Describe the jurisdiction of the federal courts. What law will the federal court apply?

Question

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Answer 1

Because the federal government is a government of limited powers, the jurisdiction of the federal courts is limited. Article III of the U.S. Constitution establishes the boundaries of federal judicial power. Section 2 of Article III states that "the judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority."
Whenever a plaintiff's cause of action is based, at least in part, on the U.S. Constitution, a treaty, or a federal law, then a federal question arises, and the case comes under the judicial power of the federal courts. Any lawsuit involving a federal question can
originate in a federal district (trial) court. People who claim that their constitutional rights have been violated can begin their suits in a federal district court.
Federal district courts can also exercise original jurisdiction over cases involving diversity of citizenship. Such cases may arise between:
Citizens of different states.
A foreign country and citizens of a state or of different states.
Citizens of a state and citizens or subjects of a foreign country.
The amount in controversy must be more than $75,000 before a federal court can take jurisdiction in such cases. For purposes of diversity-of-citizenship jurisdiction, a corporation is a citizen of the state in which it is incorporated and of the state in which its principal place of business is located. A case involving diversity of citizenship can be filed in the appropriate federal district court. In a case based on a federal question, a federal court will apply federal law. In a case based on diversity of citizenship, however, a federal court will normally apply the law of the state in which the court sits. This is because cases based on diversity of citizenship generally do not involve activities that are regulated by the federal government. Therefore, federal laws do not apply, and state law will govern the issue.