In the Judiciary Act of 1789, the First Congress provided the detailed organization of a federal judiciary that the Constitution had sketched only in general terms. Acting on its constitutional authority to establish inferior courts, the Congress instituted a three-part judiciary consisting of the Supreme Court, U.S. district courts, and U.S. circuit courts.
The district courts were to hear minor criminal cases, such as those penalized by a prison term of six months or fewer, as well as all admiralty and maritime cases, and some types of civil suits. The circuit courts would serve as the principal trial courts in the federal system with jurisdiction over all criminal cases as well as civil suits in which more than $500 was at stake and the United States was a plaintiff or petitioner; an alien was a party; or a citizen of the state were the suit was brought was adverse to a citizen of another state. The circuit courts were also granted appellate jurisdiction from the district courts.
Congress granted the Supreme Court exclusive jurisdiction over cases in which a state was a party unless the case was between the state and its own citizens; the state and citizens of another state; or the state and aliens, in which cases the Court would have original, but not exclusive, jurisdiction. The Court also had exclusive jurisdiction over suits against ambassadors and other public ministers, and original but not exclusive jurisdiction over suits brought by such foreign officials. Lastly, the Court possessed appellate jurisdiction from the U.S. circuit courts as well as the highest courts of the states.
Section 25 of the Act, which set forth the parameters of the Supreme Court’s appellate jurisdiction from state courts, was the most controversial provision because some viewed it as an unwarranted intrusion upon the rights of the states. The Court was to have such jurisdiction over cases in which the highest court of a state had ruled a federal law to be invalid; had upheld a state law that had been challenged as violating the U.S. Constitution; or had ruled against a right claimed under the U.S. Constitution, a federal law, or a treaty.
While Article III of the Constitution included within the judicial power cases “arising under” the Constitution, federal laws, and treaties (otherwise known as “federal question” jurisdiction), Congress did not, except for 1801 to 1802, grant the federal courts the full range of such jurisdiction until 1875. Congress did, however, occasionally pass statutes granting the courts federal question jurisdiction in specific areas. The Judiciary Act of 1789, for example, provided that the district courts would have jurisdiction over “all suits for penalties and forfeitures incurred, under the laws of the United States” as well as “causes where an alien sues for a tort only in violation of the law of nations or a treaty of the United States.” The Supreme Court first interpreted the scope of “arising under” jurisdiction in the 1824 case of Osborn v. United States. The Court interpreted such jurisdiction broadly, holding that Congress had the constitutional authority to allow the Bank of the United States to sue and be sued in the U.S. circuit courts, even in cases turning on the application of state law, because the Bank’s federal charter was a potential “ingredient” in any case involving the Bank.