Subject-matter and personal jurisdiction foundations
Jurisdiction is a court's power to hear a case and render a binding judgment. Subject-matter jurisdiction is the authority to hear a particular type of case. Federal courts have limited subject-matter jurisdiction: they can hear federal question cases (those arising under federal law or the Constitution), diversity cases (where parties are from different states and the amount exceeds 75,000 dollars), and cases involving federal agencies. State courts generally have broader subject-matter jurisdiction over most contract, tort, and family law disputes.
Personal jurisdiction is a court's power over the parties in a specific case, requiring that the defendant have sufficient contacts with the state so that maintaining the lawsuit is fair and reasonable. Jurisdiction can be based on the defendant's presence in the state when served, ownership of property in the state, conducting business in the state, or committing a tort that caused injury in the state. Internet-based businesses and contracts add complexity; courts examine whether the defendant's contacts with the state were purposeful.
Federal jurisdiction and in rem proceedings
Federal question jurisdiction allows federal courts to hear any case arising under the Constitution, federal laws, or federal treaties. A plaintiff suing under the Civil Rights Act or patent law can file in federal court. Diversity jurisdiction exists when parties are completely diverse (no plaintiff shares citizenship with any defendant) and the amount in controversy exceeds 75,000 dollars. A New York resident suing a California corporation for breach of contract can choose either state court or federal court in California or New York.
In rem jurisdiction is a court's authority over property located in the state, allowing claims affecting that property. A state court can adjudicate a dispute over land within its borders, a mortgage on state property, or an estate of a decedent domiciled in the state. Quasi in rem jurisdiction involves property seizure to satisfy a judgment but is rarely used after recent Supreme Court decisions limiting its scope. These jurisdictional bases ensure that cases are heard in courts with legitimate authority and that defendants are not unfairly sued far from their home states.