Stare decisis tells a court to follow precedent, but not every precedent. Before a lawyer cites a case, she asks: does this decision bind the court I am in, or can it only persuade?
Key idea
A decision is binding (mandatory) authority on the courts below it in the same system, and on the same court. Decisions from other states, other federal circuits or lower courts are only persuasive, and so are secondary sources such as treatises, the Restatements and law review articles.
- U.S. Supreme Court on federal law: binds every court in the country, federal and state.
- Federal court of appeals: binds the district courts in its own circuit (and later panels of the same circuit).
- State supreme court on its state's law: binds every court of that state, and federal courts applying that state's law.
- Persuasive only: other circuits, other states' courts, trial court opinions, dicta, foreign courts, treatises and articles.
Why it works
Authority follows the chain of review. A court is bound by the courts that can reverse it, because ignoring them would only lead to reversal and unequal treatment. A court in Texas cannot be reversed by a court in California, so California's rulings can only persuade. On questions of a state's own law, the state's highest court has the last word, so a federal court deciding a case under that law (for example, in a diversity case, under Erie Railroad Co. v. Tompkins, 1938) follows the state court's rulings. Persuasive authority still matters: when no binding case answers a question, a well-reasoned opinion from elsewhere can carry the day.
Worked example: A circuit split
The Fourth Circuit reads a federal statute one way; the Seventh Circuit reads it the other way. A case under the statute is filed in federal district court in Illinois (Seventh Circuit). Which reading binds the court?
- Illinois is in the Seventh Circuit, so Seventh Circuit decisions bind the district court there.
- The Fourth Circuit's decision is persuasive only.
- Disagreement among circuits is a "circuit split," one of the main reasons the Supreme Court grants review: its ruling then binds all of them.
Answer: The Seventh Circuit's reading.
Worked example: Out-of-state precedent
An Oregon trial court faces a new question of Oregon contract law. No Oregon case decides it, but the Supreme Court of California has decided the same question. Must the Oregon court follow it?
- California's courts are not above Oregon's; it is a different system.
- So the California ruling is persuasive: the Oregon court may adopt its reasoning if it finds it convincing, or reject it.
Answer: No. It is persuasive, not binding.
Common mistake
Thinking a federal court of appeals ruling binds every federal court. It binds courts within its own circuit; other circuits may disagree, creating a split that the Supreme Court may resolve. Check: draw the line of appeal. Could the court that decided the precedent reverse the court you are in? If not, the precedent is persuasive.
This is an educational course, not legal advice.