By Lawrence Hurley

WASHINGTON (Reuters) - Conservative justices expressed deep doubt on Wednesday about a university student admissions policy that gives preferences to racial minorities during a testy U.S. Supreme Court session in a case that could decide the fate of programs aimed at fostering racially diverse campuses.

But conservative Anthony Kennedy, who often casts the deciding vote in close cases, raised the possibility of sending the closely watched case back to a trial judge to let the University of Texas submit more evidence to defend its consideration of race among other factors in picking applicants.

This suggested Kennedy might be unwilling to throw out the school's affirmative action policy entirely.

It was the second time the justices considered whether the affirmative action policy at the University of Texas at Austin violated the U.S. Constitution's guarantee of equal treatment under the law, and the oral argument lasted about 90 minutes, 30 longer than usual. The justices in 2013 sent the case back to a lower court.

Some of the court's conservatives voiced skepticism about the success of affirmative action, its long-term value and even whether it is harmful to some minority students. If those conservatives prevail, the Texas program, challenged by a white applicant named Abigail Fisher who was denied admission in 2008, and others like it could be in jeopardy.

The court appeared split ideologically, with liberals voicing support for affirmative action programs.

A ruling is due by the end of June.

Affirmative action refers to policies under which minorities historically subject to discrimination are given certain preferences in order to enhance the racial diversity of a university's student population.

Fisher's lawyers argued the university's policy favoring some black and Hispanic applicants was unconstitutional because it impermissibly considered race as a factor.

Conservative Justice Antonin Scalia suggested some blacks and Hispanics are actually hurt by the Texas program because they are not strong enough candidates to be admitted purely on academic criteria. Scalia suggested they might be better off attending "slower-track" schools where they can prosper.

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"I don't think ... it stands to reason that it's a goodthing for the University of Texas to admit as many blacks as possible," Scalia said.

Chief Justice John Roberts, another conservative, expressed doubt about whether the benefits of diversity can ever be properly measured. "What unique perspective does a minority student bring to physics class?" Roberts asked.

The case is closely followed, with an array of business and education interests backing affirmative action. People lined up before dawn for seating in the packed courtroom. Now 25 and working in Austin, Fisher was in attendance.

Outside the white marble courthouse, demonstrators on both sides of the issue staged protests. In attendance was civil rights activist Al Sharpton, who criticized Scalia's remarks.





'NOT THE TIME'

Greg Garre, the lawyer for the university, faced tough questions not just on the specific program but on the future of affirmative action altogether. Garre said the university would end its program as soon as it is able to achieve its diversity goals without it.

"Now is not the time," Garre said.

Some of the conservatives, including Kennedy and Roberts, appeared frustrated at what they considered the lack of evidence supporting the university’s need for the program.

Although more evidence could be introduced if the case returns to a lower court, Kennedy later suggested the justices themselves could re-examine data provided by the university.

Kennedy suggested by his questions that Fisher’s attorney, Burt Rein, might be pushing the court too far in curbing affirmative action. At one point, he wondered whether any program could be ruled constitutional under the challenger's standard.

At the University of Texas at Austin, the state's flagship public university, most freshman are admitted under a program guaranteeing places to the top 10 percent of high school graduating classes in the state. That program admits some minority students but not in sufficient numbers, according to the university, for the desired campus diversity.

A supplemental program, which is targeted in the lawsuit, looks beyond grades to a range of characteristics including race.

Among the liberal justices, the most vocal supporter of the Texas program was Sonia Sotomayor, the court's only Hispanic, who clashed repeatedly with Rein and some fellow justices.

She listed some of the reasons university officials gave for why increased diversity is needed, including concerns about race-related incidents on campus and minority students complaining about feeling isolated.

"What more do they need?" she said.

Fellow liberals Stephen Breyer and Ruth Bader Ginsburg also appeared to back the university.

Wednesday’s arguments were heard by eight of the nine justices. Liberal Elena Kagan, who was U.S. solicitor general in the Obama administration when it backed the university in lower-court litigation, did not participate.

Fisher graduated in 2012 from her second choice school, Louisiana State University.

"I don't believe students should be treated differently because of their race," Fisher said on Wednesday.





(Reporting by Lawrence Hurley; Additional reporting by Joan Biskupic; Editing by Will Dunham)