2.1 Courts of Limited Jurisdiction

Updated 2013 by Jeffrey S. Gutman

Federal courts are courts of limited jurisdiction.1 Article III, Section 1 of the U.S. Constitution establishes the Supreme Court and gives Congress the power to create inferior federal courts. The outer boundary of federal judicial power is defined in Article III, Section 2, which lists the categories of cases over which federal judicial power may extend. The two most significant categories are commonly known as federal question and diversity jurisdiction. These constitutional provisions are not self-executing. Beginning with the Judiciary Act of 1789, Congress has created a system of federal courts and has vested it with much, but not all, of the jurisdiction permitted by Section 2. The Constitution therefore established the potential scope of federal jurisdiction, and Congress has defined the actual, more limited, breadth of it.

Federal jurisdiction generally exists when a federal statute creates a private right of action and supplies the substantive rules of decision. That presumption may be overcome only when a federal statute expressly limits the exercise of subject matter jurisdiction2 or by "fair implication" limits the exercise of subject matter jurisdiction by federal courts.3 For example, in Mims v. Arrow, the Supreme Court recently held that a provision in the Telephone Consumer Protection Act of 1991, which afforded a person or entity a private right of action against alleged violators "in an appropriate court of [the] State," did not divest the federal courts of federal question jurisdiction.

The U.S. Supreme Court has, however, developed common law doctrines that may restrict the exercise of statutorily conferred jurisdiction. Some of the restrictions are derived from Article III’s case and controversy requirement, discussed in Chapter 3 of this MANUAL.  Others fall within the ambit of the abstention doctrine, discussed in this chapter.

Updated 2013 by Jeffrey S. Gutman

  • 1. Mims v. Arrow, 132 S. Ct. 740, 747 (2012). 
  • 2. See 28 U.S.C. § 1341, 1342.
  • 3. Mims, 132 S. Ct. 740, 748-49. For an example, see Wade v. Blue, 369 F.3d 407, 411 (4th Cir. 2004). Federal jurisdiction may not exist over a federally created right of action when the controlling substantive law is nonfederal. Thus, in Shoshone Mining Co. v. Rutter, 177 U.S. 505 (1900), the Court illustrated a second, narrow exception to the general rule. The Court there found no federal jurisdiction over a claim involving a federal mining patent because local law established the standards for determining the merits of the claim.