In 1983, the Richmond City Council, in the state of Virginia, adopted the Minority Business Utilization Plan, which required government-supported construction contractors to set-aside 30% of its subcontracts to one or more Minority Business Enterprises. However, in Richmond City v. J.A.Croson Co, the court, again reflecting the influence of the Reagan-era appointees, held that racial classifications within state and local Set-Aside programs were inherently questionable and were to be subject to the most searching standard of constitutional review (strict scrutiny) under the Equal Protection provisions of the Fourteenth Amendment. By a six-to-three vote, the court invalidated the Richmond City Council’s set-aside plan that had required contractors to subcontract at least 30 percent of the dollar value of contracts to minority-owned businesses.

The following year, the Federal Communications Commission (FCC) adopted two minority preference policies. First, the FCC awards an enhancement for minority ownership and participation in management, which is weighed together with all other relevant factors in comparing mutually exclusive applications for licenses for new radio or television broadcast stations. Second, the FCC's so-called "distress sale" policy allows a radio or television broadcaster whose qualifications to hold a license have come into question to transfer that license before the FCC resolves the matter in a non-comparative hearing, but only if the transferee is a minority enterprise that meets certain requirements. The court ruled constitutional a policy developed by the FCC that granted preferences in the purchase of broadcast licenses to minority-controlled firms. In this case, the state’s objective of enhancing broadcast diversity was important enough, the court majority declared, to validate the state’s use of an otherwise questionable racial classification.