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Dec.13--The U.S. Supreme Court has left the door open to hear arguments in a case with potentially broad implications for government benefits award exclusively to Native Hawaiians.

State lawyers had urged the high court to deny a request to review a challenge of property tax exemptions granted to Native Hawaiian lessees of the Hawaiian Homes program, but justices instead announced Monday that they first want to hear the federal government's position in the case.

They issued an order inviting a brief from the U.S. solicitor general, who represents the Justice Department in cases before the Supreme Court. The justices will decide whether to hear the case after receiving the brief.

The case is significant because if the justices agree to review the challenge, it could eventually lead to a Supreme Court decision on the validity of government benefits for Native Hawaiians under the Constitution's 14th Amendment mandating equal protection under the law. The court has yet to rule on that issue.

Both sides in the case described themselves as "cautiously optimistic" after Monday's order.

The plaintiffs, five Hawaii residents who are not Native Hawaiian, contend that the property tax exemptions granted to the Hawaiian Homes lessees are racially discriminatory in violation of the 14th Amendment. They are asking the justices to overturn a Hawaii Supreme Court ruling this year that dismissed their lawsuit.

At least four of the nine U.S. Supreme Court justices must agree for the high court to hear the case. The high court grants only a fraction of requests for review.

State lawyers said they weren't disappointed by Monday's order.

"This is a normal process that is followed by the Supreme Court in a number of cases," said Joshua Wisch, spokesman for the state attorney general's office. "We remain cautiously optimistic that the court will deny certiorari. We believe the Hawaii Supreme Court got it right."

H. William Burgess, a Honolulu lawyer representing plaintiff John Corboy and the four other residents, said the announcement isn't "necessarily a bad thing from our point of view."

He said it's difficult to predict which way the court is leaning based on the announcement. "We basically remain cautiously optimistic," he said.

The court's order did not specify any deadline for the brief by Solicitor General Donald Verrilli Jr.

Burgess said it might be sometime in May, after which the high court would decide whether to review the challenge.

Mark Bennett, the former state attorney general who defended the constitutionality of the exemptions, said it's not unusual for the justices to ask for the opinion of the solicitor general when the case involves federal laws.

Congress passed the Hawaiian Homes Act in 1921, setting aside 200,000 acres for leases to Native Hawaiians at $1 a year. The Admissions Act passed by Congress that made Hawaii a state required that the 1921 legislation be part of the Hawaii Constitution.

The Hawaiian Homes Act exempts lessees from property taxes the first seven years. The city and neighbor island counties extended the exemptions by requiring minimal payments of $25 to $150 a year.

The average Oahu residential tax assessment for 2009-2010 was more than $1,800, the five's lawyers said.

The five are seeking a refund of their property taxes above what the lessees paid.

Bennett said he believes the solicitor general will agree with the state and urge the court to deny the review.

Burgess said in view of President Barack Obama's support for the Akaka Bill, he "wouldn't expect necessarily that the solicitor general would be supporting our position."

But, he added, the high court does not always agree with the solicitor general's opinion.

Alan Murakami, lawyer for the Native Hawaiian Legal Corp. which is not involved in the case, said he believes the justices are "thinking pretty hard " on the request for the review.

Murakami was reluctant to speculate about the effects of a ruling based on the 14th Amendment because it might be premature, and it would depend on the wording of the decision. But he said the ruling could "erode the entire basis for the homestead program."

The Office of Hawaiian Affairs, which was set up in 1978 to benefit people with Hawaiian blood, would also "definitely feel the weight of such a ruling," while Kamehameha Schools, a private institution, might not be affected as much, he said.

In the landmark Rice v. Cayetano ruling in 2000, the Supreme Court struck down the requirement that only voters with Hawaiian blood could cast ballots for OHA trustees.

The court, by a 7-2 vote, held the restriction was based on race rather than a political classification, but reached the decision on constitutional voting rights and not the 14th Amendment.

Native Hawaiian supporters fear that the challenge could open the door for a conservative-leaning Supreme Court to expand Rice's ruling and apply the 14th Amendment to government programs for Native Hawaiians.

Groups that filed a brief urging the court to take the case include the Pacific Legal Foundation, the Cato Institute, the Grassroot Institute of Hawaii and the Goldwater Institute.

In a 2007 case, rather than risk an unfavorable high court ruling, Kamehameha Schools settled a challenge under the federal civil rights law to its admissions policy favoring students with Hawaiian blood.

The schools said the settlement let stand a U.S. 9th Circuit Court of Appeals' ruling that upheld the policy.

A lawyer involved in the case said the schools settled by paying $7 million to an unnamed non-Native Hawaiian student and his mother.

Besides Corboy, the plaintiffs in the current case are Stephen Aghjayan, Garry P. Smith, Earl Arakaki and J. William Sanborn.