Low Count of Minorities Not Justified, Court Says : Census: If ruling stands, big cities would benefit. Southland could gain more political clout and U.S. money.

In a ruling that could mean more federal money for large cities--perhaps more than $150 million for Los Angeles alone--and more political muscle for Southern California, a federal appeals court has found that the Bush Administration failed to justify undercounting millions of minority citizens in the 1990 census.

The opinion, handed down Monday by the 2nd U.S. Circuit Court of Appeals in New York, breathed new life into a politically charged, six-year battle by a group of cities, including Los Angeles, to adjust population counts to correct for the chronic difficulty that the Census Bureau has had in reaching and counting minorities.

Proponents said Tuesday that, if allowed to stand, the ruling could dramatically restructure the equation of political power both nationally and within the state. Census figures are used for drawing district lines for the U.S. House of Representatives, seats in state legislatures and even city councils, as well as distributing federal funds for everything from feeding the poor to running mass transit systems.

But it is unclear what will actually happen if President Clinton chooses not to take up the Bush Administration position in the reinstated case. Theoretically, the new federal allocations could start flowing within a matter of months, but lawyers familiar with the case said it is also likely that any congressional redistricting will be challenged for years to come.

Studies have shown that Southern California and Arizona would gain one new congressional seat apiece under the new numbers, at the expense of Pennsylvania and Wisconsin, and that Los Angeles would be entitled to $150 million more a year in state and federal funds.

“The census figures are a cornerstone of representative government,” said Deputy City Atty. Jessica Heinz, who helped argue the case for Los Angeles. “We are really excited by this decision . . . it throws open a lot of issues.”

Meanwhile, Robert S. Rifkind, a Manhattan lawyer who represented the city of New York, called the ruling “a milestone in the battle against racial discrimination in voting.”

“What the court found is that blacks, Hispanics and other minorities have had their votes diluted by this statistical problem back to 1940 at least--and there’s no reason why we should put up with it anymore.”

The U.S. Census Bureau has acknowledged that minorities have been undercounted for decades; members of minority and low-income families have traditionally been harder to reach because of misinformation and fears of government intrusion into their lives.

Consequently, in the 1980s, the bureau devised a formula to more accurately reflect the nation’s diversity, but the increased minority numbers carried a potent political charge--they are believed to be more favorable to Democrats than to Republicans.

Late in that decade, as the 1990 census was being planned, mayors in Los Angeles, New York, Chicago and other big cities with large minority populations--and heavily Democratic constituencies--sued the Republican Bush Administration to compel an adjustment for what they expected would be an undercount.

Accordingly, the bureau conducted the Post Enumeration Survey, canvassing 171,390 households nationwide. The sampling indicated that the nation’s population had been undercounted by about 2.1%, or 5.4 million people. But the undercount, as suspected, was particularly glaring among minorities. The Census Bureau estimated that Hispanics had been undercounted by 5.2%, Native Americans by 5%, blacks by 4.8% and Asian and Pacific Islanders by 3.1%. Less than 2% of the white population was estimated to have been overlooked.

Because Los Angeles and California have such large minority populations, state and local estimates also got short shrift. The city of Los Angeles, the bureau estimated, was undercounted by nearly 200,000 people, or about 5%, while California as a whole was undercounted by 3.8%.

Under the terms of the legal settlement that culminated the mayors’ suit, the Bush Administration’s Department of Commerce--which oversees the census--was required to consider using the adjusted figures. But in 1991, then-Commerce Secretary Robert A. Mosbacher declared the 1990 count “one of the two best censuses ever taken in this country,” and refused to adjust the figures.

Mosbacher said politics did not influence his decision; rather, he said, he simply did not want to “abandon a 200-year tradition of how we actually count people.”

The decision prompted a new legal challenge, this time not only from the cities but also from national minority organizations. But last year, a lower court threw out the case, ruling that although the adjustments would have made the census more accurate, Mosbacher was not technically required to use them.

The lower court said the only legal requirement was that the commerce secretary not be arbitrary and capricious in his decisions.

But on Monday, the appeals court overturned that ruling on a 2-1 vote, saying that because the constitutional right of minorities to equal representation was at stake, the commerce secretary had to be held to a higher legal standard.

“While precise equality is a goal that at the national level may be illusory, there must be a good-faith effort to approach that goal as nearly as is practicable,” the court ruled. If the official answer “is that it is preferable to undercount minorities,” the opinion added, the Department of Commerce will have to prove that that decision serves a legitimate governmental objective that cannot be met any other way.

Rifkind, Heinz and other lawyers who argued the case said Monday that it is unclear what the ramifications will be.

“There’s a new secretary of commerce, a new attorney general and a new President now,” Heinz said.

White House spokeswoman Dee Dee Myers said Monday that the Justice Department is reviewing the court’s decision, and will eventually decide among three options--to appeal the ruling to the U.S. Supreme Court, to let the matter be sent back to the lower court for reconsideration under the new appeals court standards, or to admit to the undercount and let California and Arizona gain their congressional seats--in which case, she added, Pennsylvania and Wisconsin would probably sue.

If the Justice Department takes the third option, lawyers said, federal funding could be reallocated almost immediately; however, they added, the implications of that decision would be so prone to litigation that the next census could pass without a resolution of this case.

As lawyers grappled with the dramatic possibilities posed by the ruling, lobbying had already begun. On Tuesday, almost before the White House had received a copy of the opinion, Sen. Herbert Kohl (D-Wis.) had written a letter to Atty. Gen. Janet Reno urging an appeal.

California’s elected officials predictably lauded the opinion. “All of California wins on this particular ruling,” said Assemblyman Richard Polanco (D-Los Angeles), chairman of the legislative Latino Caucus.

Gov. Pete Wilson was not immediately available for comment, but his office noted that he had been in favor of an adjustment for several years, and cited a 1991 letter that he wrote to Mosbacher calling the updated figures “crucial to California’s fair representation in Washington.”

Sean Walsh, Wilson’s press spokesman, said the governor’s office would contact the administration “to see what steps they plan to take from here.”

“Clearly at the time of the census we were concerned that California’s population was undercounted, and concerned about the effects that would have for the state both fiscally and politically,” Walsh said. “We’re anxious now to see what the outcome will be from the federal government.”

Times reporters Michael Ross, Mark Gladstone and Joel Havemann contributed to this report.