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The U.S. Justice Department has decided to withdraw its challenge to the Chicago Fire Department`s affirmative action plan. Better late than never. It appears to have taken two decisions by the Supreme Court to convince the Reagan administration`s civil rights enforcers that their justification for reopening this hard-fought case was too thin to carry the weight of the administration`s ideology.

Chicago`s fire department set promotion goals for blacks and Hispanics under a 1980 consent decree that settled a suit filed by the Justice Department under President Richard Nixon in the early 1970s. As in numerous other cases around the country, the courts agreed that the damages left by past discrimination in Chicago were serious enough to justify setting the goals.

But the Reagan administration maintains that only individuals hurt by past practices, not groups, are entitled to such remedies. It challenged Chicago`s plan and similar programs in 50 states, counties or cities. The administration based its action on a misreading of a 1984 Supreme Court ruling that seniority in the Memphis Fire Department should prevail over affirmative action criteria when layoffs became neccessary. The Reagan administration stretched that to pronounce all affirmative action programs dead.

But the two Supreme Court rulings this year reaffirmed that remedies can, in ”persistent or egregious” circumstances, benefit individuals who were not the victims of discrimination when considering hiring and promotions, if not always in layoffs.

With that hole blown in its argument, the Justice Department dropped its actions against Chicago four days after dropping a similar action against Indianapolis` police and fire departments. Too bad it took such a stern lecture from the Supreme Court for the Reagan people to understand what the law says about racial discrimination.