The Adarand Constructors, Inc. case challenged the Federal Government's practice of awarding financial incentives to contractors who hire subcontractors based on race-based presumptions. The Supreme Court remanded the case for further proceedings, stating that a different standard of review should be applied. The Small Business Act aims to provide small businesses, including those owned by socially and economically disadvantaged individuals, with opportunities to participate in federal agency contracts. The Act defines "socially disadvantaged individuals" and "economically disadvantaged individuals" and sets a government-wide goal of at least 5% participation by small businesses owned and controlled by socially and economically disadvantaged individuals in prime contract and subcontract awards for each fiscal year. The Small Business Administration (SBA) has implemented the Act's directives through the "8(a) program" for small businesses controlled by socially and economically disadvantaged individuals. The program provides benefits, including automatic eligibility for subcontractor compensation provisions. To participate, a business must be "small" and 51% owned by socially and economically disadvantaged individuals. The SBA presumes certain groups are socially disadvantaged and allows others to prove it with clear and convincing evidence. However, social disadvantage alone is not enough, and economic disadvantage must also be proven according to specific criteria.

Justice Scalia agrees with the Court's opinion except for Part III-C, which he believes is unconstitutional. He argues that the government cannot use past racial discrimination as a reason to discriminate based on race. He believes that the Constitution focuses on the individual and rejects racial dispositions. Pursuing racial entitlement, even for good reasons, reinforces the thinking that led to race slavery, privilege, and hatred. He doubts that the program in question would pass strict scrutiny, but he leaves it to the lower court to decide.

Justice Thomas agrees with the majority's decision that strict scrutiny should be applied to all government classifications based on race. However, he disagrees with the idea that there is a racial paternalism exception to the principle of equal protection. He believes that laws designed to subjugate a race are morally and constitutionally equivalent to those that distribute benefits based on race to promote equality. The government cannot make individuals equal, but can only recognize, respect, and protect them as equals before the law. The fact that a government program may have good intentions does not excuse the fact that the government cannot make distinctions based on race under the Constitution. These programs not only raise serious constitutional concerns but also undermine the moral foundation of the equal protection principle. While remedial racial preferences may reflect a desire to foster equality, racial paternalism and its unintended consequences can be as harmful as any other form of discrimination.

Justice Stevens dissents from the Court's decision, arguing that the Court's emphasis on consistency overlooks important differences between situations. He believes that discrimination against Japanese-Americans during World War II was invidious because the Government imposed special burdens on a minority class defined by racial and ethnic characteristics. Justice Stevens emphasizes the importance of stare decisis and believes that the Court has a duty to affirm the judgment of the Court of Appeals. He suggests that a single standard that equates remedial preferences with invidious discrimination cannot be defended in the name of "equal protection." The judge disagrees with the Court's doctrine of "congruence" and believes that Congress's deliberations on affirmative action should be given greater deference than those of a State or municipality.

Adarand Constructors, Inc. challenged the use of race-based remedial programs by federal agencies without specific findings of discrimination. The court applied the principle of stare decisis and upheld the Fullilove case, which established that some preferential treatment may be necessary to address the effects of discrimination in the construction industry. The court remanded the case for further consideration of the current effects of past discrimination and the necessity for a preferential remedy. The court recognized that strict scrutiny can be compatible with the survival of a classification, indicating that concepts of equal protection are more flexible than standard categories suggest.

Justice Ginsburg dissents from the Court's decision, agreeing with Justice Souter that the Court's intervention is unnecessary given the political branches' attention to affirmative action. She also agrees with Justice Stevens that Congress' institutional competence and constitutional authority in addressing historic racial subjugation deserve deference. The statutes and regulations in question aim to address the ongoing effects of racial discrimination in the United States, which have persisted due to the historical failure to recognize racial equality. The Court recognizes Congress' authority to take affirmative action to end discrimination and counteract its lasting effects, which are still evident in workplaces, markets, and neighborhoods. Congress can conclude that a well-designed affirmative action program may help achieve the equal protection of the laws promised by the Fourteenth Amendment since 1868, given the history and practical consequences of discrimination.