(Latin: "Reason for being decided.") A statement made in an opinion of the court is either ratio decidendi or obiter dictum. Ratio decidendi refers to a statement that is a necessary part of the chain of reasoning leading to the decision of the case, while obiter dictum ("said by the way") refers to any other statement in the opinion. The distinction is clear in theory but, in practice, may be difficult to apply to any given case.
No federal court may properly pass on a legal or constitutional question that is not brought before it in a case or controversy, and a court properly resolves only those questions necessary to decide a case before it. The resolution of a particular question is the court's holding on that question, and the reasoning necessary to the resolution of a question properly before the court is ratio decidendi. The ratio decidendi is thereafter binding as a rule of law when the case is cited as precedent. Although a judge may have a clear idea of what arguments were necessary to reach the decision in a case and may attempt to convey that idea in his opinion, it is the courts that apply the case as precedent in future decisions that finally establish which statements were obiter dicta and which ratio decidendi.
Dennis J. Mahoney