The Office of Hawaiian Affairs won a key victory yesterday when a federal appeals court said it will uphold a decision that the agency may fund programs supporting those who have less than 50 percent native Hawaiian blood.

A three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco ruled that OHA’s trustees may spend money for several programs that benefit all Hawaiians, regardless of their blood quantum.

The court decision says OHA did not breach its trust with spending on native Hawaiian recognition lobbying, a program for gifted and talented native Hawaiian children called Na Pua Noeau, the Native Hawaiian Legal Corp. and Alu Like, which supports efforts assisting Hawaiians’ social and economic self-sufficiency.

The lawsuit was filed by five native Hawaiians who said OHA should fund programs and services only for those with 50 percent or more of Hawaiian blood.

At issue in the lawsuit was about $28 million OHA receives annually from what are known as public trust lands revenues. The money is derived from the income and proceeds collected on the use of about 1.2 million acres now under the control of the state but which were once crown and government lands.

The attorney for the five men said language in both the Hawaiian Homes Commission Act and the state Admission Act say funds are supposed to benefit those with at least 50 percent Hawaiian blood.

OHA argued that by providing benefits to all Hawaiians without regard to blood quantum, the agency is providing a benefit to those with 50 percent or more.

In her initial ruling in June 2008, U.S. District Judge Susan Oki Mollway said the law gives OHA broad discretion on how to meet its mandates. The five who brought the case then appealed that decision, leading to yesterday’s decision.

The case was originally filed in 2005 by Virgil Day, Josiah Hoohuli, Mel Hoomanawanui, Patrick Kahawaiolaa and Samuel Kealoha. After Mollway rejected the case in 2006, a panel of the 9th Circuit appeals court ordered her in August 2007 to hear the case.