To understand the significance of Will v. Michigan Department of State Police, some background is helpful. The Eleventh Amendment, as interpreted in Hans v. Louisiana, generally divests federal courts of jurisdiction of suits against a state, even if that suit is based on a federal statute.  Plaintiffs seeking prospective relief (e.g., injunctions to prevent future constitutional violations) can avoid this ban by suing the relevant state office holders in their official capacities.  But this is no help to someone who wants retroactive monetary relief such as damages. 

In Fitzpatrick v. Bitzer and subsequent cases, the Court recognized that Congress could abrogate a state's Eleventh Amendment protection by exercising its powers under the Fourteenth Amendment so long as it did so sufficiently explicitly.  But in Quern v. Jordan, the Court held that § 1983 was not sufficiently explicit, thus closing the federal courts' doors § 1983 seeking damages from states.

Plaintiffs hoped that one door remained open.  Since the Eleventh Amendment was a restriction solely on federal court jurisdiction, it might be possible to bring such suits in state courts—particularly if the state had waived any sovereign immunity it had under state law.  The argument seemed plausible: the Eleventh Amendment posed no barrier to state court jurisdiction.  Like local governmental bodies, states were entities; and the Court had held that local governments were suable "persons" within the meaning of § 1983.  Therefore, the argument went, states (or their officials sued in their official capacities) should also be considered "persons" who could be sued  so long as the suit was filed in state court and so long as the official policy requirements of Monell were met. 

In Will v. Michigan Department of State Police, the Court rejected this argument and closed the final door.  Although Congress had the power to authorize § 1983 damage suits against states (at least in state courts), the Court concluded that Congress had not exercised that power.  As a result, such suits are now barred in both federal and state courts.