Adarand Constructors, Inc. v. Mineta

Background

A construction company, Adarand, challenged the Department of Transportation’s (DOT’s) Disadvantaged Business Enterprise (DBE) programs that use race-conscious measures to influence contract awards. The Supreme Court previously held in Adarand I that any race-based federal program must meet strict scrutiny. After remand, a district court found the DOT’s race-based practices unconstitutional as administered in 1997. The Court of Appeals later focused on the DOT regulations issued under the Transportation Equity Act (TEA-21), which govern federal highway funds awarded through States and localities, and it found the original Subcontractor Compensation Clause (SCC) unconstitutional; the Government has since abandoned the SCC.

Reasoning

The core question was whether the DOT’s current DBE rules survive strict scrutiny. The Supreme Court concluded it could not answer because the case’s posture had shifted: the Court of Appeals reviewed only state-and-local procurement rules under TEA-21, but the petitioner now asks the Court to review a different set of rules governing direct federal procurement under the Small Business Act (§8(d)(4)-(6)). Those direct-procurement provisions were not considered below, and the petitioner did not properly present standing and scope arguments until shortly before oral argument, including voluminous evidence never lodged in lower courts. Following precedent that factual and standing disputes like these must be addressed first by lower courts, the Supreme Court declined to decide the merits or to resolve standing in the first instance.

Real world impact

The Court dismissed its review as improvidently granted and did not rule on the constitutional merits. The SCC automatic incentive is discontinued, but no final nationwide ruling was made about the constitutionality of direct federal procurement programs; those questions are left for lower courts.