A case goes to federal court in one of three situations: the lawsuit is based on federal law, the parties live in different states and more than $75,000 is in dispute, or a federal statute gives federal courts exclusive authority over that kind of case. Federal courts hear a small slice of American litigation because their reach is limited to those categories. State courts handle almost everything else. Which category applies determines whether you end up in federal court by filing there, by your opponent moving the case there, or because no other court can take it.
Cases Based on Federal Law
The clearest path into federal court is a claim built on federal law. Under 28 U.S.C. 1331, federal district courts can hear any civil case “arising under the Constitution, laws, or treaties of the United States.”1Office of the Law Revision Counsel. 28 USC 1331 – Federal Question The federal issue has to appear in the plaintiff’s own complaint, not as a defense the other side plans to raise.
Typical examples include employment discrimination suits under Title VII, patent infringement actions, antitrust claims, securities fraud, federal civil rights cases, and disputes with federal agencies. The test is whether the legal right you are asserting was created by federal law. A contract dispute governed by state law does not become a federal question just because the parties do business across state lines.
Parties From Different States and Over $75,000
A case can also reach federal court without any federal law at stake, if the parties are from different states and enough money is involved. This is diversity jurisdiction, and 28 U.S.C. 1332 sets two strict requirements.2Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
The first is complete diversity of citizenship. No plaintiff can share a home state with any defendant. If you live in Ohio and sue someone from Texas, diversity exists. Add a second defendant who also lives in Ohio and diversity is destroyed, closing this route to federal court. Corporations count twice over: a company is a citizen of both the state where it is incorporated and the state where it has its principal place of business.2Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
The second requirement is that the amount in controversy must exceed $75,000, not counting interest and costs. That threshold has stood unchanged for decades. It is measured by what the plaintiff claims, not by what they recover. If a court later decides the case was never realistically worth more than $75,000, it can deny the winning plaintiff their costs or even impose costs against them.2Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
Diversity jurisdiction exists to protect out-of-state parties from hometown bias in state courts. The underlying dispute is still usually governed by state law, so the federal judge applies the substantive law of the relevant state. A federal judge in Atlanta hearing a Georgia contract case between a Georgia plaintiff and a California defendant applies Georgia contract law.
Class Actions
Class actions follow a looser version of the diversity rules. The Class Action Fairness Act, found in 28 U.S.C. 1332(d), changes the usual requirements in three ways.2Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs Only minimal diversity is required: one class member being a citizen of a different state from any defendant is enough. The combined claims of all class members must exceed $5 million, though individual claims can be far smaller. And the class must have at least 100 members.
These relaxed rules make it easier for defendants to move large class actions into federal court. Congress designed the statute that way, reasoning that multistate class actions affecting thousands of people fit federal oversight better than any single state court.
Cases Only Federal Courts Can Hear
Some cases carry exclusive federal jurisdiction. State courts cannot touch them.
All bankruptcy cases must be filed in federal court. Under 28 U.S.C. 1334, district courts have “original and exclusive jurisdiction” over cases arising under the federal bankruptcy code, and over the debtor’s property once a case begins.3Office of the Law Revision Counsel. 28 USC 1334 – Bankruptcy Cases and Proceedings Specialized bankruptcy judges within the federal system handle them.
Patent and copyright cases also belong exclusively in federal court. Under 28 U.S.C. 1338, no state court can hear a claim arising under federal patent, copyright, or plant variety protection laws.4Office of the Law Revision Counsel. 28 USC 1338 – Patents, Plant Variety Protection, Copyrights and Trademarks Trademark cases work differently: federal courts have original jurisdiction, but state courts can also hear trademark disputes, especially those based on state trademark law.
Federal Criminal Cases
A criminal case lands in federal court when the charge is for violating a federal statute. Most federal crimes sit in Title 18 of the United States Code, though criminal provisions appear across other titles too. Drug offenses, for example, largely fall under Title 21.
Federal criminal jurisdiction tends to cover crimes that cross state lines, like drug trafficking and interstate fraud; crimes committed on federal property, including military installations and national parks; and crimes aimed at federal interests, such as counterfeiting U.S. currency, tax evasion, mail fraud, and bank robbery.
Federal courts also prosecute civil rights violations under statutes like 18 U.S.C. 241 and 242. Section 241 covers conspiracies to interfere with constitutional rights, and Section 242 targets government officials who deprive people of their rights while acting in an official capacity.5Office of the Law Revision Counsel. 18 USC 241 – Conspiracy Against Rights6Office of the Law Revision Counsel. 18 USC 242 – Deprivation of Rights Under Color of Law Both can carry fines and imprisonment up to life sentences, or the death penalty if the violation results in a killing.
When One Act Draws Both State and Federal Charges
A single act can violate both state and federal law, and the Constitution lets both governments prosecute it. This is the dual sovereignty doctrine. The Supreme Court upheld it in United States v. Lanza (1922) and reaffirmed it in Gamble v. United States (2019), reasoning that because state and federal governments are separate sovereigns with separate laws, a violation of each law is a separate offense.7Law.Cornell.Edu. Dual Sovereignty Doctrine Federal prosecutors often step in when state charges seem insufficient, when the crime has national significance, or when local prosecution is unreliable.
State Law Claims That Travel With the Federal Case
Lawsuits rarely fit cleanly into a single legal box. A plaintiff suing under a federal employment statute may also have related claims under state law. Supplemental jurisdiction, from 28 U.S.C. 1367, lets the federal court hear those state-law claims alongside the federal ones, as long as they arise from the same set of facts.8Office of the Law Revision Counsel. 28 USC 1367 – Supplemental Jurisdiction Without this rule, a plaintiff would have to split the same dispute between two courthouses.
The rule has limits. When a case is in federal court only because of diversity, supplemental jurisdiction cannot be used to bring in additional plaintiffs or defendants whose presence would destroy complete diversity. Federal judges can also decline supplemental jurisdiction over state-law claims if those claims involve complex state-law issues, dominate the case, or outlast an early dismissal of the federal claims.8Office of the Law Revision Counsel. 28 USC 1367 – Supplemental Jurisdiction Dropped claims go back to state court.
When a Defendant Moves a Case From State to Federal Court
A case that qualifies for federal jurisdiction does not always start there. A plaintiff can file in state court even when a federal court could hear the dispute. The defendant can then transfer it through a process called removal, governed by 28 U.S.C. 1441.9Office of the Law Revision Counsel. 28 USC 1441 – Removal of Civil Actions Only defendants can remove. Plaintiffs made their choice when they filed.
Removal works only if the case could have been filed in federal court originally, meaning it has to satisfy either federal question or diversity jurisdiction. The defendant files a notice of removal in the federal district court covering the area where the state case is pending, within 30 days of receiving the complaint or summons.10Office of the Law Revision Counsel. 28 USC 1446 – Procedure for Removal of Civil Actions Once the state court and other parties are notified, the state court loses authority over the case.
The Forum Defendant Rule
Diversity-based removal comes with an important exception. If any properly served defendant is a citizen of the state where the lawsuit was filed, the case cannot be removed on diversity grounds.9Office of the Law Revision Counsel. 28 USC 1441 – Removal of Civil Actions The reasoning tracks the point of diversity jurisdiction: a local defendant does not need protection from hometown bias in its own state. This blocks only diversity-based removal. A local defendant can still remove a case that involves a federal question.
The One-Year Limit on Diversity Removal
Diversity removal also has a hard outer deadline. A case cannot be removed on diversity grounds more than one year after it was filed in state court.10Office of the Law Revision Counsel. 28 USC 1446 – Procedure for Removal of Civil Actions One exception applies: if the plaintiff deliberately concealed the true amount in controversy to run out the clock, that bad faith overrides the one-year limit. Some plaintiffs keep their damages figures vague early in a case for exactly this reason, and courts know the tactic.
Getting a Removed Case Sent Back
If a defendant removes your case and you think it does not belong in federal court, you can file a motion to remand. Which deadline applies depends on the reason.
Procedural defects, like a late removal notice or missing consent from co-defendants, have to be raised within 30 days of the notice of removal. Miss that window and the objection is waived. Lack of subject matter jurisdiction has no deadline. If the federal court simply does not have authority over the case, it must send the case back at any point before final judgment, even if no one raises the issue.11Office of the Law Revision Counsel. 28 USC 1447 – Procedure After Removal Generally
A plaintiff can also undermine federal jurisdiction after removal by adding a new defendant from the same state. If that addition destroys diversity, the court has discretion to allow it and send the whole case back. Courts weigh whether the new party has a legitimate connection to the dispute before permitting the move.
What It Costs to File
Filing a civil case in federal court costs $350 under 28 U.S.C. 1914, with an administrative fee typically added by the Judicial Conference.12Office of the Law Revision Counsel. 28 USC 1914 – District Court; Filing and Miscellaneous Fees The same statutory fee applies whether you are filing an original case or removing one from state court. A plaintiff who cannot afford the fee can apply to proceed in forma pauperis, which waives or reduces the cost.