How Do You Know if Your Crime is at the State or Federal Level? Discover the key differences between state vs. federal laws in the U.S. Understand how they interact, conflict, and impact your daily life. The American legal system operates on a dual sovereignty structure. This means there are two sets of laws that can apply to you: state vs. federal laws. Each level of government has its own court system to prosecute violations of its laws. A good criminal defense lawyer helps you to understand the distinction between state and federal crimes can be crucial, as it significantly impacts the potential penalties, trial procedures, and your rights as a defendant.