Legal Guidance on the Implications of the Supreme Court's Decision in Adarand Constructors, Inc. v. Pena

19 Op. O.L.C. 171

Legal Guidance on the Implications of the Supreme Court's Decision in Adarand Constructors, Inc. v. Pena

No. 95-15

United States Department of Justice

June 28, 1995

WALTER DELLINGER Assistant Attorney General Office of Legal Counsel.

Legal Guidance on the Implications of the Supreme Court's Decision in Adarand Constructors, Inc. v Pena

This memorandum sets forth preliminary legal guidance on the implications of the Supreme Court's decision in Adarand Constructors, Inc. v. Peha, which held that "strict scrutiny" is the standard that governs judicial review of the consututionahty of federal affirmative action programs that use racial and ethnic criteria as a basis for decisionmaking. The memorandum is not intended to serve as a definitive statement of what Adarand means for any particular affirmative action program; rather it is intended to provide a general overview of the Court's decision and the application of the strict scrutiny standard in the context of affirmative action.

MEMORANDUM OPINION TO GENERAL COUNSELS

This memorandum sets forth preliminary legal guidance on the implications of the Supreme Court's recent decision in Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995), which held that federal affirmative action programs that use racial and ethnic criteria as a basis for decisionmaking are subject to strict judicial scrutiny. The memorandum is not intended to serve as a definitive statement of what Adarand means for any particular affirmative action program. Nor does it consider the prudential and policy questions relevant to responding to Adarand. Rather, it is intended to provide a general overview of the Court's decision and the new standard for assessing the constitutionality of federal affirmative action programs.

Our conclusions can be briefly summarized. Adarand made applicable to federal affirmative action programs the same standard of review, strict scrutiny, that City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) applied to state and local affirmative action measures-with the important caveat that, in this area, Congress may be entitled to greater deference than state and local governments. Although Adarand itself involved contracting, its holding is not confined to that context; rather, it is clear that strict scrutiny will now be applied by the courts in reviewing the federal government's use of race-based criteria in health, education, hiring, and other programs as well.

The Supreme Court in Adarand was careful to dispel any suggestion that it was implicitly holding unconstitutional all federal affirmative action measures employing racial or ethnic classifications. A majority of the Justices rejected the proposition that "strict scrutiny" of affirmative action measures means "strict in theory, fatal in fact, " and agreed that "[t)he unhappy persistence of both the practice and the lingering effects of racial discrimination against minority groups in this country" may justify the use of race-based remedial measures in certain circumstances. 515 U.S. at 237. See Id. at 268 (Souter, J., dissenting); id. at 273 (Ginsburg, J., dissenting). Only two Justices advocated positions that approach a complete ban on affirmative action. [ 172]

The Court's decision leaves many questions open-including the constitutionality of the very program at issue in the case. The Court did not discuss in detail the two requirements of strict scrutiny: the governmental interest underlying an affirmative action measure must be "compelling" and the measure must be "narrowly tailored" to serve that interest. As a consequence, our analysis of Adarand's effects on federal action must be based on Croson and the lower court decisions applying strict scrutiny to state and local programs. It is unclear, however, what differences will emerge in the application of strict scrutiny to affirmative action by the national government; in particular, the Court expressly left open the question of what deference the judiciary should give to determinations by Congress that affirmative action is necessary to remedy discrimination against racial and ethnic minority groups. Unlike state and local governments, Congress may be able to rely on national findings of discrimination to justify remedial racial and ethnic classifications; it may not have to base such measures on evidence of discrimination in every geographic locale or sector of the economy that is affected. On the other hand, as with state and local governments under Croson, Congress may not predicate race-based remedial measures on generalized, historical societal discrimination.

Two additional questions merit mention at the outset. First, the Court has not resolved whether a governmental institution must have sufficient evidence of discrimination to establish a compelling interest in engaging in race-based remedial action before it takes such action. A number of courts of appeals have considered this question in reviewing state and local affirmative action plans after Croson, and all have concluded that governments may rely on "post-enactment" evidence - that is, evidence that the government did not consider when adopting the measure, but that reflects evidence of discrimination providing support for the government's determination that remedial action was warranted at the time of adoption. Those courts have said that the government must have had some evidence of discrimination when instituting an affirmative action measure, but that it need not marshal all the supporting evidence at that time. Second, while Adarand makes clear that remedying past discrimination will in some circumstances constitute a compelling interest sufficient to justify race-based measures, the Court did not address the constitutionality of programs aimed at advancing nonremedial objectives - such as promoting diversity and inclusion. For example, under Justice Powell's controlling opinion in Regents of the Univ. of Calif, v. Bakke, 438 U.S. 265 (1978), increasing the racial and ethnic diversity of the student body at a university constitutes a compelling interest, because it enriches the academic experience on campus. Under strict scrutiny, it is uncertain whether and in what settings diversity is a permissible goal of affirmative action beyond the higher education context. To the extent that affirmative action is used to foster racial and ethnic diversity, the government must seek some further objective beyond the achievement of diversity itself. [ 173]

Our discussion in this memorandum proceeds in four steps. In Section I, we analyze the facts and holding of Adarand itself, the scope of what the Court did decide, and the questions it left unanswered. Section II addresses the strict scrutiny standards as applied to state and local programs in Croson and subsequent lower court decisions; we consider the details of both the compelling interest and the narrow tailoring requirements Croson mandated. In Section III, we turn to the difficult question of how precisely the Croson standards should apply to federal programs, with a focus on the degree of deference courts may give to congressional determinations that affirmative action is warranted. Finally, in an appendix, we sketch out a series of questions that should be considered in analyzing the validity under Adarand of federal affirmative action programs that employ race or ethnicity as a criterion. The appendix is intended to guide agencies as they begin that process.

I. The Adarand Case

A. Facts

Adarand involved a constitutional challenge to a Department of Transportation ("DOT") program that compensates persons who receive prime government contracts if they hire subcontractors certified as small businesses controlled by "socially and economically disadvantaged" individuals. The legislation on which the DOT program is based, the Small Business Act, establishes a government-wide goal for participation of such concerns at "not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year." 15 U.S.C. § 644(g)(1). The Act further provides that members of designated racial and ethnic minority groups are presumed to be socially disadvantaged. Id. §637(a)(5), §637(d)(2), (3); 13 C.F.R. § 124.105(b)(1).^[1] The presumption is rebuttable. 13 C.F.R. §§ 124.1 11(c)-(d), 124.601-124.609.^[2]

In Adarand, a nonminority firm submitted the low bid on a DOT subcontract. However, the prime contractor awarded the subcontract to a minority-owned firm that was presumed to be socially disadvantaged; thus, the prime contractor received additional compensation from DOT. 515 U.S. at 205. The nonminority firm sued DOT, arguing that it was denied the subcontract because of a racial classification, in violation of the equal protection component of the Fifth Amendment's [ 174] Due Process Clause. The district court granted summary judgment for DOT. The Court of Appeals for the Tenth Circuit affirmed, holding that DOT's race-based action satisfied the requirements of "intermediate scrutiny, " which it determined was the applicable standard of review under the Supreme Court's rulings in Metro Broad., Inc. v. FCC, 497 U.S. 547 (1990), and Fullilove v. Klutznick, 448 U.S. 448 (1980). See Adarand, 515 U.S. at 210.

B. The Holding

By a five-four vote, in an opinion written by Justice O'Connor, the Supreme Court held in Adarand that strict scrutiny is now the standard of constitutional review for federal affirmative action programs that use racial or ethnic classifications as die basis for decisionmaking. The Court made clear that this standard applies to programs that are mandated by Congress, as well as those undertaken by government agencies on their own accord. 515 U.S. at 227. The Court overruled Metro...