Throughout the United States there are two judicial systems. One system consists of state and local courts established under the authority of the state governments. The other is the Supreme Court and the federal court system, created by Congress under the authority of the Constitution of the United States.
"The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish."
- Article III, U.S. Constitution
The state courts have general, unlimited power to decide nearly every type of case, subject only to the limitations of the U.S. Constitution, their own state constitutions, and state law. The state and local courts are located in virtually every town and county and are the courts with which citizens most often have contact. These courts handle most criminal matters and the great bulk of legal business concerning probate of estates, marital disputes, dealings in land, commercial contracts, and other day-to-day matters.
The federal courts, in contrast, have power to decide only those cases over which the Constitution gives them authority. These courts are located principally in the larger cities. Only carefully selected types of cases may be heard in the federal courts.
The controversies that may be decided in the federal courts are identified in Article III, Section 2 of the Constitution. They include cases in which the United States government or one of its officers is either suing someone or being sued.
The federal courts also may decide cases for which state courts are inappropriate or might be suspected of partiality. Thus, federal courts may decide, in the language of the Constitution, "Controversies between two or more states; between a State and Citizens of another State; between Citizens of different States; [or] between Citizens of the same State claiming Lands under Grants of different States." For example, one state might be sued by another state for the pollution of its air. Since the impartiality of the courts in either state could be questioned, such a suit might be decided in a federal court.
Similarly, the Constitution extends the authority of the federal courts to cases affecting ambassadors, consuls, and other public ministers. The U.S. government also has constitutional responsibility for U.S. relations with other nations. Because cases involving other nations' representatives or citizens may affect U.S. foreign relations, such cases are decided in the federal courts.
The Constitution provides the federal courts the power to hear cases involving the Constitution as a law, laws enacted by Congress, treaties, and laws relating to navigable waters (the sea, the Great Lakes, and most rivers) and commerce on them. The federal courts' jurisdiction also encompasses the many cases that involve or affect commerce among states.
The Constitution describes what cases may be decided in the federal courts. Congress may and has determined that some of these cases also may be tried in state courts, giving federal and state courts concurrent jurisdiction. Congress has provided that suits between citizens of different states may be heard in the federal courts or the state courts, but they may be heard in the federal courts only if the amount in controversy exceeds $75,000, exclusive of interest and costs. Congress also has provided that maritime cases and suits against consuls may be tried only in the federal courts. When a state court decides a case involving federal law, it in a sense acts as a federal court, and its decisions on federal law may be reviewed by the U.S. Supreme Court.
The federal courts hear both criminal and civil cases. Whether a particular case is one that may be decided by the federal courts or the state courts may be a highly technical matter that judges and lawyers must resolve.