What is the Judiciary Act of 1789 and how did it affect the the states?

The Judiciary Act of 1789 was a landmark piece of legislation in American history that established the federal judiciary, most notably the Supreme Court, and the position of Attorney General. The act was an expression of the Federalist desire to have a strong, centralized system of government capable of meeting the challenges faced by the new nation. Opponents of Washington's judicial reforms believed that ultimate sovereignty should reside with the states, their legislatures, and their courts. A system of federal courts was something they regarded as a possible instrument of tyranny.
As regards the states, the Judiciary Act gave the newly formed Supreme Court jurisdiction over cases in which a state was a party unless the case was between the state and its own citizens, the state and citizens of another state, or the state and aliens, in which cases the Supreme Court would have original, but not exclusive, jurisdiction.
The most controversial provision of the act, section 25, also related to state sovereignty. The Supreme Court was given jurisdiction in cases in which the highest court of a state had ruled a federal law to be invalid, had upheld a state law that had been challenged as violating the Constitution, or had ruled against a right claimed under the Constitution, a federal law, or a treaty.
To opponents of the Judiciary Act, this represented an unwarranted intrusion into what they believed to be the exclusive rights of the states. But if this provision had not been made, then there is no way that the federal judiciary would've been able to function properly. Unless the new federal judiciary had substantial jurisdiction over state courts, then the states could ride roughshod over any federal law they disliked, using their courts to challenge the power and legitimacy of the federal authorities.
https://avalon.law.yale.edu/18th_century/judiciary_act.asp

https://www.uscourts.gov/about-federal-courts/educational-resources/annual-observances/anniversary-federal-court-system