The state has agreed to settle for $10,500 a sexual harassment suit filed by a Virginia Commonwealth University student who was spanked by a biology professor.

The case was set for a jury trial today in U.S. District Court. However, the case was marked settled on the court docket and the trial -- actually a retrial -- was canceled.

Attorney General James S. Gilmore III confirmed late yesterday that the spanking case has been ``settled in principle, although some details need to be worked out.''

``Students should be assured that they can pursue their educations without fear of sexual harassment. Professors at our universities need to know that if they engage in such conduct, they ultimately will be held responsible,'' Gilmore said.

Along that line, Gilmore said he intends to take action requiring the professor to reimburse Virginia taxpayers for the amount of the settlement.

Attorneys' fees in the case have not been resolved.

Eileen N. Wagner, the Richmond lawyer who represented the student, could not be reached for comment about the settlement.

The student, Amna Kadiki, 26, was seeking $850,000 in damages on her claim of ``quid pro quo sexual harassment.''

Associate professor Michael L. Fine has admitted spanking Kadiki, but contended the incident was a motivational technique to make Kadiki improve academically.

The spanking took place in August 1992 in Fine's office at the university.

Fine was convicted in 1992 of misdemeanor assault in a criminal case stemming from the same incident. He was sentenced to 12 months in jail, with 11 months and 29 days suspended. He spent one day in the City Jail.

He also has been disciplined by the university.

In late July, a federal jury of three men and three women deliberated for about a day and half before it announced it was deadlocked and could not reach a verdict. Senior Judge Robert R. Merhige Jr. then set the new trial date.

Kadiki's lawyers named only VCU as a defendant in the case and not Fine.

In pretrial proceedings, Merhige ruled in June that VCU is ``absolutely liable'' for incidents in which a professor wields academic power in pursuit of sexual encounters.

A U.S. District Court jury deadlocked yesterday over a sexual harassment lawsuit filed against Virginia Commonwealth University by a student who was spanked by a biology professor in August 1992.

The jury of three men and three women began deliberations yesterday about noon. About 5:40 p.m., the jury announced it was deadlocked and could not reach a verdict.

Amna Kadiki, 26, was seeking $850,000 in damages on her claim of ``quid pro quo sexual harassment.''

Her case against VCU will be tried again and Senior Judge Robert Merhige Jr. is expected to set a new trial date soon. Kadiki's lawyers named only VCU as a defendant and not associate professor Michael L. Fine.

In pretrial proceedings, Merhige ruled that VCU is ``absolutely liable'' for incidents in which a professor wields academic power in pursuit of sexual encounters.

VCU, however, argued that the spanking incident was not a sexual situation between Fine and Kadiki.

Fine has admitted the spanking, but contended the incident was a motivational technique to make Kadiki improve academically.

``It was a dumb thing to do, a bizarre thing, but he did it,'' said one of VCU's lawyers, David L. Ross.

VCU does not condone the act, he said, but the university does not believe it was anything sexual.

Kadiki testified that Fine asked her many personal questions each time she met with him. His comments about spanking, she testified, ``seemed like a weird biology joke.''

She realized it was no joke, though, when Fine pulled her over his knees and hit her on the buttocks.

A psychologist testified that Kadiki suffered emotional distress, anxiety, distrust and confusion.

A federal court ruling in a sexual harassment suit pending against Virginia Commonwealth University is likely to affect a similar harassment suit aimed at the College of William and Mary.

Students at both schools have used a federal anti-discrimination law to say the institutions should be forced to pay damages for the allegedly illegal behavior of their professors.

In the W&M case, graduate student Karen Veselits is seeking $2 million. At VCU, former undergraduate Amna Kadiki wants $850,000.

Lawyers from the state attorney general's office representing both of the state-supported schools have argued in each case that colleges and universities can't be held responsible for actions of individual professors.

On Friday, however, U.S. District Judge Robert R. Merhige Jr. settled that argument, in the VCU case at least, by ruling the school is ``absolutely liable'' for incidents in which a professor wields academic power in pursuit of sexual encounters.

The interplay of professorial authority and harassment, known in legal parlance as ``quid pro quo sexual harassment'' plays a role in the allegations in both of the lawsuits.

Veselits contends that a professor lowered her grade as punishment after she turned down his repeated sexual advances. Kadiki says in her suit that a professor, after spanking her for getting a low exam grade, offered her the chance to take the exam over if she would bring a hair brush and possibly submit to a second spanking.

Whether sexual harassment actually took place is still at issue in both cases.

Merhige's ruling on VCU's responsibility for quid pro quo harassment, if harassment occurred, came in response to a motions hearing held as a preliminary to the trial scheduled for July 26.

Eileen Wagner, the Richmond lawyer representing both Kadiki and Veselits, hailed the judge's position on the school's responsibility for the action of its professor as a milestone in the case law surrounding both of the Virginia sexual harassment suits.

Both suits were brought under the federal law known as Title 9 of the Education Amendments of 1972. The law prohibits sex discrimination in federally financed schools and has only recently begun to be cited in harassment cases.

``This is it!'' Wagner said. ``No other court in the United States has ruled that a school has absolute liability in a sexual harassment case . . . It's real clear now.''

Guy Horsley, a senior assistant attorney general working on the W&M case, said it would be impossible to predict the effect Merhige's ruling will have on either case.

But he agreed with Wagner that the issue is forcing judges to decide for the first time whether federal law covering discrimination in schools makes the schools responsible for the actions of professors in the same way federal laws covering workplace discrimination make employers responsible for the actions of managers and other employees.

``This is an issue about which the courts haven't spoken much about nationwide,'' Horsley said. ``It does invite a judicial interpretation of Title 9.''

No trial date has been set for the W&M case, which is pending in U.S. District Court in Newport News.

An associate professor at Virginia Commonwealth University admitted yesterday that he spanked a student in his biology class.

"This whole thing sounds strange," Dr. Michael Lawrence Fine told Richmond General District Judge D. Eugene Cheek. "I can't believe that it happened, but it did. . . . "It was not appropriate, and it was a very stupid thing to do."

But Dr. Fine's attorney, Carol A.N. Breit, told Cheek, "You might not like what he did. . . . That doesn't mean it was a violation of the criminal law."

Cheek gave Ms. Breit an opportunity to submit a brief supporting her contention that Dr. Fine was not guilty of misdemeanor assault, but Cheek made it clear that she had a difficult task.

"Anybody's knee-jerk reaction is that this is an outrageous circumstance," Cheek said.

"It appalls me. I've never heard of a college professor spanking anyone," the judge said. He set final arguments in the case for Nov. 24.

The student, Amna Kadiki, is a native of Libya who had to take an incomplete in the class to attend her father's funeral in Egypt in April. The testimony of Ms. Kadiki and Dr. Fine was generally consistent. They said she asked him to allow her to make up the last test of the semester and the final exam. She needed an 82 on the test to bring her average up to a C, and she said Dr. Fine was "very kind" in helping her to prepare for it. Ms. Kadiki, 23, needed at least a C in the course because she was on academic probation.

Dr. Fine told her that he would spank her if she didn't make that grade,

but she made only a 68 when she took the test on Aug. 13.

Ms. Kadiki said she was dazed when Dr. Fine reminded her of the agreement and approached him and turned her back to him as he took her hand, turned her over his knee and hit her six or seven times.

She said she was very upset and finally went to see Dr. Charles R. Irwin, a physician, several hours later.

Dr. Irwin said she had a reddened area on her buttocks and was "nervous, tearful, upset" when he examined her.

Dr. Fine testified that Ms. Kadiki bent over as if to be spanked standing up before he pulled her on his knee and spanked her.

"I can't imagine anything more consensual," Ms. Breit said in urging Cheek to dismiss the assault charge.

Cheek responded that the situation seemed "less like an agreement and more like what a teacher demanded."

If a student had turned her back and bent over as Dr. Fine testified, "I would think a college professor would say, `Turn that butt around.' "

Dr. Fine, 46, already has agreed to be placed on probation for a year and to perform 20 hours of community service to resolve a complaint Ms. Kadiki filed with the VCU administration.

He faces 12 months and jail and a $2,500 fine if he is convicted of the assault charge.

An associate professor at Virginia Commonwealth University is facing criminal and administrative charges for allegedly spanking a student in his biology class.

Dr. Michael Lawrence Fine, 46, of the 9400 block of Broad Meadows Road in Glen Allen, is scheduled to be tried Monday in Richmond General District Court on a misdemeanor assault charge. An administrative complaint stemming from the same Aug. 13 incident is being reviewed by Dr. David Hiley, dean of humanities and sciences. In the criminal complaint, the student, Anna Kadiki, wrote, "The professor made several statements that he would be spanking me if I (did) not make a certain grade.

"And after I did not make that grade, he pulled me over his knees and spanked me 6-7 times. My rear end was red by the time he was done," Miss Kadiki wrote.

The records say the alleged assault occurred about 11:30 a.m. A magistrate issued the assault warrant about 12 hours later based on Miss Kadiki's sworn statement.

Miss Kadiki apparently went to a physician between the time of the alleged assault and the issuance of the warrant. The physician and his records have been subpoenaed for Monday's trial.

Dr. Fine's attorney, Carol A.N. Breit, said the professor "is well- respected and he's a fine man. It's a shame to have something like this tried in the newspaper." She would not discuss Miss Kadiki's allegations.

Dr. Charles P. Ruch, VCU's provost and vice president for academic affairs, said he understood that the alleged assault occurred after Miss Kadiki had been allowed to make up a test that she had missed because she had to attend to a family matter. He said Miss Kadiki is still in school and is in her second year at VCU.

Dr. Fine is a tenured associate professor of biology, Dr. Ruch said.

Once Dr. Hiley completes his investigation, he can recommend either dismissal of the administrative complaint or punishment for Dr. Fine. The punishment can include suspension, probation or community service. Dr. Hiley can recommend dismissal of Dr. Fine but does not have the authority to fire him, Dr. Ruch said.

If Dr. Fine or Miss Kadiki is dissatisfied with Dr. Hiley's proposed resolution of the complaint, he or she can appeal it to a board of VCU faculty and administrators, which would hold a hearing and make a recommendation. A final appeal could be made to VCU President Eugene P. Trani.

Dr. Ruch said the administrative inquiry is "completely independent" of the criminal proceeding.