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In many countries, the legal system is divided into two basic court systems—federal and state. The jurisdiction of federal courts will vary from one country to another. In the United States, federal courts are not courts of general jurisdiction, meaning only certain types of cases or issues may be filed in a federal lawsuit. In the United States, federal District Courts may only hear cases where diversity of citizenship is present or there is a federal question.
The United States federal court system is comprised of specialized courts that only hear particular issues, such as bankruptcy court or tax court as well as trial level courts known as District Courts that hear general lawsuits and criminal matters. Above the District Court level are the Courts of Appeal and finally the United States Supreme Court. A federal lawsuit must be filed at the trial level in one of the many District Courts found throughout the states.
The first type of case that may be filed as a federal lawsuit is a case in which diversity of citizenship is present. In order for a civil dispute of this nature to be filed in federal court, the parties must be citizens of different states. There is also a minimum dollar amount that must be in controversy for this type of federal lawsuit. As of 2011, the amount in controversy must exceed $75,000; however, the minimum dollar amount changes to reflect the rate of inflation over the years. Many lawsuits where the defendant is a business or corporation are filed in federal court under the diversity rule.
The other type of lawsuits that may qualify to be filed in federal court are lawsuits that have a federal question at the heart of the lawsuit. Lawsuits between two or more states and lawsuits involving ambassadors or government officials are examples of cases filed in federal court under the federal question rule. In addition, intellectual property lawsuits, antitrust, admiralty, and securities lawsuits must all be filed as federal lawsuits in a federal District Court.
Within the United States legal system, the federal courts generally apply federal law to the cases that come before the courts. Although all law in the United States is decided under the umbrella of the U.S. Constitution, the states have a certain amount of autonomy to makes laws as long as the laws do not violate the Constitution. The exception to the general rule that a federal lawsuit will be decided on the basis of federal law is when the lawsuit is a diversity case. A diversity case may actually be founded on an alleged violation of state law, in which case the federal court must apply state law when making its decision.