515 U.S. 200 (1995), argued 17 Jan. 1995, decided 12 June by vote of 5 to 4; O’Connor for the Court, Scalia, Kennedy, Thomas concurring, Stevens, Ginsburg, and Souter in dissent. During the 1960s and 1970s state and federal governments undertook a host of what came to be known as affirmative action programs. The goal of such programs was to make it easier for minorities to overcome past discrimination based on segregation. The Supreme Court in Fullilove v. Klutznick (1989) sustained a 1977 law that provided a 10 percent “set aside” for minority business enterprises. The 1977 act was the first federal statute since the Freedman's Bureau Act of 1866 to contain an explicitly race-conscious classification. The Court's decision had a substantial impact, leading to the passage of a host of federal legislation. At the same time, the Court refused to extend the same authority to local and state governments to build such programs, and in the same year they decided Fullilove, the justices struck down a Richmond, Virginia, program that set aside 30 percent of construction funds for minority contractors. In Richmond v. J. A. Croson Co., the justices concluded that such local programs deserved the most rigorous judicial scrutiny, called strict scrutiny, when race was involved. A year later, the high court decided the case of Metro Broadcasting, Inc. v. FCC, in which a bare majority of the Court, headed by Justice William J. Brennan, Jr., upheld a federal program to increase black ownership of broadcast licenses. Among other things, the Court confirmed that federal set-aside programs were not required to be tested under the strict scrutiny standard applied to local and state governments. In essence, the federal government had a special dispensation when it came to making color-conscious preferences.
The impact of the federal set-aside programs was pervasive and substantial. In 1994, for example, about $10 billion was at play. Among such programs spawned in the wake of Fullilove was one involving the Small Business Administration and the Department of Transportation. It provided financial incentives to government contractors that gave at least 10 percent of their business to minority subcontractors. Randy Pech was the white owner of Adarand Constructors, Inc., of Colorado Springs, Colorado. Adarand made the low bid on a guardrail project in the San Juan National Forest, but the subcontract went instead to a Hispanic-owned company. Pech then brought suit against the Department of Transportation and its head, Federico Peña, claiming that the subcontracting policy violated constitutional guarantees of equal protection and due process. A federal district court and a court of appeals rebuffed these claims on the grounds that the federal government could invoke race-based affirmative action programs that were not subject to strict scrutiny.
The justices, however, reversed course and remanded the case back to the lower court for additional review. In doing so, the somewhat fragmented majority decided that strict scrutiny should be applied to race-conscious affirmative action programs. Justice Sandra Day O’Connor, writing for the majority, placed federal set-aside programs on the same constitutional plane with local and state efforts. That meant, according to O’Connor, that all government classification by race “should be subjected to detailed judicial inquiry to ensure that the personal right to equal protection of the laws has not been infringed” (p. 227). To be constitutional, measures based on racial classifications had to be narrowly tailored and had to further a compelling government interest. Justice Antonin Scalia went even further than O’Connor, noting his belief that the program could never withstand strict scrutiny. “In the eyes of the government,” Scalia wrote, “we are just one race here. It is American” (p. 239). Justice Clarence Thomas, in another concurring opinion, described such programs as patronizing and paternalistic measures that prevented blacks from competing on terms that could prove their real worth.