Academy/How the U.S. Legal System Works/The Court System Explained
Lesson 2 of 4

The Court System Explained

The Court System Explained

The American court system operates on two parallel tracks: federal courts and state courts. Understanding which court hears which case is essential to navigating the legal system.

Federal Courts

Federal courts handle cases involving:

  • Federal statutes and regulations
  • The U.S. Constitution
  • Disputes between states
  • Cases involving diversity of citizenship (parties from different states with claims over $75,000)
  • The federal system has three tiers:

    1. U.S. District Courts — trial courts where cases begin

    2. U.S. Courts of Appeals — 13 circuit courts that review district court decisions

    3. U.S. Supreme Court — the final arbiter, hearing roughly 70–80 cases per year

    State Courts

    State courts handle the vast majority of legal disputes, including:

  • Criminal cases under state law (theft, assault, murder)
  • Family law matters (divorce, custody)
  • Contract disputes and personal injury claims
  • Traffic violations and small claims
  • Most states have trial courts of general jurisdiction, intermediate appellate courts, and a supreme court (though naming varies by state).

    Jurisdiction and Venue

    Jurisdiction refers to a court's authority to hear a case. Subject-matter jurisdiction determines what types of cases a court can hear, while personal jurisdiction determines which parties the court has authority over. Venue refers to the geographic location where a case should be tried.

    The Role of Precedent

    Under the doctrine of stare decisis, courts follow prior decisions on similar issues. Supreme Court rulings bind all lower courts. This creates consistency and predictability in the law.

    Quiz: The Court System Explained

    Question 1 of 3

    What is the minimum amount in controversy for federal diversity jurisdiction?