In the case of Morton, Secretary of the Interior, et al. v. Mancari et al., 1973, the U.S Supreme Court upheld a hiring preference for qualified Indians in the Bureau of Indian Affairs (BIA). The respondents were non-Indian employees who claimed that this policy violated their Fifth Amendment rights by discriminating based on race. However, the court ruled in favor of Morton and others with a unanimous decision stating that such preferences are not racial discrimination but rather part of a broader political relationship between Native American tribes and Congress. They argued that these preferences were tied to unique obligations towards tribal self-governance and sovereignty rather than being racially motivated. Therefore, it was concluded that BIA's employment practices did not violate any anti-discrimination laws or constitutional provisions.

In the dissenting opinion for Morton v. Mancari, Justice William Rehnquist argued that the Indian preference statute was discriminatory and violated the Fifth Amendment's guarantee of equal protection under law. He contended that while Congress has broad powers to regulate affairs with Native American tribes, it does not have unlimited power to discriminate against non-Indians. The majority held that this was a political question rather than a racial one; however, Rehnquist disagreed stating there is no clear distinction between race and politics in this context as tribal membership is largely based on ancestry or blood quantum which are inherently racial concepts. Furthermore, he pointed out inconsistencies in applying such preferences only within Bureau of Indian Affairs (BIA) but not other federal agencies dealing with Indians' matters like Department of Health Education & Welfare or Veterans Administration etc., thereby suggesting arbitrariness in its application too.