The Supreme Court had sent the case back  to Texas for a reconsideration of the university’s affirmative action policy under a strict scrutiny standard.
In the 7-1 decision by Justice Anthony Kennedy, the Court said that “because the Fifth Circuit did not hold the University to the demanding burden of strict scrutiny articulated in Grutter and Regents of Univ. of Cal. v. Bakke, its decision affirming the District Court’s grant of summary judgment to the University was incorrect.”
“[S]trict scrutiny does require a court to examine with care, and not defer to, a university’s ‘serious, good faith consideration of workable race-neutral alternatives,’” Kennedy added.
In a 2-1 decision, the Fifth Circuit found that Texas had met that burden:
It is settled that instruments of state may pursue facially neutral policies calculated to promote equality of opportunity among students to whom the public schools of Texas assign quite different starting places in the annual race for seats in its flagship university. It is equally settled that universities may use race as part of a holistic admissions program where it cannot otherwise
achieve diversity. This interest is compelled by the reality that university education is more the shaping of lives than the filling of heads with facts—the classic assertion of the humanities. Yet the backdrop of our efforts here includes the reality that accepting as permissible policies whose purpose is to achieve a desired racial effect taxes the line between quotas and holistic use of
race towards a critical mass. We have hewed this line here, persuaded by UT Austin from this record of its necessary use of race in a holistic process and the want of workable alternatives that would not require even greater use of race, faithful to the content given to it by the Supreme Court. To reject the UT Austin plan is to confound developing principles of neutral affirmative action,
looking away from Bakke and Grutter, leaving them in uniform but without command—due only a courtesy salute in passing.
The decision is here .