04/22/2009 -- As the Supreme Court heard oral arguments over New Haven's decision to scrap a promotion exam because too few minorities passed, the justices appeared divided. The question is whether the civil rights of top-scoring white applicants were violated and could have broad implications for how all employers handle the issue of race. The city tossed out findings from the test fearing it would open itself up to lawsuits from black firefighters, since none who took the test landed among the highest scorers. Instead, the city was sued by the group now known as the "New Haven 20" -- the 19 white firefighters and one Hispanic firefighter who were not promoted. READ THE TRANSCRIPT OF ORAL ARGUMENTS (.pdf) The key may lie with Associate Justice Anthony Kennedy. "It looked at the results and classified successful and unsuccessful applicants by race," said Kennedy, who often frowns on racial classifications. But where Kennedy saw shades of gray, the rest of the court seemed to view the case clearly in terms of black and white. The court's conservative bloc seemed inclined to side with the white firefighters. "You had some applicants who were winners and their promotion was set aside," Associate Justice Antonin Scalia said. The liberals indicated that New Haven did nothing wrong by throwing out the test over concerns that it had a "disparate impact" on minorities in violation of the 1964 Civil Rights Act. A ruling against the city, Associate Justice David Souter said, could leave employers in a "damned-if-you-do, damned-if-you-don't situation." Souter's comment reflected the concern of business interests who said in a court filing that a decision in favor of the white firefighters would place employers in an untenable position of having to choose whether to face lawsuits from disgruntled white or minority workers. The federal appeals court in New York upheld a lower court ruling dismissing the lawsuit. The case has drawn input from interest groups across the ideological spectrum. The Obama administration has weighed in mainly on the city's side, although it recommends allowing the lawsuit to proceed on a limited basis. A decision will not be delivered until later this year.