According to Article III of the federal Constitution, "The judicial power of the United States shall be vested in one Supreme Court and in such inferior courts as the Congress may, from time to time, ordain and establish." Pursuant to this constitutional power, the Congress has created numerous federal courts. At the head of the hierarchy stands the Supreme Court of the United States. The Supreme Court has original jurisdiction over all cases involving ambassadors, ministers, and consuls, and those in which a state is a party. In all other cases that can properly be brought before the Supreme Court, the court has appellate jurisdiction. Hence the principal jurisdiction of the court is appellate. It is the court of last resort for all cases involving federal law and for all cases coming to it from the inferior or lower federal courts involving questions of state law.

In 1891 Congress made provisions for intermediary courts of appeal in order to lessen the burden on the Supreme Court. These tribunals are known as the Courts of Appeals, of which there are now 13. Each Court of Appeals is assigned to a specified circuit that serves a certain number of states. Each of these courts has a minimum of three judges, who preside as a group. The jurisdiction of the Courts of Appeals is exclusively appellate. The decision of a Court of Appeals is subject to review only by the Supreme Court. For most cases, the decision of the Supreme Court to hear an appeal from a Court of Appeals, or any other court, is purely discretionary.

The federal courts of original jurisdiction for most matters are the District Courts. The country is presently divided into more than 90 judicial districts, with each state having at least one district and no district embracing territory in more than one state. There is one District Court for each judicial district, but most courts have more than one judge. The District Courts have jurisdiction over all cases arising under the federal Constitution or laws of Congress and over cases involving litigants with diversity of citizenship where the amount in dispute exceeds $10,000. For purposes of federal jurisdiction, diversity of citizenship is considered to exist whenever the litigating parties are citizens of different states in the United States or one is a citizen of the United States and the other is a citizen of a foreign country. For this purpose a corporation is considered to be a citizen of the state in which it is chartered. If the jurisdiction of the federal courts is based on diversity of citizenship, the subject matter of the dispute may be state law.

In addition to these courts of general jurisdiction, there are a number of federal courts that have jurisdiction�not always exclusive�over certain types of disputes. Among such courts are the Court of Claims, the Tax Court, the federal military courts, and the Court of Customs and Patent Appeals.

In each state, there exists�by state constitutional provision and legislative enactment�a system of judicial tribunals, which embraces various courts of original jurisdiction and one or more of appellate jurisdiction. Usually there is one court of unlimited original jurisdiction that has the power to entertain any action, regardless of the amount involved or the nature of the relief requested, although it does not ordinarily have authority over the probate of wills or administration of deceased persons� estates. This state court of general original jurisdiction usually hears cases at the county seat of the various counties in the state and is known variously as the District, Circuit, Superior, or Common Pleas Court.

States usually have several inferior (in a hierarchical sense) courts, with jurisdiction limited as to certain subject matter (for example, probate), amounts in controversy (for example, $2,000), or relief sought (for example, divorce). The inferior courts are commonly named Municipal Courts, Police Courts, Magistrate�s Courts, or Justice of the Peace Courts. There may be a separate court or a special division of a court to deal with problems of domestic relations or juvenile delinquency. In many states there is but one appellate tribunal, a court of last resort. In some, however, there is an intermediate tribunal with powers similar to those of the federal Courts of Appeals.

The name of the state court is not necessarily indicative of its place in the judicial hierarchy. In New York, for example, the general court of original jurisdiction (the trial court) is known as the Supreme Court, while the court of last resort is known as the Court of Appeals. In most states, however, the court of last resort is called the Supreme Court.