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A wealthy private school created exclusively for Hawaii's indigenous people may be forced to admit non-Hawaiians if it loses a legal challenge.

Fifteen judges on the 9th U.S. Circuit Court of Appeals will hear arguments Tuesday in San Francisco over whether the Kamehameha Schools can continue to limit enrollment to Native Hawaiians.

The case is an important test of racial preference programs in school admissions.

While the courts have generally ruled against favoritism in education based on race, the Kamehameha case is different in that the school was founded based on the will of a Hawaiian princess and doesn't receive federal funding.

"Her whole intent was to provide a means for educating her people so they could compete in a society that was changing so quickly," said Kekoa Paulsen, a spokesman for Kamehameha Schools. "We are providing a remedy for a ... people in their own homeland who are suffering."

A three-judge panel of the circuit court initially ruled against Kamehameha's admissions policy with a 2-1 vote in August. But the court announced in February it would reconsider the school's 118-year-old policy.

The lawsuit was filed on behalf of an anonymous white student who was denied admission to the school in 2003 and claimed he was discriminated against because he didn't have Hawaiian blood.

"We've had a lot of conflict, including the Civil War, about treating people differently based on their race. I think we're mostly past that, but unfortunately Kamehameha wants to go back to an era of privilege for citizens depending on what race you are," said Eric Grant, a Sacramento, Calif., attorney representing the boy, who recently graduated from a public school.

Kamehameha Schools was established under the 1883 will of Princess Bernice Pauahi Bishop as part of a trust now worth $6.8 billion. Part of the school's mission is to counteract historical disadvantages Hawaiians face in employment, education and society.

Kamehameha is the largest private landowner in Hawaii and is one of the richest trusts in the United States.

Admission to the elite school is first granted to all qualified Hawaiian students, and non-Hawaiians may be admitted if there are openings left available. Only one in eight eligible applicants get in, and tuition costs are 60 percent subsidized.

Out of 5,400 students enrolled at the school's three K-12 campuses, only two students do not have Hawaiian ancestry. One of those students initially claimed he was Hawaiian, but his acceptance into the school was rescinded when he couldn't prove his bloodline. He was later admitted to the school as the result of a legal settlement.

Attorneys for Kamehameha plan to argue that their admissions policy should be permitted to comply with the wishes of the princess' will and to help remedy some of the wrongs done during the U.S.-backed overthrow of the Hawaiian kingdom in 1893, Paulsen said.

"The lands that support Kamehameha Schools ... are designated for a certain set of beneficiaries, and the beneficiaries in this case are the children of Native Hawaiian ancestry," said Jon Van Dyke, a University of Hawaii law professor who consulted for the school. "The Native Hawaiian people have a great need for education. They are still at the bottom of the socio-economic ladder."

A lawyer for the boy countered that claim by saying the school's history isn't relevant to the issue of fundamental fairness.

"You have the school saying, 'Yeah, we discriminate by race, we admit that,"' said John Goemans, a Big Island attorney. "What the hell? That isn't America."

The case is an emotional one in this state, with Hawaiians claiming they are rightfully entitled to a quality education, and taking that away would further deteriorate their culture.

Following the appeals court's ruling against Kamehameha last fall, an estimated 15,000 people marched through downtown Honolulu in protest of the decision.

The court's rare move to give the case a rehearing, signals that a number of its justices want to take a closer look.

"We're not asking for a handout, we're asking to be able to take care of our own," said Miki Kim, a 1976 Kamehameha Schools graduate who organized a rally last fall supporting the school. "This country is not fair. That people use that as an argument, it's ridiculous. There's still a privileged class of people who don't understand what it's like to suffer."

The Hawaii attorney general's office has filed documents with the court supporting the school's admissions practices, which is generally accepted by the residents.

Both sides say they will appeal an unfavorable decision from the federal appeals court to the U.S. Supreme Court.

Kamehameha's Hawaiians-first admissions remain in place while the legalities are pending.