A court has jurisdiction over a cause of action if the court has the power to determine the outcome and rights and obligations of the parties. There is both geographical and subject matter jurisdiction. (For more detail see Romantz & Vinson at 12.) Courts that can hear testimony and review documents to determine the facts in a case are called courts of original jurisdiction. We’ll often refer to them as trial courts. Courts that review the decisions of trial courts are called appellate courts. Courts that can hear any claim are called courts of general jurisdiction.
Many state trial courts are courts of general jurisdiction, but many states have special courts for things like family law (divorce and child custody), housing (landlord/tenant disputes), etc. In most cases, statutes determine or limit the jurisdiction of courts. For example, federal courts can generally hear only those cases where there is a federal question, that is, a cause of action arising under federal law; or where there is diversity between the parties, that is, where the plaintiff and defendant are residents of different states. Generally, state courts can hear such cases as well (because they are courts of general jurisdiction), but the parties—or one of them—will sometimes choose to remove a case to federal court. There are some cases where state courts never have jurisdiction: For example, only federal courts may hear copyright cases under the federal Copyright Act.
As noted elsewhere, courts at the state and federal levels sometimes interact, but we’ll save that discussion for when it happens in our cases. For an example, see the discussion of certification of questions in Romantz & Vinson at 14.