The U.S. Supreme Court case City of Richmond v. J.A. Croson Company in 1988 revolved around the constitutionality of a minority set-aside program implemented by the city of Richmond, Virginia. The program required prime contractors to award at least 30% of their subcontracting work to minority-owned businesses as an attempt to combat racial discrimination and promote diversity within the construction industry. However, J.A Croson Company challenged this policy after it was denied a contract for not meeting these requirements despite being the lowest bidder. In its ruling, the Supreme Court held that while combating racial discrimination is indeed a compelling state interest, such programs must be narrowly tailored and subject to strict scrutiny under equal protection clause of Fourteenth Amendment - meaning they must serve a compelling governmental interest and be specifically designed towards achieving that goal without unnecessarily infringing upon individual rights. The court found that Richmond's plan failed this test because it relied on generalized assertions about past societal discrimination rather than demonstrating specific instances where non-minority firms were benefiting from discriminatory practices in local construction industry; thus making it unconstitutional.

In the dissenting opinion for City of Richmond v. J.A. Croson Company, Justice Marshall argued that the majority's decision failed to acknowledge the reality and persistence of racial discrimination in America, particularly within government contracting industries. He contended that there was ample evidence demonstrating a long history of racial bias in these sectors which justified remedial measures such as affirmative action programs. In his view, Richmond’s minority set-aside program was not an attempt to maintain a racial balance but rather aimed at eliminating barriers to equal opportunity caused by past discrimination. Furthermore, he criticized the majority for applying strict scrutiny review - typically reserved for suspect classifications - arguing it undermined efforts towards achieving true equality by treating victims and perpetrators of racial prejudice alike under law.