According to the US Courts, federal courts abstain from hearing cases that are more properly handled by states. The federal court must have jurisdiction to hear the case. Jurisdiction depends on the subject matter, standing of the parties, amount of potential damages and merits of the case.
The first step in hearing a federal case, according to the US Courts, is to determine the presiding court's jurisdiction over the matter at hand. Federal courts typically hear cases that contain a federal question, such as constitutionality of the law, legal disputes between states, admiralty matters and bankruptcy cases. Otherwise, a federal court may hear a case based on diversity of citizenship when potential damages exceed a certain dollar amount, according to the US Courts. When non-eligible cases, such as family law, probate, real estate and most criminal complaints, are erroneously filed in federal court, these cases are routinely referred back to the local state court.
Having established jurisdiction, the federal court then rules on the standing of the parties to the case. If one or more parties is not eligible to bring a case in federal court, then the matter is typically dismissed without prejudice, for lack of standing. The US Courts explain that standing requires that the plaintiff has been genuinely aggrieved by the defendant, in addition to other requirements. Once the case is heard, the court considers the evidence, language and intent of relevant laws and any legal precedents established by higher courts; then it renders a decision. Unless the court in question is the Supreme Court, the losing party typically has a right to appeal.