. Madera Unified 

School District, 963 F.2d 248 (9th Cir. 1992), and 

Eaglesmith v. Ward, 73 F.3d 857 (9th Cir. 1996), in which 

we held that California school districts and county offices of 

education (COEs) are “arms of the state” entitled to state 

sovereign immunity. We hold that the passage of AB 97 had 

no such effect. School districts and COEs in California 

remain arms of the state and cannot face suit.
4 SATO V. ORANGE CTY. DEP’T OF EDUC.

I

Defendant Orange County Department of Education 

(OCDE) hired plaintiff Michael Sato as a Systems Database 

Architect in August 2014. Within a matter of weeks after 

Sato started working at OCDE, Sato’s supervisors informed 

him that he would be terminated immediately. OCDE 

offered no explanation as to why Sato was being terminated, 

and Sato insisted that he had performed his duties 

satisfactorily during his brief period of probationary 

employment with OCDE. Before he was fired, Sato received 

no oral or written notice of his termination, and he was given 

no opportunity to be heard at a pre- or post-termination 

proceeding.

Sato sued OCDE for damages in federal district court, 

asserting claims under 42 U.S.C. § 1983 and state law. In 

his complaint, Sato alleged that, under his employment 

contract with OCDE, Sato could only be fired for cause, even 

during his initial one-year probationary period.1 Sato 

claimed that his termination without prior notice or a pre- or 

post-termination hearing therefore violated his Fourteenth 

 1 Sato alleged that the terms of his employment contract were 

contained in OCDE’s Management Employee Guidelines. The operative 

version of the Guidelines provided that “classified management 

employees,” who are “employee[s] in a position not requiring 

certification under the California Education Code,” may “be terminated 

during the probationary period for failing to meet the expectations of the 

job.” Orange Cty. Dep’t of Educ., Management Employee Guidelines 3 

(May 30, 2013). We assume without deciding that the Guidelines 

conferred a property interest in Sato’s continued employment with 

OCDE.
SATO V. ORANGE CTY. DEP’T OF EDUC. 5

Amendment substantive and procedural due process rights 

and constituted breach of contract.

OCDE moved to dismiss Sato’s complaint under Federal 

Rules of Civil Procedure 12(b)(1) and 12(b)(6),2 arguing 

that, pursuant to our decision in Belanger, OCDE is an arm 

of the state and enjoys Eleventh Amendment immunity from 

suit.3 Sato responded that “the California Legislature’s 

massive 2013 enactment of Assembly Bill 97 completely 

replaces the prior statutory basis for, and upends the analysis 

of, Belanger.” According to Sato, after the passage of AB 

97, OCDE is no longer an arm of the state for sovereign 

immunity purposes.

The district court granted OCDE’s Rule 12(b)(6) motion 

with respect to Sato’s constitutional claims, but denied 

OCDE’s motion with respect to the breach of contract 

 2 A sovereign immunity defense is “quasi-jurisdictional” in nature 

and may be raised in either a Rule 12(b)(1) or 12(b)(6) motion. Compare 

Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir. 2015) (“Although 

sovereign immunity is only quasi-jurisdictional in nature, Rule 12(b)(1) 

is still a proper vehicle for invoking sovereign immunity from suit.”), 

with Eason v. Clark Cty. Sch. Dist., 303 F.3d 1137, 1140 (9th Cir. 2002) 

(deciding sovereign immunity question on appeal of the district court’s 

grant of a Rule 12(b)(6) motion).

3 We extended Belanger’s holding to California COEs, like OCDE, 

in Eaglesmith v. Ward, 73 F.3d 857, 860 (9th Cir. 1995). COEs are 

county-level administrative units that provide operational support to 

school districts within their jurisdiction and also administer alternative 

schools, primarily for youth in the juvenile justice system. See Legis. 

Analyst’s Office, How Are County Offices of Education (COEs) Funded 

Under the Local Control Funding Formula (LCFF)? (Cal. 2014), 

available at http://www.lao.ca.gov/sections/education/ed-basics/HowAre-COEs-Funded-Under-the-LCFF.pdf.
6 SATO V. ORANGE CTY. DEP’T OF EDUC.

claim.4 On the issue of sovereign immunity, the district 

court held that while the passage of AB 97 had perhaps 

decentralized state control over school funding and 

governance to some extent, Sato failed to show that AB 97 

undermined our reasoning in Belanger. Recognizing that 

OCDE’s sovereign immunity defense applied equally to his 

federal and state claims, Sato then voluntarily dismissed his 

state breach of contract claim. After granting Sato’s 

voluntary dismissal motion, the district court entered final 

judgment in favor of OCDE. We have jurisdiction under 

28 U.S.C. § 1291, and we affirm.

II

A

We review the district court’s grant of OCDE’s Rule 

12(b)(6) motion de novo, “accepting as true all well-pleaded 

allegations of fact in the complaint and construing them in 

the light most favorable to the plaintiffs.” Eason v. Clark 

Cty. Sch. Dist., 303 F.3d 1137, 1140 (9th Cir. 2002) (quoting 

Zimmerman v. City of Oakland, 255 F.3d 734, 737 (9th Cir. 

2001)). We also review de novo whether a party is entitled 

to Eleventh Amendment sovereign immunity. Id. “[A]n 

entity invoking Eleventh Amendment immunity bears the 

burden of asserting and proving those matters necessary to 

establish its defense.” Del Campo v. Kennedy, 517 F.3d 

1070, 1075 (9th Cir. 2008) (internal quotation mark omitted) 

(quoting In re Lazar, 237 F.3d 967, 974 (9th Cir. 2001)).

 4 The district court declined to dismiss Sato’s breach of contract 

claim on sovereign immunity grounds because OCDE failed to raise 

sovereign immunity as a defense to that claim specifically.
SATO V. ORANGE CTY. DEP’T OF EDUC. 7

Whether the passage of AB 97 abrogates our arm-of-thestate analysis in Belanger presents us with an issue of first 

impression. While we have applied Belanger and dismissed 

suits against California school districts since AB 97 was 

enacted, none of those cases considered AB 97’s potential 

effects on Belanger. See, e.g., Davis v. Folsom Cordova 

Unified Sch. Dist., 674 F. App’x 699, 701 (9th Cir. 2017);

Chadam v. Palo Alto Unified Sch. Dist., 666 F. App’x 615, 

618 (9th Cir. 2016); Pierce v. Santa Maria Joint Union High 

Sch. Dist., 612 F. App’x 897, 898 (9th Cir. 2015); C.W. v. 

Capistrano Unified Sch. Dist., 784 F.3d 1237, 1247 (9th Cir. 

2015); Brynjolfsson v. State Agency L.A. Unified Sch. Dist., 

576 F. App’x 697, 698 (9th Cir. 2014). Because none of 

those cases raised the particular question that confronts us 

today, we are not bound by them. Cf. Minority Television 

Project, Inc. v. FCC, 736 F.3d 1192, 1211 (9th Cir. 2013) 

(“Courts ‘are not bound by a prior exercise of jurisdiction in 

a case where it was not questioned and it was passed sub 

silentio.’” (quoting United States v. L.A. Tucker Truck Lines, 

Inc., 344 U.S. 33, 38 (1952))).

B

The Eleventh Amendment provides that “[t]he 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. “It is well established that agencies of the state 

are immune under the Eleventh Amendment from private 

damages or suits for injunctive relief brought in federal 

court.” Savage v. Glendale Union High Sch., 343 F.3d 1036, 

1040 (9th Cir. 2003). State sovereign immunity does not 

extend to county and municipal governments, unless state 

law treats them as arms of the state. Id. at 1040–41. The 
8 SATO V. ORANGE CTY. DEP’T OF EDUC.

question before us is thus whether, after AB 97, OCDE “is 

to be treated as an arm of the State partaking of the State’s 

Eleventh Amendment immunity, or instead is to be treated 

as a municipal corporation or other political subdivision to 

which the Eleventh Amendment does not extend.” See Holz 

v. Nenana City Pub. Sch. Dist., 347 F.3d 1176, 1180 (9th 

Cir. 2003) (internal quotation mark omitted) (quoting Mt. 

Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 

280 (1977)).

To determine whether a government entity is an arm of 

the state, we examine the five factors set forth in Mitchell v. 

Los Angeles Community College District, 861 F.2d 198 (9th 

Cir. 1988):

[1] whether a money judgment would be 

satisfied out of state funds, [2] whether the 

entity performs central government 

functions, [3] whether the entity may sue or 

be sued, [4] whether the entity has the power 

to take property in its own name or only the 

name of the state, and [5] the corporate status 

of the entity.

Belanger, 963 F.2d at 250–51 (quoting Mitchell, 861 F.2d at 

201). We apply these factors to the question at hand.

AB 97 reformed education funding and governance in 

California in two key respects. First, it replaced the old 

mechanism by which the state funded public education, 

which relied on a combination of “revenue limits” funding 

and “categorical funding grants,” with the Local Control 

Funding Formula (LCFF). The LCFF streamlined the 

number of state funding sources and increased K-12 

spending, particularly for low-income and Englishlanguage-learner (ELL) student populations. Second, AB 97 
SATO V. ORANGE CTY. DEP’T OF EDUC. 9

required that school districts and COEs develop Local 

Control and Accountability Plans (LCAPs) to measure 

progress toward state and district goals for student 

achievement.

Under the Mitchell factors, we conclude that AB 97 did 

not upend Belanger and Eaglesmith, and we affirm dismissal 

of Sato’s complaint.

1

The first Mitchell factor—whether a money judgment 

against the government entity would be satisfied out of state 

funds—is the most important. Eason, 303 F.3d at 1141; see 

also Savage, 343 F.3d at 1041 (“Because the impetus of the 

Eleventh Amendment is the prevention of federal-court 

judgments that must be paid out of a state’s treasury, ‘[t]he 

vulnerability of the State’s purse [is] the most salient factor 

in Eleventh Amendment determinations.’” (alterations in 

original) (quoting Hess v. Port Auth. Trans-Hudson Corp., 

513 U.S. 30, 48 (1994))). In evaluating this factor, “the 

relevant inquiry is whether [the state] will be legally required 

to satisfy any monetary judgment obtained against the 

[d]istrict,” not whether state funds will actually be used. 

Eason, 303 F.3d at 1142; see also Holz, 347 F.3d at 1182 

(finding the first Mitchell factor disfavored immunity for the 

defendant school district, even though the district received 

98% of its funding from the state, because Alaska law 

disclaimed the state’s responsibility for school district

debts).

In Belanger, we explained that California’s unique 

revenue limits system resulted in the state’s legal liability for 

judgments against school districts. 963 F.2d at 252. Under 
10 SATO V. ORANGE CTY. DEP’T OF EDUC.

this system, state law established a maximum per-pupil5

spending amount, equalized across school districts. Id. The 

state computed the “revenue limit” for each school district 

by multiplying the statutory per-pupil funding allotment by 

the number of students in that district. Id. To ensure districts 

and COEs were funded to the revenue limit, the state 

subtracted the value of local property taxes from the revenue 

limit and contributed the remaining amount. Id. (citing Cal. 

Educ. Code §§ 41600–41610, 42238–42251 (1992)). 

Administering this funding scheme meant that “state and 

local revenue [was] commingled in a single fund under state 

control.” Id. And because revenue limits established a 

maximum, equalized funding level,

local tax revenue lost to a judgment [had to] 

be supplanted by the interchangeable state 

funds already in the district budget. Any 

local funds withdrawn from the budget to pay 

a judgment [were] unavailable for 

educational purposes, and state funds in the 

budget must cover any critical educational 

expenses that the local funds would have 

covered absent the judgment.

Id. In other words, to guarantee that districts and COEs were 

funded at the statutory revenue limit, the state would be 

required to backfill any outlay of funds used to satisfy a 

judgment against a district or COE. Revenue limits thus had 

 5 Many California statutes calculate school district and COE funding 

on an “average daily attendance” basis, see, e.g., Cal. Educ. Code. 

§§ 2574(a)(3), 42238.02(d), which approximates a per-pupil basis, 

Serrano v. Priest (Serrano I), 487 P.2d 1241, 1246 n.4 (Cal. 1971). We 

use “per pupil” or “per student” instead of “average daily attendance” for 

simplicity.
SATO V. ORANGE CTY. DEP’T OF EDUC. 11

the effect of making the state legally liable for any judgment 

against a school district.

Outside of California, in states that set a minimum, rather 

than a maximum, per-pupil funding amount, we have found 

that the first Mitchell factor disfavors immunity for school 

districts. See, e.g., Holz, 347 F.3d at 1184 (Alaska); Savage, 

343 F.3d at 1044 (Arizona); Eason, 303 F.3d at 1143 

(Nevada). In Alaska and Nevada, for example, the state 

guarantees minimum funding for school districts—called the 

“basic support guarantee” in Nevada and the “basic need” in 

Alaska—and school districts are free to raise additional 

revenue beyond that amount. Holz, 347 F.3d at 1183–84;

Eason, 303 F.3d at 1142–43. Because per-pupil spending 

need not be equalized across districts, we held it was “not 

necessarily true that an amount withdrawn from a school 

district’s account in order to pay a judgment will be replaced 

with state money.” Holz, 348 F.3d at 1184 (quoting Eason, 

303 F.3d at 1143). Similarly, in Savage, we held the state of 

Arizona would not be liable for judgments against school 

districts, as districts’ funds “are not subject to state control, 

are not subject to a Belanger-style spending-cap, and will not 

be replenished with money out of the state treasury.” 

343 F.3d at 1044.

Sato argues that when AB 97 replaced revenue limits 

with the LCFF, it replaced a maximum per-pupil funding 

formula with a minimum per-pupil formula. According to 

Sato, school districts and COEs in California, like those in 

Alaska, Arizona, and Nevada, are now free to raise local 

property tax revenues as much as they want to supplement 

minimum state support.

We find Sato’s arguments without merit. As we noted in 

Belanger, equalization of per-pupil spending in California is 

not simply a matter of policy, but of state constitutional law. 
12 SATO V. ORANGE CTY. DEP’T OF EDUC.

963 F.2d at 251. In two decisions from the 1970s—Serrano 

v. Priest (Serrano I), 487 P.2d 1241 (Cal. 1971), and Serrano 

v. Priest (Serrano II), 557 P.2d. 929 (Cal. 1976)—the 

California Supreme Court declared that disparities in perpupil spending, driven by differences in districts’ ability to 

generate local property tax revenues, violated the equal 

protection guarantees of the state constitution. Serrano II, 

557 P.2d at 957–58; Serrano I, 487 P.2d at 1263. Nowhere 

in AB 97 does the California legislature attempt to amend 

the state constitution’s equal protection provisions, and thus 

we assume that the constitutional precepts announced in 

Serrano I and Serrano II remain good law. See Methodist 

Hosp. of Sacramento v. Saylor, 488 P.2d 161, 164–65 (Cal. 

1971) (“Unlike the federal Constitution, which is a grant of 

power to Congress, the California Constitution is a limitation 

or restriction on the powers of the Legislature.”).

Even putting state constitutional issues aside, Sato’s 

characterization of the LCFF as a minimum per-pupil 

funding formula is at odds with the text of AB 97, which 

demonstrates the legislature’s intent to maintain equalization 

of per-pupil spending. Under the LCFF, districts and COEs 

receive a “base grant” amount for each student, and they may 

receive additional “supplemental grant” and “concentration 

grant” funding depending on the number of low-income and 

ELL students.6 Cal. Educ. Code § 2574(b)–(c) (COEs); id. 

§ 42238.02(b)–(f) (districts). Supplemental grants provide 

school districts with additional funding equal to 20% of the 

base grant for each low-income or ELL student in the 

 6 For COEs, base grants, supplemental grants, and concentration 

grants support alternative public schools operated by COEs. Cal. Educ. 

Code § 2574(c). COEs also receive operational grants, which fund the 

services that COEs provide to school districts within their jurisdiction. 

Id. § 2574(a).
SATO V. ORANGE CTY. DEP’T OF EDUC. 13

district; concentration grants provide an additional 50% of 

the base grant amount for each low-income or ELL student, 

if the proportion of low-income/ELL students exceeds 55% 

of total enrollment. Id. § 42238.02(e)–(f).

As explained by the California Legislative Analyst’s 

Office, the combination of base, supplemental, and 

concentration grants ensures that “[d]istricts serving the 

same number of students in the same grade spans with the 

same characteristics receive the same amount of funding.”7 

Moreover, the state calculates its funding share to districts 

and COEs in the same manner as under the revenue limits 

system: the state’s contribution is equal to the statedetermined LCFF funding target minus local property tax 

revenue. Cal. Educ. Code §§ 2575, 42238.02(j). The 

legislature’s use of the same state contribution equation 

indicates that the LCFF funding target, like a revenue limit, 

represents a maximum expenditure, not a minimum.

Sato contends that the legislature’s use of the term “base

grant” evinces its intent to allow districts and COEs to raise 

local property tax revenues above and beyond the state’s 

minimum “base” support. He also alleges that OCDE 

receives a significant portion of its funding from local 

property tax revenues, which he claims are raised on top of 

LCFF base grant funding. But Sato’s focus on semantics 

ignores the strictures of the California Constitution 

expressed in Serrano I and Serrano II. And there is nothing 

unusual about the fact that OCDE receives some of its 

funding from local tax dollars. As under the revenue limits 

 7 Legis. Analyst’s Office, Local Control Funding Formula 

Implementation 1 (Cal. 2015), available at http://www.lao.ca.gov/hand

outs/education/2015/Local-Control-Funding-Formula-Implementation031915.pdf.
14 SATO V. ORANGE CTY. DEP’T OF EDUC.

system, school districts and COEs are funded through a 

combination of local tax revenues and the state’s funding 

contribution. See Cal. Educ. Code. § 42238.02; Belanger, 

963 F.2d at 252.

Examining the purposes of AB 97, we find no intent on 

the part of the California legislature to replace a maximum 

per-pupil funding formula with a minimum per-pupil 

formula. Rather, the legislation’s objectives were twofold: 

(1) increase education funding,8 particularly for low-income 

and ELL students, and (2) simplify what many considered 

an “overly complex, inefficient, and outdated” education 

finance system.9 To achieve these ends, the LCFF 

streamlined the numerous, piecemeal sources of state 

funding under the old revenue limits system. Base grants, 

supplemental grants, and concentration grants replaced 

revenue limits funding and almost all of the dozens of 

categorical funding grants under the old funding mechanism. 

Taylor, supra note 8, at 6, 7 fig.5 (listing 32 categorical 

funding programs eliminated under the LCFF). Categorical 

grants were restricted funds used for dozens of school 

services, such as special education, educational technology, 

and principal training. Now, instead of receiving many types 

of restricted funds, districts and COEs receive larger lump 

sums, with more flexibility over how state dollars are spent. 

See Campaign for Quality Educ. v. State, 209 Cal. Rptr. 3d 

 8 The LCFF increases per-pupil funding amounts compared 

to revenue limits per-pupil spending and provides for a complex 

transition formula to bring per-pupil spending up to target levels 

over several years. Cal. Educ. Code § 42238.03; see also Mac Taylor, 

Legis. Analyst’s Office, Updated: An Overview of the Local 

Control Funding Formula 2–3 (Cal. 2013), available at

http://www.lao.ca.gov/reports/2013/edu/lcff/lcff-072913.pdf.

9 Taylor, supra note 8, at 20.
SATO V. ORANGE CTY. DEP’T OF EDUC. 15

888, 923 (Cal. Ct. App. 2016) (Liu, J., dissenting from denial 

of petition for review) (describing the LCFF as “designed to 

improve the ability of school districts to flexibly use state 

education dollars to address the most pressing areas of 

need”).

While the passage of AB 97 provided districts and COEs 

with additional flexibility in their budgets, we note, 

however, that AB 97 did not eliminate the “centralized” 

system of “strict state control” over local districts’ funding 

we discussed in Belanger. See 963 F.2d at 252. In Belanger, 

we noted that the enactment of Proposition 13 by statewide 

ballot initiative in 1978 “ensured that the state, rather than 

local school districts, would control funding for public 

schools.” Id. at 251. Proposition 13 capped local property 

tax rates at 1% of assessed value, and transferred the 

authority to collect and redistribute local property tax 

revenues to the state. Cal. Const. art. XIIIA, § 1(a). As the 

California Supreme Court explained:

[B]y capping local property tax revenue, 

[Proposition 13] greatly enhanced the 

responsibility the state would bear in funding 

government services, especially education. 

[And] by failing to specify a method of 

allocation, Proposition 13 largely transferred 

control over local government finances . . . to 

the state, converting the property tax from a 

nominally local tax to a de facto stateadministered tax subject to a complex system 

of intergovernmental grants.

Cal. Redev. Ass’n v. Matosantos, 267 P.3d 580, 589 (Cal. 

2011) (citations omitted). AB 97 did nothing to override 
16 SATO V. ORANGE CTY. DEP’T OF EDUC.

Proposition 13, and Sato does not dispute that Proposition 13 

remains in effect.

In sum, we find that AB 97 left in place the fundamental 

elements of Belanger: equalization of per-pupil spending 

and centralized control over local education budgets. 

Because the LCFF keeps in place a maximum per-pupil 

funding formula, state and local funds are still “hopelessly 

intertwined,” and “any change in the allocation of property 

tax revenue has a direct effect on the allocation of state 

funds.” Belanger, 963 F.2d at 252. The first Mitchell factor 

therefore weighs in favor of Eleventh Amendment 

immunity.

2

The second Mitchell factor asks us to consider “whether 

the [government] entity performs central government 

functions.” Mitchell, 861 F.2d at 201. In Belanger, we 

found that “California law treats public schooling as a 

statewide or central governmental function.” 963 F.2d at 

253. The California Supreme Court has said that “[s]ince its 

admission to the Union, California has assumed specific 

responsibility for a statewide public education system open 

on equal terms to all.” Butt v. State, 842 P.2d 1240, 1247 

(Cal. 1992). Examples of the state’s assumption of public 

education as a state responsibility appear throughout the 

California Constitution. See, e.g., Cal. Const. art. IX, § 5 

(“The Legislature shall provide for a system of common 

schools.”); Cal. Const. art. XVI, § 8(a) (“From all state 

revenues there shall first be set apart the moneys to be 

applied by the State for support of the public school system 

and public institutions of higher education.”).

Sato argues that AB 97’s requirement that school 

districts and COEs adopt Local Control and Accountability 
SATO V. ORANGE CTY. DEP’T OF EDUC. 17

Plans (LCAPs) “unequivocally establish[es] that California 

public schooling is now controlled and provided locally.” 

We disagree.

LCAPs are three-year plans that must describe districts’ 

goals for student achievement and identify actions districts 

will take to meet those goals. Cal. Educ. Code § 52060; 

Taylor, supra note 8, at 8. LCAPs must address eight areas 

of state priority, and they may also include “additional local 

priorities identified by the governing board of the school 

district” or county board of education. Cal. Educ. Code 

§§ 52060(c)–(d), 52066(c)–(d). Within these areas, districts 

and COEs must set goals for all students and for specific 

subgroups of students, including ethnic minorities, lowincome students, ELL students, and students with 

disabilities. Id. §§ 52052(a), 52060(c), 52066(c). LCAPs 

must be developed using a state-provided template. Id.

§§ 52060(a), 52066(a). Within five days of adopting or 

updating its LCAP, a district must submit its LCAP to its 

COE for review, id. § 52070(a), and the COE is then 

responsible for filing the LCAP with the state, id. § 52070.5.

Sato argues that, in empowering districts to identify local 

priorities and develop strategies for achieving their goals 

through the LCAP process, AB 97 effectively transferred 

primary authority over public education from the state to the 

local level. We are unconvinced that LCAPs represent such 

a sea change. Under the state constitution, the provision of 

public education in California remains a central government 

function. And even through the LCAP process, the state still 

exercises significant control over school districts and COEs. 

Under the LCAP provisions of AB 97, districts and COEs 

“shall” address eight areas of priority identified by the state, 

and “may” also address local priorities. Cal. Educ. Code 

§§ 52060(c), (h), 52066(c), (h). The far-reaching areas of 
18 SATO V. ORANGE CTY. DEP’T OF EDUC.

state priority include such fundamental issues as 

“[i]mplementation of the academic content and performance 

standards adopted by the state board,” “[p]arental 

involvement,” and “[p]upil achievement.” Id. § 52060(d). 

For each area of state priority, districts and COEs must set 

goals for state-identified subgroups of students, and they 

must use state-provided templates and submit the final 

LCAP to the California Department of Education.

On the whole, AB 97 granted districts and COEs some 

measure of autonomy and discretion in goal-setting, but it 

did not delegate primary responsibility for providing public 

education. We therefore find that the passage of AB 97 did 

not disturb our longstanding precedent that “California law 

treats public schooling as a statewide or central

governmental function.” See Belanger, 963 F.2d at 253. As 

in Belanger, “[t]hat the state itself has decided to give its 

local agents more autonomy does not change the fact that the 

school districts remain state agents under state control.” Id. 

The second Mitchell factor weighs in favor of Eleventh 

Amendment immunity for OCDE.

3

The passage of AB 97 does not impact our analysis of 

the remaining three Mitchell factors. As in Belanger, the 

third Mitchell factor—whether the government entity may 

sue or be sued—weighs in Sato’s favor. See Belanger,

963 F.2d at 254. Under California law, COEs and school 

districts can sue and be sued in their own name. Cal. Educ. 

Code § 35162 (“In the name by which the district is 

designated the governing board may sue and be sued, and 

hold and convey property for the use and benefit of the 

school district.”). Accordingly, this factor “militates against 

a finding of Eleventh Amendment immunity.” Belanger,

963 F.2d at 254. But as we recognized in Belanger, “it does 
SATO V. ORANGE CTY. DEP’T OF EDUC. 19

not necessarily follow that the school district can be sued for 

money damages just because it can be sued in its own name.” 

Id. We therefore adopt Belanger’s approach in finding that 

this factor weighs in Sato’s favor, but we afford it less weight 

than the first two factors. See id.

4

The fourth Mitchell factor also weighs in Sato’s favor. 

The fourth factor considers “whether the entity has the 

power to take property in its own name or only the name of 

the state.” Mitchell, 861 F.2d at 201. In California, the same 

statute that allows COEs and school districts to sue and be 

sued in their own name also conveys to COEs and school 

districts the power to hold property in their own name. Cal. 

Educ. Code § 35162. Critically, however, the California 

Supreme Court has determined that local public school 

entities hold property for the benefit of the state. Hall v. City 

of Taft, 302 P.2d 574, 577 (Cal. 1956) (“The beneficial 

ownership of property of the public schools is in the state.”). 

We thus concluded in Belanger that this factor was a “close 

question” entitled to “little weight.” 963 F.2d at 254. We 

reiterate that conclusion here.

5

The fifth Mitchell factor asks us to consider the corporate 

status of OCDE. In California, “school districts have the 

corporate status of agents of the state for purposes of school 

administration.” Eason, 303 F.3d at 1144 (quoting 

Belanger, 963 F.2d at 254). The California Supreme Court 

has stated that “[l]ocal districts are the State’s agents for 

local operation of the common school system.” Butt, 

842 P.2d at 1248.
20 SATO V. ORANGE CTY. DEP’T OF EDUC.

Sato contends that COEs must be a distinct corporate 

entity from the state, because OCDE sued the state of 

California in Orange County Department of Education v. 

California Department of Education, 668 F.3d 1052 (9th 

Cir. 2011). As we have already determined, however, 

California law previously authorized school districts and 

COEs to sue in their own name before the passage of AB 97. 

Cal. Educ. Code § 35162. This limited authority does not 

change the status of districts and COEs as agents of the state. 

This factor weighs in favor of Eleventh Amendment 

immunity.

III

Considering all of the Mitchell factors together, we hold 

that California school districts and COEs, including 

defendant OCDE, remain arms of the state and continue to 

enjoy Eleventh Amendment immunity. AB 97 reformed the 

financing and governance of California public schools in 

important ways, but it did not so fundamentally alter the 

relationship between COEs and the state as to abrogate our 

decision in Belanger. Sato’s claims against OCDE were 

properly dismissed.

AFFIRMED. Each party shall bear its own costs.