Michigan's law banning colleges from using race-based affirmative action in hiring and admissions is unconstitutional, a state appeals court said Friday.
The court ruled 2-1. The U.S. Supreme Court is almost certain to have the last word on the case, the Detroit Free Press reported.
The law was approved by a 2006 referendum. Whites voted overwhelmingly in favor of the change while blacks voted against it.
The court found Proposal 2 denied minorities due process.
"The majority may not manipulate the channels of change in a manner that places unique burdens on issues of importance to racial minorities," Judge R. Cole Gray wrote.
Jennifer Gratz, who sued the University of Michigan after being rejected by the law school and then led the Proposal 2 campaign, called the decision "insane."
"I can't imagine this ruling will stand," she said.
George Washington, a Detroit lawyer involved in the legal battle against Proposal 2, called the ruling "a tremendous victory."