In the 1975 case Runyon et ux., dba Bobbe's School v. McCrary et al., the U.S. Supreme Court ruled that private schools could not discriminate based on race in their admissions policies, even if they did not receive federal funding. The case involved two African American students who were denied admission to a private school solely because of their race. The court held that this was a violation of Section 1981 of Title 42, which prohibits racial discrimination in making and enforcing contracts, including those for services such as education. This decision extended civil rights protections beyond public institutions to include privately owned entities.

In the dissenting opinion for Runyon et ux., DBA Bobbe's School v. McCrary et al., Justice William Rehnquist argued that the majority misinterpreted Section 1981 of the Civil Rights Act, which was intended to protect against racial discrimination in contractual relationships. He contended that private schools should retain their right to choose students based on any criteria they see fit, including race, as long as it does not involve state action or federal funding. According to him, this case did not involve a violation of equal protection under law because it concerned private actions rather than state-imposed segregation. Furthermore, he believed that Congress never intended Section 1981 to apply broadly and interfere with private decisions about who can attend a school; instead its purpose was more narrow - ensuring African Americans had same legal capacity as whites in making contracts and suing for enforcement.