Subject Matter Jurisdiction: Should I File in Federal or State Court?

You want to file a lawsuit, but you're not sure whether it belongs in federal court or in state court. How do you decide?

The answer starts—but doesn't necessarily end—with a legal concept called "subject matter jurisdiction." Don't get hung up on the legalese. When you see the phrase "subject matter jurisdiction," think "authority to hear a case." In other words, subject matter jurisdiction asks: What court is authorized to hear this kind of lawsuit?

In general, there are three possible answers to that question.

• A federal court must hear the case. Congress has given federal courts exclusive subject matter jurisdiction—exclusive authority—over a few kinds of cases. If yours is one of these, you must file in federal court.
• A state court must hear the case. State courts have exclusive jurisdiction over some state law cases. For example, suppose you want to get a divorce. State court is your only option.
• A federal court or a state court can hear the case. For everything else, federal and state courts share subject matter jurisdiction. Judges and lawyers call this "concurrent jurisdiction." In a case like this, you can choose between federal and state court. Decide which one gives you the best chance of winning and file there. As we mention below, the defendant (the party you're suing) might have something to say about where a case like this case ends up.

Let's walk through the analysis to figure out where you should file.

When to File in Federal Court

Federal courts have "limited" subject matter jurisdiction. This means you file in federal court only if there's a statute that says you may or must file there. Where do you find these federal subject matter jurisdiction statutes? Generally speaking, in 28 U.S.C. §§ 1330-1369 (2025).

Cases Federal Courts May Hear

Federal courts are authorized to hear any case involving:

• a federal question, meaning a legal issue arising under the Constitution, a federal statute, or a treaty, (28 U.S.C. § 1331 (2025)), or
• diversity of citizenship, when no plaintiff is from the same state as any defendant and the dispute involves more than $75,000. (28 U.S.C. § 1332 (2025).)

More about federal question cases. In a federal question case, the controlling issue is whether at least one claim arises under federal law. If so, some federal court has authority to hear the case.

What if the case also involves state law claims? Can a federal court hear them as well, or is it limited to deciding only the federal law issues? As a general rule, yes, a federal court can exercise "supplemental jurisdiction" over state law claims that arise out of the same operative facts as those under federal law. (28 U.S.C. § 1367 (2025).)

Here are some examples of federal question cases.

• You own a small business. Several of your competitors are large, national chains. You think they're conspiring to fix prices to drive you out of business. You're allowed to sue in federal court because your claim arises under federal antitrust laws. (15 U.S.C. § 15 (2025).)
• Your employer fires you because you wore a head covering to work, as required by your religion. You have a possible discrimination claim under 42 U.S.C. § 2000e-2 (2025), one that can be heard in federal court.
• Assume the same facts as our last example, except that you also want to sue under your state's antidiscrimination law. Can the federal court decide your state law claim, too? Yes. Because both claims stem from the same common facts, a federal court can hear both of them.

More about diversity of citizenship cases. The key to diversity of citizenship is that no party on the plaintiff side of the case can be a citizen of the same state as any party on the defendant side of the case. If that requirement is satisfied and the parties are fighting over more than $75,000, chances are a federal court can hear the case.

A federal question isn't necessary for a diversity case. Stated a bit differently, when diversity of citizenship is your ticket to federal court, the subject matter of the lawsuit probably doesn't matter. A federal court can hear diversity cases involving only questions of state law, like those involved in car wrecks, slip and fall claims, and medical malpractice lawsuits.

When deciding if diversity exists, these rules apply:

• a person can only be a citizen of one state—probably the state where they're a full-time resident
• a corporation is a citizen of the state where it's incorporated and, if different, of the state where it has its principal place of business, and
• a partnership or limited liability company (LLC) is a citizen of each state where any partner or member is a citizen.

For example, assume the plaintiffs are Doe and Roe, both natural persons. Doe is a Montana citizen, while Roe is a citizen of California. They want to file a $1 million breach of contract lawsuit against Smith, an individual who's a citizen of Arizona, and Blurfco, an LLC with members living in Arizona, Texas, and Oklahoma.

Can they sue in federal court? Yes. No plaintiff is a citizen of any state where a defendant is also a citizen. The case involves potential damages of $1 million, far exceeding the $75,000 damage threshold. A federal court can hear the case.

Now, let's change the facts. Assume that Blurfco has members living in California, Arizona, and Texas. Is a federal case still possible? No. The facts tell us nothing about any federal question. And on these facts, diversity is absent: Plaintiff Roe is a California citizen. So is a Blurfco member, meaning Blurfco is a California citizen, too. With no federal question and no diversity of citizenship, state court is the only option.

Cases Federal Courts Must Hear

To this point, we've covered situations when a federal court has subject matter jurisdiction and may hear a case. But saying a federal court may hear a case doesn't mean a federal court must hear the case.

Congress has decided that a relatively small group of cases must be heard in federal court. When Congress has given federal courts this "exclusive" subject matter jurisdiction over a type of case, you have no choice but to file there. Here are a few examples:

• disputes arising on or affecting the navigable waters of the United States, called "admiralty and maritime" claims (28 U.S.C. § 1333 (2025))
• cases under federal bankruptcy law (28 U.S.C. § 1334 (2025)), and
• claims involving patents and copyrights (28 U.S.C § 1338 (2025).)

What happens if you file a case in state court that can only be filed in federal court? The state court will dismiss the suit, or the defendant will "remove" (transfer) it to a federal court. (See, for example, 28 U.S.C. § 1454 (2025) (removal of patent and copyright cases filed in state court).)

The same rules regarding supplemental jurisdiction over state law claims (discussed above) apply in cases when federal courts have exclusive subject matter jurisdiction.

When to File in State Court

State courts are sometimes called courts of "general" subject matter jurisdiction. Unless you find a law or court rule saying you must file in federal court, you can—and in some cases you must—start your lawsuit in state court.

Cases State Courts May Hear

State courts are authorized to hear suits involving questions under state statutes and state common law. Statutory claims might include, for instance, those arising under state antidiscrimination or consumer protection laws. Typical common law claims involve:

• negligence of all kinds, like driving carelessly, failure to keep property safe, making and selling dangerous products, and medical malpractice
• intentionally caused injuries like assault and battery, false imprisonment, and fraud, and
• breach of contract.

In addition, state courts can—and sometimes they must—decide cases involving federal law.

Cases State Courts Must Hear

Recall from our earlier discussion that in a federal diversity of citizenship case, the subject matter of the lawsuit usually doesn't matter. The key word there is "usually." There are some cases federal courts technically are allowed to hear, but that they choose to decline. An example will illustrate.

John and Joan are a married couple. Their marital residence is in Nevada. Two years ago, they separated. They've now decided to divorce. The marital estate—the property and assets the divorce court will have to divide—is worth $10 million. After the couple separated, John moved to New Mexico.

Divorce and family law cases have traditionally been decided by state courts. But notice the facts in our example. John and Joan now are citizens of different states, and the amount in dispute is $10 million. On the face of it, this case satisfies the requirements for a federal diversity of citizenship lawsuit. Will a federal court hear their divorce action?

No. Out of respect for state courts, federal courts refuse to hear some state law cases they might otherwise be authorized to decide. Those include cases involving:

• divorce and child custody
• family law matters
• guardianships and conservatorships, and
• probate and related property descent and distribution questions.

In these cases, you must file in state court.

When Federal and State Courts Share Subject Matter Jurisdiction

In all diversity of citizenship cases and nearly all federal question cases, federal and state courts share subject matter jurisdiction. Stated more succinctly, most lawsuits that can be filed in federal court also can be filed in state court.

If you're a plaintiff and you have the choice, where should you file? Lawyers use the term "forum shopping" to describe the process of deciding which court is best for a case. Here are some of the factors that might play a role in your decision.

• Courthouse proximity. Which courthouse is closer to your home or work? For example, you might prefer state court simply because the nearest federal court is 100 miles away.
• Court rules and procedures. All courts, federal and state, have rules of procedure that the parties and their lawyers must follow. Some lawyers prefer state rules and procedures, while others prefer those in federal courts. As a general (though not universal) rule, federal rules and procedures are likely to be more demanding and time consuming than those in state courts.
• Differences in juries. State and federal courts often have different boundaries for jury selection purposes. Chances are that federal courts will pull potential jurors from a wider geographic region than state courts. You can use this difference to your advantage, considering which areas are more likely to include jurors who will be sympathetic to your side of the case.

Six-Step Federal vs. State Court Decision-Making Tool

Let's return to our opening question: If you're not sure whether your case belongs in federal or state court, how do you decide? Here's a six-step tool you can use to help you work through the analysis.

Step 1: Does the case involve a question of federal law? If yes, skip to Step 3. If no, continue to Step 2.

Step 2: Is there diversity of citizenship, and does the case involve more than $75,000? If yes to both, continue to Step 3. If no to one or both, skip to Step 6.

Step 3: A federal court has the authority to hear your case. Does the case involve an issue Congress has said federal courts must resolve? If yes, you must file your lawsuit in federal court. If no, continue to Step 4.

Step 4: Is this a diversity of citizenship case involving a question of state law (for example, probate or family law) that federal courts decline to hear? If yes, skip to Step 6. If no, continue to Step 5.

Step 5: You can choose to file in either federal court or state court. Review the factors discussed above, and consider speaking to an attorney to analyze your options and the best course of action.

Step 6: You must file your lawsuit in state court.

Get Help With Your Subject Matter Jurisdiction Issue

Choosing the correct court for your lawsuit isn't just a matter of convenience. Pick the wrong venue and your case can be transferred to another court against your wishes or, worse yet, thrown out of court. While we've outlined the basic steps above, subject matter jurisdiction questions can get very ugly, very quickly.

If you're not sure where your case belongs, don't try to navigate this minefield on your own. Your best bet will be to speak with an experienced attorney who's familiar with jurisdiction questions. They can explain your options—along with the risks and benefits of each—and guide you to the best decision for your case.