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I interviewed for a law clerk position at a mid-sized firm - phone then in person. I thought it went well, but the hr e-mailed me saying the partner decided to go a different way with hiring a law clerk, and that this is not a result of bad references, just so that I am aware and do not worry. Does this ever happen, or is it just a nice way of saying they picked someone else?

It certainly was nice of them to let you know that it wasn't a reference that shot you down. Most places would never offer that courtesy. They would just send you a stock rejection letter/email, and you would be left guessing why.

Sounds like the HR person was trying to tell you that you were a strong applicant but the partner decided to hire his nephew or something, so don't flip out and replace your references.

wow, just noticed their new posting with a different deadline. fml.

Well, if it wasn't going to be a good fit, it's actually better to know right up front than to throw away your summer. I know that probably doesn't make you feel better, but it's true. I threw away one summer at a firm that was a terrible fit.

Bad HR technique. HR should never give a reason (for example, oh, and just to let you relax & not worry, it's not because you're a Hispanic female).

P.S. Get new references.