A federal appeals court has declared unconstitutional a popular Arlington County alternative school's efforts to consider race in admissions, but gave the School Board another chance to find a system that would make the school more ethnically diverse.

Friday's ruling by a three-judge panel of the 4th U.S. Circuit Court of Appeals said the weighted lottery used in admitting kindergartners to the Arlington Traditional School gave preference to black and Hispanic applicants and thus violated the Equal Protection Clause of the 14th Amendment to the Constitution.

The panel said it would not rule on whether the county's diversity goal was valid, since the U.S. Supreme Court has not resolved that question, but it rejected the lottery as "not sufficiently narrowly tailored" to create diversity without hurting third parties--the unsuccessful white applicants who had sued the School Board--or violating other court guidelines.

However, the three judges were critical of a 1998 ruling against the board by U.S. District Judge Albert V. Bryan Jr., who had ordered the county to impose a random lottery in admitting children to the school. "We find that the district court abused its discretion when it ordered the school board to adopt a specific admissions policy," the appeals panel said.

The judges said school officials could present Bryan with other admissions plans that might increase minority enrollment without violating the Constitution.

The ruling surprised and pleased two Arlington School Board members, who had been told the Richmond-based court was unsympathetic to using diversity as an admission criteria.

The Arlington case and a Montgomery County case still undecided by the appeals court have been watched closely by school officials throughout the country because the Supreme Court has yet to rule on whether elementary and secondary schools can impose admissions restrictions to achieve racial balance, and there have been few other court rulings on the issue.

The U.S. Justice Department, as well as several school and civil rights organizations, filed briefs supporting the Arlington School Board. Some universities considering removing racial considerations from their admissions policies had also been waiting for the appeals court ruling.

The decision was written by 4th Circuit Court Judge Sam J. Ervin III, 73, the son of the late U.S. senator Sam J. Ervin Jr. and a Jimmy Carter appointee. Judge Ervin died Sept. 18 after suffering a heart attack. The two other members of the panel, George Bush appointee J. Michael Luttig and Bill Clinton appointee Robert B. King, said in a footnote that they concurred in the opinion and so it had majority support when filed.

Arlington School Board chair Libby Garvey said yesterday that she was "very pleased" by the panel's conclusion that the board had not shown bad faith in trying to win Bryan's approval of a lottery that gave preference to low-income and immigrant students after he rejected an initial selection system based on race. She said that she hoped the board could produce a revised system for Bryan's approval before admissions decisions are made next spring but that she had not yet spoken to the board's attorneys and did not know how such a system might work.

Board member Mary H. Hynes said, "We are going to keep right on trying" to make the school more diverse.

Attorneys for the two white children who filed the suit in March 1998 could not be reached for comment.

The appeals court said one reason it rejected the lottery system was that there were several alternatives suggested by a county study committee that might have increased diversity without requiring racial preferences. These included assigning all students in some minority neighborhoods to the school, expanding the lottery to all incoming kindergartners in the county or giving each neighborhood school a certain number of slots in the alternative school.

The Arlington Traditional School was set up in 1978 at the urging of parents who wanted firm dress codes and an emphasis on phonics. The school's high standards have made it very popular. In the 1998 lottery that led to the appeals court ruling, there were 185 applicants for 46 slots. Most of the school's applicants have been white or Asian American, which led officials to weight the lottery in favor of blacks and Hispanics.

The School Board reacted to Bryan's rulings by holding a random lottery but increasing the school's enrollment. That upset some parents, who worried about the increased student load and the addition of trailer classrooms. By 2002, enrollment at the school will have grown from 300 to 450 over five years, school officials said. At the end of the last school year, the ethnic mix was 61 percent white, 18 percent Asian, 11 percent Hispanic and 10 percent black; in the county school population overall, whites are a minority.

Lawyers and school officials still await the appeals court's ruling in the Montgomery case, in which two parents have sued the Maryland school district for denying their son a transfer to Rosemary Hills Primary School. The parents were told that a white child could not be allowed to leave a school where only 24 percent of the students were white for a school that was 65 percent white.