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I agree that appellate courts have a role in making law. Trial judges often avoid making law, leaving the decisions to appellate courts. This is just part of the judicial system and perfectly normal. The appeals process process is designed to give defendants another option than the one trial.
I guess it depends on your definition of "making laws". Constitutionally, the courts are charged with interpreting the law, and serving as a check and balance against unconstitutional action by the President or Congress, so they certainly do influence the law and how it can be enforced, but I don't know if I would go so far as to say they make the law.
Today's health care reform ruling is a great example, in that they did not overturn the entire law, only the mandate to purchase health insurance. That is, they interpreted the law and ruled a portion of it unconstitutional, and of course, more appeals are to come, probably to the Supreme Court. The law itself was, and should be, made by Congress.
Many times, when someone refers to a judge or court making the laws, it is being said in a derogatory sense, legislating from the bench, or being an "activist judge".
Appellate courts will always have a role in making law whether anyone likes it or not. In addition, it is a good thing that appellate courts such as the Supreme Court have the power to participate in the making of law. I will use something from today's news to illustrate.
A federal court in Virginia has just ruled that the health care reform passed by Congress this year is unconstitutional. By doing so, the court has (if it is upheld) changed the law. It has changed the law on health care and it has changed the law regarding what the federal government can and cannot do under the Commerce Clause.
This is a good thing, no matter what you think of health care reform. If courts have no place in making law, who would ensure that laws do not run afoul of the Constitution? We would have to entrust this to Congress and the president. This would be bad because both of these are politically motivated and tend to be out for partisan gain.
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