Adarand Constructors, Inc. v. Peña, 515 U.S. 200 (1995), was a landmark United States Supreme Court case which held that racial classifications, imposed by the federal government, must be analyzed under a standard of "strict scrutiny", the most stringent level of review, which requires that racial classifications be narrowly tailored to further compelling governmental interests. Justice Sandra Day O'Connor wrote the majority opinion of the Court, which effectively overturned Metro Broadcasting, Inc. v. FCC, in which the Court had created a two tiered system for analyzing racial classifications. Adarand held the federal government to the same standards as the state and local governments through a process of "reverse incorporation", in which the Fifth Amendment's Due Process Clause was held to bind the federal government to the same standards as state and local governments are bound under the 14th Amendment.
Background
At the time this case was litigated, many contracts let by agencies of the United States federal government contained financial incentives for the prime contractor to employ subcontractors that were owned or controlled by "socially and economically disadvantaged individuals". The US Small Business Administration or a relevant state agency would certify certain businesses as disadvantaged.In 1989, the US Department of Transportation (DOT) awarded a highway construction contract in Colorado to Mountain Gravel and Construction Company. Justice O'Connor found that while reviewing the process of "reverse incorporation", there is congruency between the 5th and 14th amendment. Justice O'Connor held that regardless of the motive, strict scrutiny analysis applied to all race-based classification for both the State and Federal governments. The court specifically noted that Metro Broadcasting departed from prior cases by holding "benign" racial classifications need only satisfy intermediate scrutiny, which goes against the congruency of the 5th and 14th amendment.
Dissent
Justice Stevens, joined by Justice Ginsburg and Justice Breyer, dissented from the majority regarding the congruency between the 5th and 14th amendment. Justice Stevens argues that the concept of congruence "ignores important practical and legal differences between federal and state or local decisionmakers...a rule of 'congruence' that ignores a 'purposeful incongruity' so fundamental to our system of government is unacceptable." Specifically, the Commission found that the Departments of Defense, Transportation, United States Department of Education, Energy, Housing and Urban Development, State, and the Small Business Administration, do not seriously consider race-neutral alternatives before implementing race-conscious federal procurement programs. The Commission found that such consideration is required by the strict scrutiny standard under Adarand and other Supreme Court decisions. Commissioner Michael Yaki dissented from the commission's report, arguing that the commission was taking a "radical step backwards" from the "race-progressive policies" of the past.