In 1978 a complaint was filed by New Hampshire Legal Assistance against Laconia Developmental Services, New Hampshire's only public institution for children and adults with developmental disabilities. The decision from the Federal district court judge in August 1981 ordered the state to devise a plan for: institutional improvement; development of community service options within available resources; and special education responsive to children with severe disabilities. An implementation plan was developed by the state, calling for significant community placements and the building up of important community infrastructure. Factors that contributed to the positive outcomes of the litigation included poor institutional conditions, few community services, timing, the development of a model for nondiscrimination against people with severe disabilities in the Pennhurst case in Pennsylvania, the public nature of the trial, the influence of outside experts, the maintenance of the state's role in planning services rather than assignment of a court monitor, courage and tenacity of the parents, the wisdom of the judge, and minimal organized opposition. Highlights in the litigation process, effect on state administration and planning, and the decision to not apply for special education certification are also discussed. (Contains 19 references.) (JDD)