The power of a court over the nature of a case and the type of remedy demanded.
A court must have jurisdiction to enter a valid, enforceable judgment on a claim. Jurisdiction may be broken down into two categories: personal jurisdiction and subject matter jurisdiction. Personal jurisdiction is the constitutional requirement that a defendant have certain minimum contacts with the forum in which the court sits so that the court may exercise power over the defendant. Subject-matter jurisdiction is the requirement that the court have power to hear the specific kind of claim that is brought to that court. While the parties may waive personal jurisdiction and submit to the authority of the court, the parties may not waive subject-matter jurisdiction. In fact, the court may dismiss the case sua sponte—or, on its own—for lack of subject-matter jurisdiction. See, e.g., Fed. R. Civ. Proc. 12(b)(1). The requirement that a court have subject-matter jurisdiction means that the court can only assume power over a claim that the laws of the jurisdiction authorize it to hear. For example, Congress limited the subject-matter jurisdiction of the United States Tax Court to cases related to taxation; thus, that court does not have subject-matter jurisdiction over any other matter. Most state courts are courts of general jurisdiction. That is, state courts are presumed to have power to hear virtually any claim arising under federal or state law, except those falling under the exclusive jurisdiction of the federal courts. However, some states deny subject matter jurisdiction to specific claims, such as those arising in other states. In addition to courts of general jurisdiction, most states also maintain specialized courts of limited subject-matter jurisdiction. Examples of these types of courts include probate courts, traffic courts, juvenile courts, and small claims courts. As opposed to state courts of general jurisdiction, federal courts are courts of limited jurisdiction. Thus, with few exceptions found in the Constitution itself, Congress defines the subject-matter jurisdiction of the federal courts. In order to bring an action in federal court, the plaintiff must find a constitutional or congressional grant of subject-matter jurisdiction to allow the federal court to hear the claim. See U.S. Const. Art. III, Sec. 2. As a general rule, courts read congressional grants of subject-matter jurisdiction narrowly, resolving any ambiguities in favor of denying jurisdiction.
The two primary sources of the subject-matter jurisdiction of the federal courts are diversity jurisdiction and federal question jurisdiction. Diversity jurisdiction generally permits individuals to bring claims in federal court where the claim exceeds $75,000 and the parties are citizens of different states. See 28 U.S.C. § 1332. So, if a citizen of New York sues a citizen of California for more than $75,000, a federal court would have subject-matter jurisdiction to hear that claim. Under federal question jurisdiction, a litigant—regardless of the value of the claim—may bring a claim in federal court if it arises under federal law, including the U.S. Constitution. See 28 U.S.C. § 1331.