## Facts

- Richmond, Virginia adopted a Minority Business Utilization Plan requiring prime contractors on city construction projects to subcontract at least 30% of contract dollars to “Minority Business Enterprises” (MBEs).
- An MBE was defined as a business at least 51% owned and controlled by members of specified minority groups, without limiting eligibility to firms located in Richmond.
- The City characterized the Plan as remedial and intended to increase minority participation in public construction projects.
- The City relied on statistical disparities (including that only 0.67% of prime contract dollars had gone to minority firms despite Richmond’s population being about 50% Black), limited information about minority participation in trade associations, and general claims of discrimination in the construction industry.
- The City did not identify specific instances of discrimination by Richmond in awarding contracts or specific exclusionary practices by local prime contractors against minority subcontractors.
- Croson, a non-minority contractor and the sole bidder on a city contract, sought a waiver but was denied and lost the contract after failing to meet the 30% requirement.
- Croson sued under 42 U.S.C. § 1983, alleging the Plan violated the Equal Protection Clause.

## Issues

1. Whether race-based set-asides in municipal contracting are subject to strict scrutiny under the Equal Protection Clause.
2. Whether Richmond had a sufficiently supported compelling interest to justify the 30% MBE requirement.
3. Whether the Plan was narrowly tailored, including whether it properly matched any identified injury and considered race-neutral alternatives.

## Decision

- The Supreme Court affirmed the Fourth Circuit and held the Plan unconstitutional under the Equal Protection Clause.
- The Court applied strict scrutiny to Richmond’s race-based contracting program.
- The Court found Richmond lacked a “strong basis in evidence” of identified past discrimination that warranted the Plan.
- The Court held the Plan was not narrowly tailored, citing the fixed 30% quota, the overinclusive definition of covered groups and geographic scope, the limited role of the waiver process, and the failure to seriously consider race-neutral measures.

## Legal Principles

- All state and local governmental racial classifications, including purportedly remedial classifications, are subject to strict scrutiny.
- Remedying identified past discrimination can be a compelling interest only when supported by a strong basis in evidence tied to the governmental unit or the relevant local market.
- General claims of societal discrimination and crude comparisons between population percentages and contracting awards are insufficient to justify rigid race-based quotas.
- Narrow tailoring requires calibrating any remedy to demonstrated injury, avoiding over- and under-inclusiveness, considering workable race-neutral alternatives, and avoiding rigid percentage quotas untethered to actual availability.

## Conclusion

The Court invalidated Richmond’s 30% MBE subcontracting requirement, holding that municipal race-based contracting remedies require strict scrutiny, a strong evidentiary showing of identified discrimination, and careful tailoring that does not amount to racial balancing.


City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989)