They didn’t apply strict scrutiny. That’s what:

Rather than perform this searching examination, however, the Court of Appeals held petitioner could challenge only “whether [the University’s] decision to reintroduce race as a factor in admissions was made in good faith.” 631 F. 3d, at 236. And in considering such a challenge, the court would “presume the University acted in good faith” and place on petitioner the burden of rebutting that presumption. Id., at 231–232. The Court of Appeals held that to “second-guess the merits” of this aspect of the University’s decision was a task it was “ill-equipped to perform” and that it would attempt only to “ensure that [the University’s] decision to adopt a race-conscious admissions policy followed from [a process of] good faith consideration.” Id., at 231. The Court of Appeals thus concluded that “the narrow-tailoring inquiry—like the compelling-interest inquiry—is undertaken with a degree of deference to the Universit[y].” Id., at 232. Because “the efforts of the University have been studied, serious, and of high purpose,” the Court of Appeals held that the use of race in the admissions program fell within “a constitutionally protected zone of discretion.” Id., at 231.

These expressions of the controlling standard are at odds with Grutter’s command that “all racial classifications imposed by government ‘must be analyzed by a reviewing court under strict scrutiny.’ ” 539 U. S., at 326 (quoting Adarand Constructors, Inc. v. Peña, 515 U. S. 200, 227 (1995)). In Grutter, the Court approved the plan at issue upon concluding that it was not a quota, was sufficiently flexible, was limited in time, and followed “serious, good faith consideration of workable race-neutral alternatives.” 539 U. S., at 339. As noted above, see supra, at 1, the parties do not challenge, and the Court therefore does not consider, the correctness of that determination.

So what’s the right test for the poor 5th Circuit Panel that has to take this case again:

“The reviewing court must ultimately be satisfied that no workable race-neutral alternatives would produce the educational benefits of diversity.”

So what must happen on remand?

The District Court and Court of Appeals confined the strict scrutiny inquiry in too narrow a way by deferring to the University’s good faith in its use of racial classifications and affirming the grant of summary judgment on that basis. The Court vacates that judgment, but fairness to the litigants and the courts that heard the case requires that it be remanded so that the admissions process can be considered and judged under a correct analysis. See Adarand, supra, at 237. Unlike Grutter, which was decided after trial, this case arises from cross-motions for summary judgment. In this case, as in similar cases, in determining whether summary judgment in favor of the University would be appropriate, the Court of Appeals must assess whether the University has offered sufficient evidence that would prove that its admissions program is narrowly tailored to obtain the educational benefits of diversity. Whether this record—and not “simple . . . assurances of good intention,” Croson, supra, at 500—is sufficient is a question for the Court of Appeals in the first instance.