Adarand Constructors, Inc. v. Pena

Background

Adarand is a Colorado-based highway contractor that lost a subcontract despite submitting the low bid. The prime contractor received extra payment when it hired a subcontractor certified as a disadvantaged business, a status often based on race-based presumptions in federal statutes and regulations. Adarand sued federal officials, claiming those presumptions discriminate on the basis of race and violate the equal protection component of the Fifth Amendment. The lower courts upheld the rules until the Supreme Court took the case.

Reasoning

The central question was what judicial test courts should use for government actions that classify people by race. The Court held that all racial classifications by federal, state, or local governments must be reviewed under strict scrutiny — the most demanding test (the government must show a compelling interest and that the race-based step is narrowly tailored). The opinion overruled earlier decisions to the extent they allowed a weaker test for some federal race-based programs. Because the Tenth Circuit had applied a lower test and left factual and regulatory questions unresolved, the Court vacated its judgment and sent the case back for further proceedings.

Real world impact

Federal contractors, minority-owned subcontractors, and agencies that certify disadvantaged businesses are affected. Lower courts must now re-examine similar programs under strict scrutiny, and agencies may need to justify race-based presumptions or consider race-neutral alternatives. This decision is not a final ruling on the program’s legality; it requires renewed judicial factfinding.

Dissents or concurrances

Several Justices wrote separately. Justice Scalia and Justice Thomas concurred in part, expressing limits on racial remedies; Justices Stevens, Souter, and Ginsburg dissented, urging deference to Congress and existing precedents.