Attorneys for California’s Department of Education told justices Tuesday that the exam is a vital part of the state's effort to create higher standards for public schools.

State school’s chief Jack O’Connell says he’s optimistic. 

"I think presiding justice Ignacio J. Ruvolo summed it up well in court when he said ‘we are talking about education, we’re not talking about diplomas.’" 

A group of high school seniors is suing the state. Their attorney Arturo Gonzalez says the exam discriminates against the 40,000 students in the Class of 2006 who didn’t pass the exam because they did not have equal education and preparation for the test. 

"And many of them are going to be getting their diplomas if we can win this lawsuit."

The Appeals Court is expected to make a ruling within 90-days.