Which of the following best describes when a federal court has subject matter jurisdiction?

• A. Only federal question
• B. Diversity of citizenship exists when complete diversity and the amount in controversy exceeds $75,000
• C. Supplemental jurisdiction is never available
• D. There is federal question or diversity or supplemental jurisdiction

Answer: (D)

Subject matter jurisdiction in federal courts comes from three pathways. A federal court may hear a case based on a federal question—when the claim arises under federal law. It may also hear a case based on diversity of citizenship, provided there is complete diversity among the parties and the amount in controversy exceeds the statutory threshold (currently $75,000). In addition, a federal court can hear related state-law claims through supplemental jurisdiction, which allows all claims that share a common nucleus of facts with a federally supported claim to be resolved in one action.

The best description here is that there is federal question or diversity or supplemental jurisdiction. This captures the three ways a federal court can have jurisdiction: federal-question, complete-diversity with the amount in controversy, and the permissive addition of related state-law claims under supplemental jurisdiction. The other options are incomplete or incorrect in describing SMJ—for example, limiting to federal question only omits diversity, and saying supplemental jurisdiction is never available misstates the rule, since it often applies when there is an underlying federal or diversity claim.