448 U.S. 448 (1980), argued 27 Nov. 1979, decided 2 July 1980 by vote of 6 to 3; Burger for the Court, Marshall, Brennan, and Blackmun concurring, Stewart, Rehnquist, and Stevens in dissent. In the Public Works Employment Act of 1977, Congress provided for a 10 percent “set aside” for minority business enterprises (MBEs). This was the first federal statute containing an explicitly race conscious classification since the Freedman's Bureau Act of 1866.
The MBE provision was challenged by a group of nonminority contractors, which argued that the provision violated the “equal protection component” of the Fifth Amendment's Due Process Clause recognized in Bolling v. Sharpe (1954). A federal district court dismissed the suit and the Court of Appeals for the Second Circuit affirmed the lower court's action.
Six justices of the Supreme Court voted to uphold the set-asides, although they differed sharply in their reasoning. One plurality (Burger, Powell, and White) deferred to the unique status accorded congressional judgments on racial issues by Article I's spending and commerce clauses and the Fourteenth Amendment's Enforcement Clause (section 5). Congress need not “act in a wholly ‘color-blind’ fashion” (p. 482), and the set-aside were a “reasonably necessary means of furthering the compelling governmental interest in redressing the discrimination that affects minority contractors” (p. 515). Chief Justice Warren Burger's opinion accepted the government's contention that Congress had acted with due deliberation and knowledge even though there had been no specific legislative hearings or deliberations on the set-aside. The 1977 act did not appear out of nowhere; Congress had been struggling with the plight of MBEs for years, and its members were familiar with the discriminatory practices of the construction industry. The evidentiary and justiciability restraints that hobble judicial action do not apply to Congress. It may act to eradicate social evils where a court must wait for a case challenging constitutional or statutory violations. Furthermore this was not an inflexible quota; it was temporary in duration, limited in coverage, and selective in enforcement.
A second plurality (Marshall, Brennan, and Blackmun) relied on the rationale developed by Brennan in Regents of the University of California v. Bakke (1978). Since the set-asides did not elevate any individual or group to a status of racial superiority, the stringent test of equal protection applied to invidious racial distinctions was inapposite. However, the risk that even so well-intentioned a program might impose unfair burdens on innocent third parties necessitated judicial scrutiny more demanding than the traditional equal protection test. The set-aside provision, in the opinion's judgment, withstood this heightened scrutiny.
The three dissenters were not persuaded. For Potter Stewart and William Rehnquist, the MBE set-asides were a return to the discredited Plessy v. Ferguson (1896) rule of preferences “based on lineage”—of a “government of privileges based on birth” (p. 531). Government endorsement of racial classifications, even when these classifications are drawn to advance salutary rather than invidious objectives, perpetuates the socially divisive belief that race should count. Rather than celebrating the plenary powers granted to Congress, Stewart and Rehnquist argued that if “a law is unconstitutional, it is no less unconstitutional just because it is a product of the Congress of the United States.” In their opinion, only courts of equity acting in proceedings that identify specific victims and victimizers possess the “dispassionate objectivity” and “flexibility” necessary to “mold a race conscious remedy” consistent with the Constitution's command of strict race neutrality (p. 527).