It's worth noting that the decision — by a three-judge panel of the appellate court — is only an interim decision.

In essence, the trial court took a shortcut — in software terms, an early return or -exit: The trial judge concluded that, when Colorado's secretary of state removed a member of the Colorado delegation to the Electoral College (for having voted for Kasich instead of Clinton), the removed "elector" had no legal right to sue for nominal damages because the Colorado secretary of state had the legal authority to remove the elector. The trial judge therefore summarily tossed out the removed elector's lawsuit.

The appellate court panel concluded that the trial judge got the law wrong, and therefore the removed elector did have the right to sue for nominal damages. The panel sent the case back to the trial court so that the lawsuit could (in theory) proceed normally.

The state has the right to appeal further, to the entire appellate court sitting "en banc" and/or to the Supreme Court.

Here are some excerpts from the three-judge appellate panel's opinion (which I find compelling, incidentally):

"[T]he Supremacy Clause is broader than preemption; it immunizes all federal functions from limitations or control by the states." Slip op. at 75 (citation omitted).

"Unlike the President appointing subordinates in the executive department, states appointing presidential electors are not selecting inferior state officials to assist in carrying out a function for which the state is ultimately responsible. Presidential electors exercise a federal function—not a state function—when casting their ballots. Burroughs, 290 U.S. at 545. When undertaking that federal function, presidential electors are not executing their appointing power's function but their own." Id. at 82-83.

"As the text and structure show, the Twelfth Amendment allows no room for the states to interfere with the electors’ exercise of their federal functions." Id. at 86.

"Dictionaries from the relevant period support Mr. Baca’s contention that the drafters of the Twelfth Amendment intended electors to exercise discretion in casting their votes for President and Vice President." Id. at 88.

"As these sources reflect, the definitions of elector, vote, and ballot have a common theme: they all imply the right to make a choice or voice an individual opinion. We therefore agree with Mr. Baca that the use of these terms supports a determination that the electors, once appointed, are free to vote as they choose." Id. at 90 (footnote omitted).

"In summary, the text of the Constitution makes clear that states do not have the constitutional authority to interfere with presidential electors who exercise their constitutional right to vote for the President and Vice President candidates of their choice." Id. at 93.

"Although we concur with [Colorado's] review of historical practice [of elector pledges], we cannot agree that these practices dictate the result the Department seeks. First, and most importantly, the practices employed—even over a long period—cannot overcome the allocation of power in the Constitution. McPherson, 146 U.S. at 35–36. Second, there is an opposing historical practice at play: a history of anomalous votes, all of which have been counted by Congress." Id. at 99. "This uninterrupted history of Congress counting every anomalous vote cast by an elector weighs against a conclusion that historical practices allow states to enforce elector pledges by removing faithless electors from office and nullifying their votes." Id. at 101.

[0] https://www.ca10.uscourts.gov/opinions/18/18-1173.pdf