EDITORIAL : APPEALING DECISION; PANEL MAKES CORRECT CALL IN REVERSING SIMPSON CUSTODY RULING.

O.J. Simpson's losing streak continues. On Tuesday, the 4th Court of Appeal reversed a court order giving Simpson custody of the two children he had with his slain wife, Nicole Brown Simpson.

As with all aspects of the grisly, June 12, 1994, slashing killings of Nicole Brown and Ronald Goldman, the latest episode in this saga is at once divisive and sad. The appeals panel, however, made the appropriate decision based on sound reasoning.

It seemed quite inconceivable for Superior Court Judge Nancy Wieben Stock to make a rational decision regarding the future of Sydney, 13, and Justin, 10, without considering their father's behavior toward their mother.

Wieben Stock chose to ignore that Simpson was charged with two murders and that there was much evidence against him that he was held responsible for the deaths in a civil case despite his acquittal of criminal charges. She also refused to consider Simpson's anger and rage toward his ex-wife that Nicole had chronicled in a diary.

More so, Wieben Stock ran the custody trial in her Orange County courtroom while the civil case against Simpson was ongoing in Santa Monica. Therefore, she did not have access to new evidence allegedly linking Simpson to the killings, nor could she avail herself to the verdict in that case - an order to pay Goldman's family and Nicole Brown's estate $33.5 million.

The appeals panel said Wieben Stock made several technical errors, including basing the case on family law and not probate law, which deals with the administration of estates and the guardianship of minors.

While a retrial of the so-called trial of the century will no doubt be abhorred by the public, the information is without a doubt relevant to Simpson's right to raise his children.

There are several downsides in reopening the case. Chief among them is the psychological effect the testimony could have on the children, who are older and less likely to be shielded from media reports of events leaking out of what will likely be a closed hearing. Not to mention that the children's lawyer said they were ``very disappointed'' to hear the news of the reversal, and by all accounts it is apparent Simpson has cared for them well.

While California law favors a parent in most cases of guardianship, this unique case warrants a careful examination of the events that forced the custody fight in the first place. Although it seems odd for Simpson to prove he is the best person to raise the youngsters, it is not unreasonable for him to be required to do so.

He insists he is a good father so he shouldn't have too difficult a time prevailing - except, of course, for the widespread belief that he murdered their mother outside the home where the children were sleeping.