The three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco overturned a lower court's dismissal and affirmed the standing of a multiethnic group of taxpayers to challenge the Hawaiians-only programs.

It was the second time this month that the court has ruled against Hawaiian programs. On Aug. 2, a three-judge panel ruled 2-1 that the exclusive Kamehameha Schools' policy of giving preference to Native Hawaiians violates federal anti-discrimination laws.

The lawsuit in the latest opinion, filed in March 2002, argues that OHA's programs should not received state funding on the grounds that they are discriminatory.

The suit argued that revenue from ceded lands — government land under the Hawaiian monarchy that became public land under statehood in 1959 — should benefit Hawai'i's entire population, not just native Hawaiians.

U.S. District Judge Susan Oki Mollway had dismissed the case on Jan. 15, 2004, noting at the time that Congress was considering a bill sponsored by Sen. Daniel Akaka, D-Hawai'i, that would grant federal recognition to native Hawaiians similar to the recognition afforded to American Indians and Alaska Natives.

OHA attorney Sherry Broder argued that a number of congressional acts — such as the Native Hawaiian Education Act and the Native Hawaiian Health Care Act — have already established Hawaiians as a political entity.

The lawsuit stemmed from a landmark ruling by the U.S. Supreme Court on Feb. 23, 2000, that struck down the Hawaiians-only restriction for voting in OHA elections as unconstitutional racial discrimination.

The lawsuit originally named the Department of Hawaiian Home Lands and the federal government as defendants.

Mollway removed them from the lawsuit in November 2003, saying taxpayers lacked standing to challenge federal laws. The department was established by the 1959 Statehood Admissions Act.

The 9th Circuit upheld that ruling. The panel heard arguments in Hawai'i but issued its opinion in San Francisco.

The Akaka bill is scheduled for a cloture vote in the U.S. Senate next Tuesday; if it wins at least 60 votes, that would force debate and a vote on the bill.