The suit was brought on behalf of 6,000 African Americans who had "qualified" scores on the test, but lost out to those rated "well-qualified."

Last week, lawyers representing the black applicants estimated the city could owe $100 million for lost wages and benefits. A lawyer for the city put the figure at closer to $30 million.

The Obama administration intervened in the case on behalf of the black applicants. The goal of the Civil Rights Act is "to eradicate discrimination" in the workplace, said Neal Katyal, the deputy U.S. solicitor general. In this case, "the city knew very well the test [was] discriminatory," he said.

When the test results were announced in 1996, Mayor Richard M. Daley said they were "disappointing" because only 11% of the top scorers were black.