Definition of Jurisdiction
A jurisdiction is the geographical area over which a specific legal entity has authority. For instance, jurisdiction for the Federal Government is the entire United States, but each state also has jurisdiction to pass its own laws within the state's boundary. Other smaller geographic areas exist such as cities and counties and have power to pass laws within their jurisdiction separate from state or federal governments.
If you are filing a case in court the court must have not only personal jurisdiction but also subject matter jurisdiction. How do you know if a court has personal jurisdiction? If the defendant defendant resides or does business in a state the state generally has personal jurisdiction. For example, if you sue a Texas citizen in a Texas state court for breach of contract the state has jurisdiction over the case. Federal courts have limited subject matter jurisdiction and can only hear certain types of cases such as those arising under any federal law or if you are suing a citizen of a different state (or a foreign national), and you are asking for at least $75,000 in monetary damages.