To Say What the Law Is: Rules, Results, and the Dangers of Inferential Stare Decisis

Abstract

Does stare decisis require future courts to follow the rules stated in a precedent-setting opinion? Or must future courts merely reconcile their decisions with the ultimate result of the precedent-setting case? It is widely assumed that a rule-based approach puts greater constraints on future courts, but two recent Supreme Court decisions – Wal-Mart Stores, Inc. v. Dukes and Ashcroft v. Iqbal – turn this conventional wisdom on its head. In both cases, what the Court said about the governing rules was not inherently controversial, and would leave courts with considerable flexibility going forward. But what the Court did in applying those rules – the ultimate results in Wal-Mart and Iqbal – could be very destabilizing if stare decisis mandates consistency with those results in future cases.

This article argues that the lawmaking content of a judicial decision should be only the rules that the court states in deciding the case. To infer binding obligations from results alone creates a risk that – as with Wal-Mart and Iqbal – future courts will be forced to intuit more radical legal changes than the precedent-setting court actually embraced. Put simply, a judicial decision should create binding law only to the extent that it says what the law is. Unless and until new legal rules are declared (whether by the judiciary in later cases or by legislation), courts should be free to operate within the existing legal framework, without being required to reconcile their decisions with the mere results of earlier ones.

Keywords: stare decisis, precedent, Wal-Mart, Iqbal, class actions, pleading, judicial lawmaking

JEL Classification: K00, K10, K40, K41