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Funds and property seized by the state from convicted drug dealers must go to local school systems rather than law-enforcement agencies, the North Carolina Supreme Court has ruled.

The case, which involved the New Bern-Craven County school system, resolved a longstanding dispute in the state over how forfeited property should be distributed.

The state's Racketeer Influenced and Corrupt Organizations Act insures the state's right to retain the property, while the North Carolina constitution guarantees that the proceeds be "used exclusively for maintaining free public schools.''

In dispute was a $50 profit from the sale of a house owned by a convicted drug trafficker. The precedent-setting ruling could allow schools to claim additional fines and penalties in the future, said Laura Crumpler, a lawyer for the North Carolina School Boards Association, which filed a brief in the case.

"We are very happy about the ruling,'' Ms. Crumpler said. "The more financial assistance [the schools] can get, the more we can make the school system better, and that's ultimately a way to fight drugs, too.''

A New Jersey state appellate court has upheld a ruling that local school officials violated the First Amendment rights of a junior high student when they censored his reviews of two R-rated movies from a school newspaper.

A superior court held in 1991 that administrators at Clearview Regional Junior High School in Gloucester County violated the rights of Brien Desilets, who was 13 when he wrote the 1989 reviews of "Mississippi Burning'' and "Rain Man.'' In its ruling, the court relied on the New Jersey constitution, not the U.S. Constitution.

But the appellate court said such censorship violates both the First Amendment to the U.S. Constitution and does not comport with the 1988 U.S. Supreme Court decision in Hazelwood School District v. Kuhlmeier, which gave public schools broad authority to censor student newspapers and other forms of expression.

Mark Goodman, the executive director of the Student Press Law Center in Washington, said the case could have national impact since this is the first decision since Hazelwood in which school officials have not met the federal standard for censoring student publications.

Superintendent Michael Toscano of the Clearview Regional School District said the district will appeal the decision.

The state of Georgia and the city of Valdosta must pay a total of more than $37,000 in legal fees to the parents of a mentally disabled student who won a special-education dispute in the state legislature, rather than in the courtroom.

Teri Beth Grinsted and her parents had been embroiled in a lawsuit with local school officials over tuition and other fees for her special-education program at private day and residential schools. Before the court case was settled, however, the legislature passed a law requiring the city and the state to share costs for Ms. Grinsted and all of the other residents at the Parkwood Developmental Center.

Under federal special-education law, school officials are required to pay legal fees to parents of disabled students who prevail in legal or administrative disputes. However, state and local school officials argued against paying the Grinsteds' legal bill because they said the family had, in effect, "won'' their case in the legislature and because other Parkwood residents also benefited from the same change in state law.

But, in a July ruling, U.S. District Judge Wilbur D. Owens Jr. said the family was entitled to the fees because they had provided "ample evidence'' that their litigation was the catalyst for the legislation. The state, which must pay the bulk of the legal fees, has not said whether it will appeal the ruling.

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