In oral arguments before the Ninth Circuit Court of Appeals, the Doe vs. Kamehameha case also raised questions over whether the three-judge panel should consider that the trust supporting the school was funded by lands owned by the Hawaiian monarchy.

A year ago in November, U.S. District Judge Alan Kay ruled that the school's policy of giving preference to student applicants who have at least some Hawaiian blood did not violate a section of federal law that prohibits racial discrimination in contractual matters. The plaintiffs then appealed.

The Kamehameha Schools case is one of two pivotal lawsuits affecting Native Hawaiians being heard by the appeals court this month.

Eric Grant, representing the unnamed plaintiffs in the admissions case, cited previous rulings suggesting that the source of the school's funding is irrelevant.

"The court has said that regardless of the origin of the funds the regular rules apply," Grant said. He was referring to a case challenging an all-white academy in Pennsylvania.

However, presiding Judge Susan Graber said she saw a distinction between Kamehameha and the Pennsylvania school: "There wasn't a king of Pennsylvania that I know of," she said.

Kamehameha attorney Kathleen Sullivan said the federal law in question never meant to remove remedial institutions like Kamehameha.

Grant's rebuttal was that the use of the term remedial is being misused here. "Certain remedial programs are permitted, but those are programs that remediate discrimination within the institutions being challenged," Grant said.

The legal clash began last year with a pair of federal cases filed in the Hawai'i district.

A year ago, Kamehameha settled an almost identical lawsuit filed on behalf of Brayden Mohica-Cummings, a non-Hawaiian student. School attorneys said they settled primarily to ensure that if any case were to be appealed, it would be the favorable ruling Kay had issued on the Doe case weeks earlier.