Article III of the United States Constitution establishes the judicial power of the federal government. Under the Constitution, the authority of the federal judiciary extends only to certain “cases” and “controversies,” which are identified by either the nature of the suit or the parties involved. The Constitution establishes the Supreme Court of the United States and permits Congress to establish “inferior” federal courts. The federal judiciary currently consists of the Supreme Court, courts of appeals in 12 regional judicial circuits, two intermediate appellate courts with special power to hear cases originating nationwide, a total of 94 judicial districts throughout the 50 states that contain at least one federal district court and one bankruptcy court, territorial courts that function as district courts in several territories, and specialized tribunals that have been established by Congress pursuant to power provided in Article I of the Constitution. The district courts serve as the trial courts in the federal system, while the courts of appeals serve as intermediate appellate courts.
The power or authority of a court to hear and decide a case or controversy is called the jurisdiction of the court. Jurisdiction may be divided into two broad categories: subject-matter jurisdiction and personal jurisdiction. Subject-matter jurisdiction refers to the authority of a court to hear a certain type of case, while personal jurisdiction refers to the power with which a court may bind an individual party. Most cases and controversies that can be heard by the federal judiciary consist of the following:
- Cases governed by federal law, such as the federal Constitution, federal statutory provisions, or federal regulations (federal question jurisdiction)
- Suits between citizens of different states (diversity jurisdiction)
- Suits between a citizen of a state and a citizen of a foreign country
- Admiralty and maritime cases
- Suits in which the United States is a party
- Suits between two states
The United States operates with a dual system of courts: the federal judiciary and the judicial systems of the states. If a party brings an action in a state court, but a federal court has jurisdiction to hear the case, the defendant may choose to “remove” the case to the federal court, subject to several limitations set forth in Title 28 of the United States Code. The defendant is not obligated to remove such a case, and questions about whether removal is proper in a particular case are often subjects of controversy in federal courts. In a case where a federal court permits a state court case to be removed but later determines that removal was improper, the federal court will remand the case to the state court.