The U.S. Supreme Court case Adarand Constructors, Inc. v. Federico Pena, Secretary of Transportation et al., 1994 was a landmark decision regarding affirmative action and racial discrimination in federal contracting processes. The plaintiff, Adarand Constructors Inc., argued that they were unfairly passed over for a subcontracting job because the primary contractor received financial incentives to hire companies controlled by "socially and economically disadvantaged individuals," which included certain minority groups under federal law at the time. The court ruled in favor of Adarand Constructors, stating that any racial classification imposed by the government must be analyzed under strict scrutiny - meaning it must serve a compelling governmental interest and be narrowly tailored to achieve that interest - regardless of whether it is meant to burden or benefit the group in question.

In the dissenting opinion for Adarand Constructors, Inc. v. Federico Pena, Justice Stevens argued that the majority's decision to apply strict scrutiny to all racial classifications by government was misguided and overly broad. He contended that not all governmental actions based on race should be treated as suspect or presumed unconstitutional; rather, they should be evaluated in context of their purpose and effect. In his view, affirmative action programs like the one challenged in this case were fundamentally different from laws designed to oppress or stigmatize minority groups - instead aiming at remedying past discrimination and promoting diversity. Therefore, he believed such programs shouldn't face the same level of judicial scrutiny as discriminatory laws do.