Businesses embroiled in contract disputes may not know (or understand) what subject matter jurisdiction is all about, but they should know that it is an important consideration in whether a court can hear the case before it. If a case is filed in an incorrect court, the defending party may ask the court to dismiss the case for lack of jurisdiction.

Colorado state courts are courts of general jurisdiction. This means that they are vested with the power to hear a number of disputes arising under Colorado law. They may include property disputes, criminal matters and issues pertaining to family law, for example.

Conversely, federal courts in Colorado are courts of limited jurisdiction. These courts hear matters that arise under two categories: federal questions and diversity jurisdiction. Federal question cases are disputes based on federal law. Patent and trademark infringement matters, federal discrimination questions, civil rights violations and violations of federal criminal statutes are examples.

As for diversity jurisdiction, the dispute must involve residents of two different states and the amount in controversy (the amount of money being sought in damages) must exceed $75,000. The lawsuit between the restaurant franchise Steak-N-Shake and a Denver-area franchisee is a prime example. Steak-N-Shake is an Indianapolis based company, and the franchisee is a Colorado resident. The dispute between them (as highlighted in a prior post) was well over 75,000, thus giving the U.S. District Court for the District of Colorado jurisdiction over the case.

If you have questions about jurisdiction and what court is able to hear a lawsuit, an experienced attorney can help.

Source: Law.cornell.edu – Subject matter jurisdiction