There are no theocracies in America, right? After all, we have constitutionally mandated separation of religion and government.

Perhaps not. A village in New York called Kiryas Joel appears to be going right up to the line – and perhaps lurching over it. An interesting case just filed in federal court will test the ability of a religious group to actually run an entire town.

Kiryas Joel is an enclave of ultra-orthodox Jews who belong to the Satmar Hasidic sect. Members of this group believe in separating themselves from others – they'd rather not be around non-sect members. Thirty-four years ago, they won the right to create their own village from the surrounding community of Monroe.

The village's founders might have envisioned an idyllic community where people of a shared faith lived in harmony. It hasn't worked out that way. As often happens when people live in insular communities, factions emerge. Dissidents in Kiryas Joel don't like the way the town of about 20,000 is being run. The dissidents, who by some accounts now make up 40 percent of the community, say religious discrimination is rampant. They say if you don't belong to the right synagogue, you're a second-class citizen.

A local newspaper, the Times Herald-Record in Middletown, N.Y., reported, ''The case alleges discrimination against dissidents…in various facets of public life, from tax exemptions for synagogues to election improprieties to selective enforcement of village noise ordinances. Among the most serious allegations is that Kiryas Joel's Public Safety Department, a quasi-police agency, has acted as enforcers for the main congregation and tolerated acts of violence and intimidation against dissidents by unruly crowds of young supporters of Satmar Grand Rebbe Aron Teitelbaum, the leader of Kiryas Joel's majority faction.''

It's tempting to dismiss this as an internecine squabble among members of a small religious group. It's not that simple. The Satmar group may not be large, but its members are politically savvy. In 1989, they successfully lobbied the New York legislature for their own ''public'' school system.

The Satmars didn't want their children to be educated alongside non-Satmars. For most Satmar families, this wasn't a problem since their children attend private religious academies. But the community lacked the resources to educate its special-needs children. The New York legislature's answer was to give the village its own public school, with boundaries drawn in such a way that all non-Satmars were excluded.

The U.S. Supreme Court struck down the scheme in 1994, but New York lawmakers quickly began brain-storming other ways to keep the school open. More litigation ensued. Two other laws were struck down by the courts before the legislature finally crafted a measure that passed constitutional muster.

How did a little community gain such influence? The New York Times explained earlier this year that while Kiryas Joel is a poor community, it has discovered the secret of getting a lot of attention from politicians: ''Because the community typically votes as a bloc, it wields disproportionate political influence, which enables it to meet those challenges creatively.''

Meanwhile, visitors to Kiryas Joel might be forgiven for believing they have stepped into a mini-theocracy. A sign at the village entrance admonishes visitors to dress modestly. Cleavage-revealing tops for women are verboten, and both sexes are told to cover arms and legs. Couples are advised to ''maintain gender separation in public places.''

The sign was erected by the town's largest synagogue. Its wording is tough, but in fact the village can't legally enforce rules like this. Still, women who dare to visit the community while wearing skimpy summer outfits have reported scowls and glares. (Imagine the reaction from the Religious Right if this were a town of fundamentalist Muslims and they erected a sign reading, ''Women are welcome to visit if accompanied by a male relative. Please respect our values by wearing a burqa.'')

I realize the Satmars want to live on their own (although they've chosen an odd place to do that – just 50 miles north of New York City), but that does not give them the right to use government as a device to enforce religious conformity. Nor does it give them the right to create an insular theocracy. Our Constitution doesn't allow that.

The lawsuit has already achieved some of its goals by shining light on questionable practices in this enclave, and there may be more revelations as the case moves forward. This situation doesn't pass the constitutional smell test. It definitely bears watching.