It should be understood that binding precedent is not authorized or required by the Constitution, and indeed may be inconsistent with it being the supreme law. It is entirely prudential, for convenience of the court, and "public policy", not law.
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3. 1. 3. Formulation of federal precedent
Unlike the states, there is no plenary reception statute at the federal
level that continued the common law and thereby granted federal courts
the power to formulate legal precedent like their English predecessors.
Federal courts are solely creatures of the federal Constitution and the
federal Judiciary Acts.  However, it is universally accepted that
the Founding Fathers of the United States, by vesting "judicial power"
into the Supreme Court and the inferior federal courts in Article Three
of the United States Constitution, thereby vested in them the implied
judicial power of common law courts to formulate persuasive precedent;
this power was widely accepted, understood, and recognized by the
Founding Fathers at the time the Constitution was ratified.  Several
legal scholars have argued that the federal judicial power to decide
"cases or controversies" necessarily includes the power to decide the
precedential effect of those cases and controversies. 
The difficult question is whether federal judicial power extends to
formulating binding precedent through strict adherence to the rule of
stare decisis. This is where the act of deciding a case becomes a
limited form of lawmaking in itself, in that an appellate court's
rulings will thereby bind itself and lower courts in future cases (and
therefore also impliedly binds all persons within the court's
jurisdiction). Prior to a major change to federal court rules in 2007,
about one-fifth of federal appellate cases were published and thereby
became binding precedents, while the rest were unpublished and bound
only the parties to each case. 
As Judge Alex Kozinski has explained, binding precedent as we know it
today simply did not exist at the time the Constitution was framed. 
Judicial decisions were not consistently, accurately, and faithfully
reported on both sides of the Atlantic (reporters often simply rewrote
or failed to publish decisions which they disliked), and the United
Kingdom lacked a coherent court hierarchy prior to the end of the 19th
century.  Furthermore, English judges in the eighteenth century
subscribed to now-obsolete natural law theories of law, by which law was
believed to have an existence independent of what individual judges
said. They saw themselves as merely declaring the law which had always
theoretically existed, not making it.  Therefore, a judge could
reject another judge's opinion as simply an incorrect statement of the
law, like how scientists regularly reject each other's conclusions as
incorrect statements of the laws of science. 
The contemporary rule of binding precedent became possible in the U.S.
in the nineteenth century only after the creation of a clear court
hierarchy (under the Judiciary Acts), and the beginning of regular
verbatim publication of U.S. appellate decisions by West Publishing.
 It gradually developed case-by-case as an extension of the
judiciary's public policy of effective judicial administration (that is,
in order to efficiently exercise the judicial power).  It is
generally justified today as a matter of public policy, first, as a
matter of fundamental fairness, and second, that in the absence of case
law, it would be completely unworkable for every minor issue in every
legal case to be briefed, argued, and decided from first principles
(such as relevant statutes, constitutional provisions, and underlying
public policies), which in turn would create hopeless inefficiency,
instability, and unpredictability, and thereby undermine the rule of
law.  
 Hart v. Massanari, 266 F.3d 1155 (9th Cir. 2001), citing Anastasoff
v. United States, 223 F.3d 898, vacated as moot on reh'g en banc, 235
F.3d 1054 (8th Cir. 2000).
 Michael J. Gerhardt, The Power of Precedent (New York: Oxford
University Press, 2008), 59.
 Daniel A. Farber and Suzanna Sherry, Judgment Calls: Principle and
Politics in Constitutional Law (New York: Oxford University Press,
 Frederick Schauer, Precedent, 39 Stan. L. Rev. 571, 595-602 (1987).
Also see How stare decisis Subverts the Law, especially the
law review articles linked from it.
Constitutional education, history, commentary, reform, compliance, and interpretation.
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