* Ruling could affect promotion policies across U.S.
* Court splits 5-4 on conservative/liberal lines
* Lower-court ruling by Judge Sotomayor rejected
* Sotomayor's conservative critics seize on decision (Recasts lead, updates with White House, other reaction)
By James Vicini
WASHINGTON, June 29 (Reuters) - The U.S. Supreme Court overruled President Barack Obama's high court nominee Sonia Sotomayor on Monday in an important race discrimination case, but the White House remained confident she would be approved.
The court's 5-4 ruling held that the city of New Haven, Connecticut, violated federal civil rights law when it threw out the results of a promotion exam which had yielded too many qualified white applicants and no acceptable black candidates.
Civil rights groups and legal experts said the ruling in the closely watched racial discrimination case could affect promotion policies for employers nationwide, many of which operate under "affirmative action" programs designed decades ago to foster diversity and redress past bias.
"This decision will change the landscape of civil rights law," Fordham University law professor Sheila Foster said. Other legal experts said the ruling rolled back 25 years of precedent.
Dividing along conservative and liberal lines, the justices overturned an earlier ruling by a three-judge U.S. appeals court panel that included Sotomayor, who is Obama's choice to replace retiring Supreme Court Justice David Souter.
"I don't foresee that...this will represent anything that would prevent her from a seat on the Supreme Court," White House spokesman Robert Gibbs told reporters.
Conservative critics seized on the decision, authored by Justice Anthony Kennedy, to demonstrate that Sotomayor was "out of sync" with mainstream legal thinking.
Senate confirmation hearings begin on July 13 and if approved she will be the top court's first Hispanic justice.
The liberal judges on the Supreme Court issued an impassioned dissent to Monday's ruling.
"Congress endeavored to promote equal opportunity in fact and not simply in form. The damage today's decision does to that objective is untold," Justice Ruth Bader Ginsburg said, taking the rare step of reading her dissent from the bench.
The Supreme Court ruled in favor of a group of 19 white firefighters and one Hispanic firefighter who filed a lawsuit in 2004 against New Haven.
The firefighters said they would have been promoted if the city had not thrown out the tests for lieutenant and captain because no blacks had scored high enough to move up in rank.
It marked the first ruling by the court addressing racial discrimination in employment under Chief Justice John Roberts, who joined the court in 2005. In 2007, the court's conservative majority barred public schools from taking race into account to achieve or maintain integration.
Senator John Cornyn, one of seven Republicans on the 19-member Senate Judiciary Committee that will hear Sotomayor's nomination, said, "All nine justices were critical of the trial court opinion that Judge Sotomayor endorsed."
Senator Jeff Sessions, the committee's top Republican, said, "The Supreme Court found that Judge Sotomayor was wrong to allow the city to change its promotion exam after it was given, solely to favor a group because of race."
But Sotomayor appeared to be winning support among a broad cross section of Americans. A Washington Post poll published on Sunday showed 62 percent of those polled supported her elevation to the Supreme Court.
New York Senator Charles Schumer, whose Democratic Party has a majority in Congress, defended Sotomayor, saying she "followed the rule of law in this case."
New Haven argued that if it had gone ahead with the promotions based on the test results, it would have risked a lawsuit claiming the exam hurt minorities in violation of federal civil rights law. But Kennedy said fear of litigation alone cannot justify reliance on race to the detriment of people who passed the exam and qualified for promotions.
The dispute was one of two major civil rights cases that reached the Supreme Court after Obama became the nation's first black president. In the other one, the court last week declined to decide a constitutional challenge to the Voting Rights Act that seeks to ensure access to the polls by minorities. (Additional reporting by Andy Sullivan and Jeff Mason; Editing by Deborah Charles and David Storey)