This document reviews the arguments and the ruling in the Lau v. Nichols case, and the general legal foundation for bilingual education. On March 25, 1970, a suit was filed by 13 non-English-speaking Chinese students in the District Court in San Francisco, on behalf of nearly 3,000 Chinese-speaking students, against the San Francisco Unified School District. The complaints were: (1) non-English-speaking students were being denied their rights to education because they couldn't function in the medium of instruction; and (2) these students were being doomed to becoming dropouts, and to unemployment, as a result of their language problems. Basic issues were whether the San Francisco school district should be required to provide special instruction in English, and whether instruction should be handled by bilingual Chinese-speaking teachers. While the school district and the federal court argued that the school district had no responsibility to rectify the situation, the Supreme Court ruled that the failure of the school system to provide English-language instruction to non-English-speaking students constitutes denial of opportunity to participate in the educational program. Furthermore, it was recognized both at the federal and state level that to be effective, the instruction must be bilingual. (CLK)