This fourth chapter of "The Yearbook of School Law, 1986" summarizes and analyzes state and federal court decisions handed down in 1985 related to handicapped students, and to the conditions affecting them and, to a lesser extent, school personnel. Among the topics addressed are the procedural safeguards established to ensure appropriate identification, evaluation, and placement of handicapped children; the placement of children in the least restrictive environment and in private facilities; the availability of related services for those in special education; and discipline policies affecting the handicapped. Other topics examined are remedies granted by the courts for institutions failures to provide appropriate services; the application of Eleventh Amendment guarantees of governmental immunity in cases relating to the enforcement of laws affecting the handicapped; cases involving state laws; and cases involving discrimination against handicapped students or school personnel under Section 504 of the Rehabilitation Act. (PGD)