To the 5,800 students who live behind its ivy-covered walls, Princeton University is one of the nation's more exclusive seats of learning. To the American Civil Liberties Union it is "a company town" that should be open to anyone with a political statement to make.

The ACLU has used its "company-town" argument to convert a routine trespassing charge filed against a member of the U.S. Labor Party two years ago into an unusual free speech issue with national implications.

The case could decide whether hundreds of private schools across the United States -- and possibly industrial "campuses" as well -- can continue to choose whether they want to open or close their grounds to various political advocates.

A measure of the interest in the legal contest -- which has pitted former U.S. attorney general Nicholas deB. Katzenbach against constitutional scholar Sanford Levinson -- was the decision of the New Jersey Supreme Court to bypass the normal state judicial appeals procedure and hear the case itself within the next few months.

Technically, the case pits the state of New Jersey against Chris Schmid, a Labor Party member who was convicted of trespass and fined $15 for distributing leaflets on the Princeton campus in 1978. The university, however, has entered the case as an "intervenor" and will argue its position before the court.

Schmid was arrested for trespassing after he and another Labor Party member began passing out leaflets on Labor Party candidates involved in 1978 elections. The university charged that the Labor Party members ignored a requirement that they had to be invited onto the campus by someone connected with the school.

Levinson, a professor of law at the University of Texas, was a member of the Princeton faculty at the time of Schmid's arrest and fine. He joined the case, he said, at the request of the New Jersey chapter of the American Civil Liberties Union, which represents Schmid.

Katzenbach, who is general counsel for IBM and a member of the Princeton board of trustees, said he volunteered to represent the university after the state Supreme Court took the case last fall.

Levinson and the legal team representing Schmid have taken the position that Princeton, despite its private status, constitutes a "company town" and unlike private property is subject to the First Amendment. The argument, according to representatives from both sides, is without precedent.

The ACLU argument would mean that Princeton and numerous other private schools, particularly those with small enrollments where students live on the campus, would be thrown open in much the same manner as public institutions such as Berkeley or other state schools.

Levinson noted that if the court's ruling was broad enough it could also encompass so-called industrial campuses which do not have a live-in population but do have many of the amenities found on college campuses.

The university and the state of New Jersey contend that Princeton is a private institution and is entitled to enforce its own set of rules governing access to its campuses, which is private property.

The case, which has received almost no publicity, has nevertheless caused some discomfort among members of Princeton's faculty and staff who are aware of its existence.

"I think you are bound to feel uncomfortable appearing to argue against free speech, whether or not the facts back up that appearance," Katzenbach said in an interview this week.

"Princeton is clearly being put in a position of saying that the interests of the university override the commitment to the unfettered debate of dissident political ideas," Levinson said.

In their court brief, Schmid's attorneys argued that Princeton's 5,800 students are mostly housed on the university's campus and that the campus has all the attributes of a company town.

"Not only do undergraduates live and do their work primarily on university grounds," the brief said, "they also worship, eat, play, mail letters, cash checks, buy books, clothing and records, visit museums, attend films, plays and concerts, and receive counseling and medical care on campus."

Princeton also has a university store, a radio station, a newspaper and a security force on the campus, the ACLU attorneys said.

"By the standards of New York City, Princeton University is not a town," the ACLU brief said. "But there are literally thousands of municipalities across this land who have fewer of the indicia of autonomous identity than does Princeton University."

A key point in the ACLU agreement, according to Levinson, is the fact most Princeton students are eligible to vote. "There is a direct First Amendment interest," he said, "that people be able to get the voters with all the relevant information."

A spokesman for the university denied this week that the policy in effect at the time of Schmid's arrest was designed to exclude any particular groups from the campus. But he said the policy was changed last year "as a direct result of the Labor Party case."

Under the new Princeton policy, outside political and religious groups are allowed on the school's campus after getting permission from school officials, the spokesman said. He said the only requirement is that they follow behavior rules drawn up by the school.

In its brief to the court, Princeton noted that unlimited outside access to the school's campus would disrupt the educational environment, erode its "essential freedom" and cut back on the diversity that private schools add to the concept of education.

The brief also noted that the school has been given numerous gifts by alumni and others over the years that were designated to remain under exclusive control of the Princeton trustees.

"It would be a breach of faith with those who have donated property heretofore," the university said, "if the nature of the university's property interests were . . . now declared to be 'quasi-public.'"