Final answer:
An appellate court decision within a state establishes precedent for all lower state courts but is not binding on Federal Courts operating within the state, as they are part of an independent judicial system.
Step-by-step explanation:
When an appellate court in a state makes a decision, it becomes case precedent, which is binding on all lower courts within that state's jurisdiction. However, there are exceptions. The decision is not binding on Federal Courts hearing cases in the state, as the federal court system operates independently of the state court system. Federal courts include district courts with original jurisdiction and circuit courts with appellate jurisdiction. The U.S. Supreme Court may also hear cases on appeal from either federal or state courts when there is a substantial federal question involved. State courts generally include trial courts, appellate courts, and state supreme courts. Comprehensive reliance on precedents ensures consistency in legal decisions and upholds the legitimacy of the courts.