Define: Stare Decisis

Stare decisis is a legal principle that means “to stand by things decided.” It refers to the practice of courts following precedents established in previous cases when deciding similar issues or controversies. Stare decisis provides consistency, predictability, and stability in the legal system by promoting respect for past judicial decisions and ensuring uniformity in the application of law. Under this principle, courts are generally bound to follow decisions made by higher courts within the same jurisdiction and to adhere to established legal principles and interpretations. While courts may depart from precedent in certain circumstances, such as when a previous decision was clearly erroneous or outdated, stare decisis serves as a fundamental principle of judicial decision-making in common law systems.

Stare decisis is a legal notion that requires courts to consider preceding cases when deciding a similar issue. Stare decisis assures that similar events and facts are addressed uniformly in similar cases. Simply put, it requires courts to adhere to legal precedents established by prior rulings.

Stare decisis is a Latin phrase that translates as “to stand by what has been decided.”

The common law structure of the United States is a unified method of resolving legal disputes based on the principle of stare decisis, which emphasises the importance of legal precedent. A precedent is a previous ruling or verdict in any case. Stare decisis requires courts to consider precedents when presiding over an ongoing case with similar facts.

• Stare decisis is a legal notion that requires courts to consider preceding cases when deciding a similar issue.
• Stare decisis demands that cases be decided in accordance with the precedents established by other similar cases in comparable jurisdictions.
• Because the Supreme Court of the United States is the nation’s highest court, all states rely on Supreme Court precedents.

What Makes a Precedent?

When a judge rules on a one-of-a-kind case with little prior precedent, it may become precedent. In addition, any precedent that has been overruled in a current case is replaced with a new judgement in a similar current case. The rule of stare decisis requires courts to uphold past judgements or rulings made by higher courts within the same court system.

For example, Kansas state appellate courts will follow their precedent, as well as the precedent of the Kansas Supreme Court and the precedent of the United States Supreme Court. According to California, Kansas is not required to follow precedents from other states’ appellate courts. However, when presented with a unique instance, Kansas may use the precedent of California or any other state with an established judgement as a guide in establishing its own precedent.

As the highest court in the country, all courts are obligated to follow the Supreme Court’s judgements. As a result, rulings made by the Supreme Court constitute binding precedent or obligatory stare decisis for the system’s lower courts. When the Supreme Court overturns a precedent established by lower courts in the legal hierarchy, the new decision becomes stare decisis in future court sessions. If a case decided in a Kansas court that has followed a given precedent for decades is taken to the United States Supreme Court and overruled by that court, the Supreme Court’s decision supersedes the prior precedent, and Kansas courts must adjust to the new norm as precedent.

Overturning Precedent

The Supreme Court has reversed its own previous rulings in rare cases—David Schultz, professor of law at the University of Minnesota and professor of political science at Hamline University, reports that the Court did so 145 times out of “25,544 Supreme Court opinions and judgements after oral arguments” from 1789 to 2020. This equates to less than half a percent.

Schultz cites Brown v. Board of Education as the most famous reversal to date. That decision overturned the Plessy v. Ferguson separate-but-equal doctrine rule from 1896, which justified segregation. If the Supreme Court overturns Roe v. Wade, the 1973 decision that legalised abortion, Dobbs v. Jackson Women’s Health Organisation may be the next important case to break from stare decesis The judgement is expected in June 2022.

Examples

Insider trading is the use of material, non-public information for financial gain in the securities sector. The insider can use the information in their portfolio or sell it to an outsider for a fee. When dealing with insider trading, courts look to the 1983 case of Dirks v. SEC for guidance. In this case, the United States Supreme Court determined that insiders are culpable if they got material gains directly or indirectly from revealing the information to someone who acts on it. Furthermore, there is the possibility of abusing confidential information when it is given to a relative or acquaintance. This verdict became precedent and is sustained by courts dealing with similar financial offences.

Utilising Stare Decisis

The Supreme Court used stare decisis to form its decision in Salman v. United States in 2016. Bassam Salman earned an estimated $1.5 million via insider knowledge obtained through his brother-in-law, Maher Kara, a Citigroup investment banker at the time. While Salman’s counsel argued that he should only be punished if he compensated his brother-in-law in cash or kind, the Supreme Court judge held that insiders do not have to be reimbursed in exchange for disclosing company secrets. According to stare decisis, the sensitive information delivered to Salman was regarded a gift, as Dirks v. SEC makes clear that a tipper’s fiduciary obligation is breached when confidential information is given as a gift. As a result, Salman was found guilty of insider trading.

Considering Precedent

The United States Court of Appeals for the Second Circuit in New York overturned the insider trading convictions of two hedge fund managers, Todd Newman and Anthony Chiasson, in 2014, ruling that an insider can only be convicted if the misappropriated information resulted in a significant personal advantage. When Bassam Salam appealed his 2013 conviction, citing the Second Circuit’s ruling as precedent, the United States Court of Appeals for the Ninth Circuit in San Francisco refused to follow the Second Circuit’s precedent, which it was not required to uphold. The Appeals Court upheld Salman’s conviction.

As previously stated, Salman filed an appeal with the United States Supreme Court, claiming that the Second Circuit’s decision was inconsistent with the Supreme Court precedent established by Dirks v. SEC and that the Appeals Court had thereby violated the concept of stare decisis.

The Supreme Court, however, disagreed and maintained the conviction. Salman’s conduct falls well within the purview of Dirks’ rule on gifts,” stated Justice Alito.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 9th April, 2024.