Establishing Common Law
When a decision in a court case is made and is called law, it typically is referred to as "good law. " Thus, subsequent decisions must abide by that previous decision. This is called "common law," and it is based on the principle that it is unfair to treat similar facts differently in subsequent occasions. Essentially, the body of common law is based on the principles of case precedent and stare decisis.
Case Precedent
In the United States legal system, a precedent or authority is a principle or rule established in a previous legal case that is either binding on or persuasive for a court or other tribunal when deciding subsequent cases with similar issues or facts. The general principle in common law legal systems is that similar cases should be decided so as to give similar and predictable outcomes, and the principle of precedent is the mechanism by which this goal is attained. Black's Law Dictionary defines "precedent" as a "rule of law established for the first time by a court for a particular type of case and thereafter referred to in deciding similar cases. "
Stare Decisis
Stare decisis is a legal principle by which judges are obliged to respect the precedent established by prior decisions. The words originated from the phrasing of the principle in the Latin maxim Stare decisis et non quieta movere: "to stand by decisions and not disturb the undisturbed. " In a legal context, this is understood to mean that courts should generally abide by precedent and not disturb settled matters.
In other words, stare decisis applies to the holding of a case, or, the exact wording of the case. As the United States Supreme Court has put it: "dicta may be followed if sufficiently persuasive but are not binding. "
In the United States Supreme Court, the principle of stare decisis is most flexible in constitutional cases:
Stare decisis is usually the wise policy, because in most matters it is more important that the applicable rule of law be settled than that it be settled right. ... But in cases involving the Federal Constitution, where correction through legislative action is practically impossible, this Court has often overruled its earlier decisions. ... This is strikingly true of cases under the due process clause.—Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 406–407, 410 (1932)
Louis Brandeis
Brandeis developed the idea of case law and the importance of stare decisis. His opinion in New Ice Co. set the stage for new federalism.