I. GENERAL PRINCIPLES 257
A. Diversity vs. federal question:In the federal courts, there are two basic kinds of controversies over which the federal judiciary has subject matter jurisdiction: (1) suits between citizens of different states (so-called diversity jurisdiction); and (2) suits involving a "federal question." 
1. Other cases:Certain other kinds of cases specified in the constitution also fall under the federal judicial power. These are cases involving ambassadors, cases involving admiralty, and cases in which the United States is a party. But except in these very unusual cases, when you are considering a case that is brought in the federal courts, you must ask: Does it fall within the diversity jurisdiction or federal question jurisdiction? If it does not fall within either of these, probably it cannot be heard by the federal courts.
B. Amount in controversy:In federal suits based on diversity, an amount in excess of $75,000 must be in dispute. This is the "amount in controversy" requirement. In federal question cases, there is no amount in controversy requirement. 
C. Burden:The party seeking to invoke the jurisdiction of a federal court must make an affirmative showing that the case is within the court’s subject matter jurisdiction. (Example: If P wants to invoke diversity jurisdiction, in her pleading she must allege the relevant facts about the citizenship of the parties.) 
D. Dismissal at any time: No matter when a deficiency in the subject matter jurisdiction of a federal court is noticed, the suit must be stopped, and dismissed for lack of jurisdiction. See FRCP 12(h)(3), requiring the court to dismiss the action at any time if it appears that the court lacks subject matter jurisdiction. [101 - 102]
Example: A case brought under federal question jurisdiction goes through trial and through one level of appeals, and is then heard by the Supreme Court. The Supreme Court decides that there was no federal question in the first place. Held, the entire case must be dismissed for lack of federal subject matter jurisdiction. [Louisville & National RR v. Mottley]