What is subject-matter jurisdiction and how is it established in federal courts?

• A. The court's power to hear the type of dispute; established by federal question jurisdiction or diversity jurisdiction.
• B. The court's power to hear any case; determined by venue rules.
• C. The court's power to issue only injunctions; set by statute.
• D. The court's power to hear criminal matters; only state statutes.

Answer: (A)

Subject-matter jurisdiction is the court’s authority to hear the type of dispute before it. In federal courts this power comes from two main sources: federal-question jurisdiction and diversity jurisdiction. Federal-question jurisdiction exists when the claim arises under the Constitution, federal laws, or treaties, so the case can be heard in federal court regardless of the parties’ citizenship. Diversity jurisdiction exists when the parties are citizens of different states (complete diversity) and the amount in controversy exceeds the statutory threshold (currently $75,000), which allows a federal court to hear cases between citizens of different states.

Venue, by contrast, is about the proper location or forum for the case within the federal system; it does not by itself create subject-matter jurisdiction. The other statements either misstate the nature of jurisdiction (limiting it to injunctions, or tying it to state statutes) or confuse jurisdiction with venue or criminal matters.