Federal Courts

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Federal Courts

The U.S. judicial tribunals created by Article III of the Constitution, or by Congress, to hear and determine Justiciable controversies.

The Constitution created the Supreme Court and empowered Congress, in Article I, Section 8, to establish inferior federal courts. The authority of federal courts is limited to that given to them by the federal statutes that created them. Federal courts exist independently of the system of courts in each state that adjudicate controversies that arise pursuant to the laws of that state.

Legislative and Constitutional Courts

Constitutional courts are established pursuant to Article III of the Constitution, which states, "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." These courts have only the powers specified in Article III. They can hear only cases or controversies; their judges hold office for life, as long as they are not guilty of judicial misconduct; and their judges' salary cannot be reduced while those judges serve in office.

The Supreme Court, the U.S. courts of appeal (including the U.S. Court of Appeals for the Federal Circuit), the U.S. district courts, and the Court of International Trade are constitutional, or Article III, courts.

Legislative courts are known as Article I courts because they are created pursuant to the authority given to Congress in Article I, Section 8, Clause 9, of the Constitution. That section empowers Congress "To constitute Tribunals inferior to the Supreme Court." No restrictions exist as to the type of court that must be created. Such courts can possess whatever jurisdiction Congress deems appropriate. Judges can be appointed by specific terms of years, and salaries can be adjusted in response to the changing economy.

In earlier times, legislative courts were the best means to bring justice into the territories. Territorial courts heard all kinds of cases that the constitutional courts could not hear, such as Divorce cases. Once a territory became a state, cases that fell within the jurisdiction of the federal court would be transferred to the federal court established in the new state; all other cases would be heard in the courts of the newly created state.

The u.s. tax court and the U.S. Court of Federal Claims are legislative courts. Although the Court of Military Appeals was created pursuant to Article I, it is not part of the judiciary but functions as a military tribunal to make rules, to regulate the Armed Services, and to review courts-martial.


District courts function as general trial-level courts in the federal system. An appeal from a judgment rendered in a district court is taken to the court of appeals in the judicial circuit in which the district court sits. The Supreme Court hears appeals from a court of appeals pursuant to its mandatory jurisdiction, certiorari jurisdiction, and its rarely used jurisdiction to decide questions of law certified to it by the court of appeals. In addition, specialized federal courts such as the U.S. Court of Federal Claims, the U.S. Court of International Trade, the U.S. Court of Appeals for the Federal Circuit, and the U.S. Tax Court entertain and determine cases that involve only certain areas of law.

Geographic Organization

Every judicial district has at least one district court judge, and most have from one to three district court judges. The number of judges can be changed by Congress when the need exists. Each judge may preside alone, or, when there are two or more judges, all may hold sessions of court at the same time.

The decisions made in federal district courts are reviewable by the court of appeals in each circuit. All the territory of the United States, Puerto Rico, Guam, and the Virgin Islands is divided into 12 judicial circuits.

These 12 circuits are further subdivided into judicial districts. Every state has at least one judicial district. All the territory of Idaho except Yellowstone National Park makes up one judicial district, for example. All of Yellowstone National Park is within the judicial district of Wyoming, including the parts of the park that are in Idaho. The number of districts in each circuit depends on the size of the area and the number of people living within it. Large states require more than a single district. California, New York, and Texas, for example, include four judicial districts. Judicial districts for large areas are further separated into divisions.

Federal law establishes the number of circuit judges and the place where court is held in each circuit. Congress can change both the number and location at any time because the courts of appeals, like the district courts, are created by Congress. The Federal Courts Improvement Act of 1982 (Pub. L. 97–164, Apr. 2, 1982, 96 Stat.25) created the U.S. Court of Appeals for the Federal Circuit, which hears appeals not based on regional boundaries like the other courts of appeal, but involving special topics, such as public contracts and Patents, where the uniform application of legal principles nationwide is highly desirable.

The 12 regional courts of appeals hear appeals from the district courts and many decisions of federal administrative agencies. Cases are usually heard by three judges, but each circuit arranges to hear some cases en banc, with all the circuit judges of that circuit sitting together, hearing or rehearing the case and ruling by majority vote. A majority of the judges in regular active service in the circuit can order a case heard en banc at any time. This order occurs usually if the decision in the case is likely to have a significant effect on issues in pending cases, such as when the case involves an important question of constitutionality, jurisdiction, or the right to appeal.

The Court of Appeals for the Federal Circuit has appellate jurisdiction derived from the merger of the former Court of Claims and the Court of Customs and Patent Appeals in cases involving actions against the government, public contracts, and patents. It also hears appeals from the Court of International Trade, the Patent and Trademark Office, the Merit System Protection Board, and other agencies. This court is intended to provide for the uniform application and enforcement of law in cases that Congress deems should be treated uniformly, but which under the former appellate system were often decided differently from circuit to circuit. As a result of its topical appellate jurisdiction, the Court of Appeals for the Federal Circuit significantly reduces the number of appeals from such decisions to the Supreme Court.

The Supreme Court is empowered to hear cases on appeal that originate anywhere in the United States or its territories.


Jurisdiction is a broad legal term that means the authority of a court to hear and determine a controversy (Subject Matter Jurisdiction) as well as its authority to bind the parties in the action (Personal Jurisdiction). Before a court can exercise subject matter jurisdiction, it must have personal jurisdiction of the parties; otherwise, any judgment rendered by it is null and void. The jurisdiction of a court is derived from constitutional provisions or from statute. Federal courts are courts of limited jurisdiction. They can exercise only the jurisdiction they were specifically given by the Constitution or federal law. Article III of the Constitution establishes the exclusive jurisdiction of federal courts in all cases, whether based on law or Equity, that arise under the Constitution or laws or treaties of the United States; that involve ambassadors, consuls, and other public ministers, admiralty and maritime claims, or the United States as a party; or that arise between two or more states, between a state and a citizen of another state, between citizens of the same state claiming lands under grants of different states, or between a state or its citizens and foreign states, citizens, or subjects. This article specifically gives the Supreme Court original jurisdiction to try cases affecting ambassadors, public ministers, and consuls and cases in which a state is a party. In all other cases, the Supreme Court has appellate jurisdiction: it can review the decisions rendered by courts in which the action was tried or subsequently heard on appeal.

The power of a federal court to hear matters arising under the Constitution, federal law, or treaty is called federal question jurisdiction. Its diversity-of-citizenship jurisdiction empowers it to determine controversies between parties who are citizens of different states. The controversy must have a value of more than $75,000 in order for the court to exercise either federal question or diversity jurisdiction. The $75,000 figure is known as the jurisdictional amount. Federal district courts have original jurisdiction to try these disputes.

As of the early 2000s federal district courts have original and exclusive jurisdiction to entertain Bankruptcy cases and prize cases, which determine the rights in ships and cargo captured at sea. Other controversies that are within the jurisdiction of federal courts include Interpleader actions involving citizens of different states where the item in dispute is worth $500 or more; postal matters; and Copyright, patent, and trademark cases based on federal law. Federal district courts are also authorized by statute to remove actions from state courts to themselves when the disputes could have been brought in such courts originally.

The regional courts of appeals have statutory appellate jurisdiction to review final decisions and specified Interlocutory orders rendered by district courts and administrative determinations made by federal agencies. Interlocutory orders are reviewable in the following situations: when they (1) affect existing injunctions in cases where there is no direct review in the Supreme Court; (2) appoint receivers, refuse to do so, or affect the sale or disposal of property; (3) determine the rights and liabilities of parties in admiralty cases in which appeals from final decree are permissible; or (4) are issued in a bankruptcy action. The courts of appeals also review judgments in civil actions for patent infringement that are final except for an accounting, and judgments rendered in bankruptcy cases. The U.S. Court of Appeals for the Federal Circuit has specialized appellate jurisdiction.

No federal court has jurisdiction to entertain political questions or to issue advisory opinions, since neither constitutes a case or a controversy, one of which must exist if a federal court is to exercise its jurisdiction. Federal courts are also powerless to determine matters that are beyond the scope of their jurisdiction, such as cases involving domestic relations or wills, which are exclusively within the jurisdiction of state courts.

Bankruptcy Courts

In the late 1970s, Congress enacted comprehensive legislation that significantly revised bankruptcy law. Among its various provisions, the Bankruptcy Reform Act of 1978 (11 U.S.C.A. § 101 et seq.) reorganized the structure of the bankruptcy courts. Bankruptcy matters are now heard by a bankruptcy judge. Bankruptcy courts serve as adjuncts to U.S. district courts and have jurisdiction to administer and enforce federal bankruptcy law. A bankruptcy court operates in each federal district. Appeals from this court go to the district court or, if the parties agree, directly to the court of appeals that has jurisdiction over the district.

The Bankruptcy Reform Act of 1994, Pub. L. 103–394, Oct. 22, 1994, 108 Stat. 4106, authorizes bankruptcy judges to hold status conferences to determine the progress of a case and to attempt to expedite the case's conclusion. Pursuant to a status conference, a judge may issue orders that prescribe limitations and conditions necessary to ensure the economic handling of the case. The act also authorizes bankruptcy judges to conduct jury trials with the consent of all parties.

Bankruptcy judges are appointed by the circuit court for the judicial district in which the judges will sit. They serve for a term of 14 years.

Court of Federal Claims

Congress created the former Court of Claims to safeguard the financial stability of the government by not permitting a multitude of claims to deplete the public treasury. Traditionally, persons whose rights were violated by the federal government could seek congressional enactment of a private bill authorizing a payment of money to compensate for the loss. Private bills were addressed to the conscience of the government; therefore, their passage depended on political factors.

Inconsistencies in the passage of private bills and an increase in their number put pressure on legislators and caused serious delay in the completion of the legislative agenda. To ameliorate the situation, Congress enacted a law in 1855 creating the Court of Claims, which was empowered to hear claims against the government and report its findings to Congress along with proposals for solving the problem in each case.

Initially, the Court of Claims could hear only claims and determine whether they had merit. By the end of 1861, Congress was still overburdened by the need to review claims that had already been considered by the Court of Claims. President Abraham Lincoln recommended that judgments made by the Court of Claims be considered final without any further action on the part of Congress. In 1863, Congress accepted the suggestion. The decisions of the Court of Claims were made final with no further action by Congress necessary to give them effect. Appeals, when permitted, were made directly to the Supreme Court.

In 1982, the Federal Courts Improvement Act (28 U.S.C.A. § 1 et seq.) established the U.S. Claims Court, a trial court that inherited almost all the trial jurisdiction of the former Court of Claims. The court's name was changed to U.S. Court of Federal Claims by the Federal Courts Administration Act of 1992 (106 Stat. 4516 [28U.S.C.A. § 1 note]). The court hears lawsuits against the United States based on the Constitution, federal laws, or contracts, or for damages in actions other than torts. It also has jurisdiction to determine cases concerning the salaries of public officers or agents, damages for someone who was unjustly convicted of a federal crime and imprisoned, and some American Indian claims. The Court of Appeals for the Federal Circuit has appellate jurisdiction regarding Court of Federal Claims decisions.

The court's jurisdiction is nationwide. Trials are conducted at locations that are most convenient and least expensive to taxpayers.

Court of International Trade

Congress created the Court of International Trade, formerly known as the Customs Court, to have exclusive jurisdiction in actions involving the imposition of Customs Duties by customs officials. The court can consider the classification of merchandise for customs purposes, the rate charged under the applicable tariff law, or the refusal of the officials of the department of the treasury to make refunds that are allegedly due.

The history and development of the Court of International Trade are intertwined with those of the former Court of Customs and Patent Appeals. At the end of the nineteenth century, the Board of General Appraisers was responsible for the classification of items for import and export and the determination of the rate of customs duties to be imposed. The federal circuit courts, pursuant to their general power to hear appeals, reviewed these decisions from 1890 to 1909. Congress created the Court of Customs Appeals in 1909 to assume the review of appeals from the decisions of the Board of General Appraisers. This specialized court developed expertise in adjudicating the complex and technical issues that arose in customs actions and functioned as a speedy and efficient vehicle for dispensing with such matters, since it could not hear any other cases. It provided sure and uniform administration of justice in such matters, since it was the only court in the United States with exclusive jurisdiction over such matters.

The Board of General Appraisers became the U.S. Customs Court in 1926 and was renamed the Court of International Trade in 1981. The Court of Customs Appeals was designated the Court of Customs and Patent Appeals in 1929 because its jurisdiction was expanded to include review of the decisions of the Patent and Trademark Office. The functions of this court were assumed by the U.S. Court of Appeals for the Federal Circuit in 1982.

The Court of International Trade consists of nine judges, who serve for life unless they are guilty of misconduct; one is named chief judge by the president. Although one judge can hear a case, a panel of three judges usually entertains cases that have significant constitutional ramifications in the customs field. The court is located in New York City because of the importance of the city as a port of entry. The chief judge can dispatch any judges to other ports to hear an action when it is economical, efficient, and fair to do so. A hearing can even be held in a foreign country if that country so permits.

District of Columbia Courts

Historically, the local District of Columbia courts were considered part of the federal court system, since they were created by an act of Congress. The U.S. district court was the usual forum for the adjudication of controversies that arose under District of Columbia as well as federal laws. Owing to a number of judicial reorganizations, however, the District of Columbia as of the early 2000s has its own court system, separate from the federal court system, to hear and determine local disputes. Federal courts still retain authority over any matters that fall within the scope of their designated jurisdiction.

Tax Court

The U.S. Tax Court is a unique tribunal. It was originally created as the U.S. Board of Tax Appeals and functioned as an independent agency in the Executive Branch of the government. Pursuant to the tax reform act of 1969 (83 Stat. 730), its name was changed to U.S. Tax Court, and as of the early 2000s it is an independent judicial body in the legislative branch. Nineteen judges, appointed by the president, serve on the court; although the court is headquartered in Washington, D.C., the judges travel to other specially designated cities to conduct trials.

The Tax Court adjudicates various controversies involving overpayments or underpayments of taxes. Unlike the district courts, the Tax Court does not require a citizen to pay the amount of tax in dispute and file a claim for a refund before it hears and decides the matter. The taxpayer must, however, request and receive from the Internal Revenue Service a statutory notice of deficiency that states the disputed sum. The Tax Court has no jurisdiction unless the notice has been issued and a petition for a hearing has been filed within a specified time.

Simplified procedures are available for small tax cases where the amount in controversy does not exceed $50,000. The decision of the Tax Court in such a case is final and is not subject to review by any court.

The Tax Court has jurisdiction to render declaratory judgments in many areas, such as the qualification of retirement plans, the tax-exempt status of charitable organizations, and the status of interest on certain government obligations. In addition, the Tax Court may issue injunctions in certain assessment cases and decide taxpayers' appeals from denial of administrative costs by the Internal Revenue Service.

All Tax Court decisions, except those in small tax cases, are subject to review by the courts of appeals and, by writ of certiorari, by the U.S. Supreme Court.

Court of Appeals for the Armed Forces

The Court of Appeals for the Armed Forces is the final appellate tribunal that reviews Court-Martial proceedings of the armed services. Established in 1950 (10 U.S.C.A. § 867), it is presided over by five civilian judges who are appointed for 15-year terms by the president. Rulings of the Court of Appeals for the Armed Forces are subject only to certiorari review by the Supreme Court.

Court of Appeals for Veterans Claims

The U.S. Court of Appeals for Veterans Claims was established in 1988 (102 Stat. 4105 [38 U.S.C.A. § 4051]). Originally called the U.S. Court of Veterans Appeals, it was renamed in March 1999 as part of the Veterans Enhancement Act of 1998 (Pub. L. No. 105–368). It has exclusive jurisdiction to review decisions of the Board of Veterans Appeals. The court may not review the schedule of ratings for disabilities or the policies underlying the schedule. Decisions of the court may be appealed to the U.S. Court of Appeals for the Federal Circuit. Seven judges serve on this Court; they are appointed by the president and serve for 15-year terms.

Further readings

U.S. Court of Appeals for the Armed Forces. 2003. Available online at <www.armfor.uscourts.gov> (accessed October 14, 2003).

U.S. Court of Appeals for Veterans Claims. 2003. Available online at <www.vetapp.gov> (accessed October 14,2003).

U.S. Court of Federal Claims. 2003. Available online at <www.uscfc.uscourts.gov> (accessed October 14,2003).

U.S. Court of International Trade. 2003. Available online at <www.cit.uscourts.gov> (accessed October 14, 2003).

U.S. Tax Court. 2003. Available online at <www.ustaxcourt.gov> (accessed October 14, 2003).

Federal courts

n. the court system which handles civil and criminal cases based on jurisdictions enumerated in the Constitution and Federal statutes. They include federal district courts which are trial courts, district courts of appeals and the U. S. Supreme Court, as well as specialized courts such as bankruptcy, customs, tax, claims (against the government) and veterans' appeals. (See: bankruptcy, court of claims)

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