A Race Case? Duck And Cover.

What began as a reverse discrimination lawsuit filed by 20 New Haven, Conn., firefighters five years ago could become a long-term political headache for the Obama administration. The case involves a complaint filed by 19 white firefighters and one Hispanic who were rejected for promotions despite passing a civil-service test. After the lead plaintiff, firefighter Frank Ricci, who had hoped to become a lieutenant, and his fellow plaintiffs got high scores, the city scrapped the test and promoted no one rather than give them the jobs over black candidates who had earned lower scores. When the Supreme Court agreed to hear the case in January, the Obama administration was faced with a dilemma: how to handle a case with the potential to stir up old controversies over "racial quotas"—an issue that Obama, as a candidate, made clear he wanted to get beyond? The case's sensitivity was only heightened by Attorney General Eric Holder's recent remark about the United States still being a "nation of cowards" on racial matters—a comment that was deemed needlessly divisive by some and refreshingly candid by others.

A Justice Department official, who asked not to be identified discussing a sensitive matter, confirmed that DOJ lawyers had consulted with White House counsel Gregory Craig's office about how to handle the case. Then in late February, Justice quietly filed a brief that another lawyer involved, who also asked for anonymity, called a "political straddle." The brief for the most part supported the city of New Haven's position: it had the right to toss out the test if there was a reasonable basis to believe the city might later be sued by black applicants for an insufficiently diverse fire force. However, Justice also argued that the case should be "remanded" to U.S. district court for further fact-finding, specifically to determine whether the city's explanation for tossing the test was a "pretext for intentional racial discrimination" against the white firefighters. Conservatives pounced on the filing, arguing that Justice's position—if adopted by the high court—would reopen the door to "politically correct discrimination" and "racial preferences."

The legal squabble could have an impact on the next Supreme Court nominee. One of three judges on the U.S. Court of Appeals panel that originally upheld New Haven's position was Sonia Sotomayor, a Hispanic who is often mentioned as being on Obama's shortlist for the next open Supreme Court seat. Conservatives ripped into Sotomayor's handling of the case, citing criticism from one of her colleagues, Clinton appointee José Cabranes, who argued that the opinion that she and her two colleagues issued was misleading because it made no mention of the "weighty" constitutional issues at stake. If Obama ultimately does name her to the court, said Ed Whelan, director of the Ethics and Public Policy Center, a conservative advocacy group, the New Haven case "should be a big strike against her."