A more thorough explanation:

Federal Courts are courts that have limited jurisdiction and the authority to hear cases that fall within the scope defined in Article III Section 2 of the U.S. Constitution and Congressional statutes. These cases include:

• Cases involving a federal question
• Cases involving diversity
• Cases between two states

The federal court system is composed of three separate levels: district courts, circuit courts, and the Supreme Court. District courts function as trial courts and act as the initial finders of fact. Appeals from District courts go to one of the 12 circuit courts, each of which serves a separate geographic area. A party wishing to appeal a circuit court decision can appeal for a writ of certiorari with the Supreme Court. If this writ is granted, the Supreme Court will hear the case. Additionally, the federal court system also has trial courts of special and exclusive jurisdiction that decide specific types of controversies such as copyright or bankruptcy issues.

For example, if a person believes their constitutional rights have been violated by a government agency, they can file a lawsuit in federal court. Another example is if a person from one state sues a person from another state for damages in excess of $75,000, they can file a lawsuit in federal court.

These examples illustrate how federal courts have the authority to hear cases that fall within their limited jurisdiction, as defined by the U.S. Constitution and Congressional statutes.