Update July 24: The Supreme Court sent a challenge to the University of Texas' affirmative action admissions process back to a lower court.
The compromise ruling throws out the decision by the New Orleans-based 5th U.S. Circuit Court of Appeals, which upheld the Texas admission plan.
Justice Anthony Kennedy, writing for the court, said the appeals court did not test the Texas plan under the most exacting level of judicial review. He said such a test is required by the court's 2003 decision upholding affirmative action in higher education.
Justice Ruth Bader Ginsburg was the lone dissenter.
Next week the U.S. Supreme Court is expected to announce its decision on the constitutionality of race-based admissions policies at public universities. It will be the latest ruling in a long history of challenges to various affirmative action efforts. Specifically, the court will determine whether the goal of greater racial diversity on campus justifies preferential treatment for minority applicants.