PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

VALERO TERRESTRIAL CORPORATION;
LACKAWANNA TRANSPORT COMPANY;
SOLID WASTE SERVICES, INCORPORATED,
d/b/a J. P. Mascaro & Sons,
Plaintiffs-Appellants,

v.

THE HONORABLE JOHN E. CAFFREY,
Director, Division of Environmental
Protection; RANDY HUFFMAN, Assistant
Chief, Office of Waste Management
of the Division of Environmental
Protection; DARRELL V. MCGRAW, JR.,
The Attorney General of the State of
West Virginia; RICHARD E. BOYLE,
Tax Commissioner,
Defendants-Appellees,
                                       No. 99-1600
and

THE HONORABLE OTIS CASTO,
Commissioner, The Public Service
Commission of the State of West
Virginia; THE HONORABLE CHARLOTTE
LANE, Commissioner, The Public
Service Commission of the State of
West Virginia; THE HONORABLE
RICHARD FRUM, Commissioner, The
Public Service Commission of the
State of West Virginia; THE
HONORABLE ROBIN CAPEHART,
Secretary, Department of Tax and
Revenue of the State of West
Virginia,
Defendants.
Appeal from the United States District Court
for the Northern District of West Virginia, at Wheeling.
Frederick P. Stamp, Jr., Chief District Judge.
(CA-97-177-5-S)

Argued: December 2, 1999

Decided: March 2, 2000

Before MURNAGHAN and WILLIAMS, Circuit Judges,
and Cynthia H. HALL, Senior Circuit Judge of the
United States Court of Appeals for the Ninth Circuit,
sitting by designation.

_________________________________________________________________

Affirmed by published opinion. Senior Judge Hall wrote the opinion,
in which Judge Murnaghan and Judge Williams joined.

_________________________________________________________________

COUNSEL

ARGUED: William Francis Fox, Jr., Harleysville, Pennsylvania, for
Appellants. Silas Bent Taylor, Senior Deputy Attorney General,
Charleston, West Virginia, for Appellees. ON BRIEF: Logan Hassig,
SNYDER & HASSIG, New Martinsville, West Virginia, for Appel-
lants. Armando Benincasa, William E. Adams, Jr., Office of Legal
Services, WEST VIRGINIA DIVISION OF ENVIRONMENTAL
PROTECTION, Charleston, West Virginia, for Appellees Caffrey and
Huffman.

_________________________________________________________________

OPINION

CYNTHIA HOLCOMB HALL, Senior Circuit Judge:

Valero Terrestrial Corp. ("Valero") appeals the district court's
granting of summary judgment in favor of John Caffrey ("Caffrey" or
"appellee") (sued in his official capacity as the Director of the Divi-

                    2
sion of Environmental Protection for the State of West Virginia along
with other West Virginia state officials). Valero had sued Caffrey
seeking declaratory and injunctive relief claiming that a charge
imposed by West Virginia Code § 22-16-4(a) (the Solid Waste
Assessment Fee), a section of West Virginia's Landfill Closure Act,
is an unconstitutional violation of the commerce clause and Valero's
substantive due process rights. Before the district court reached the
substantive portion of Valero's claim, it deemed the charge imposed
by § 22-16-4(a) a "tax" for purposes of the federal Tax Injunction Act1
("TIA") and consequently declared itself without jurisdiction to
decide Valero's substantive claim. We have jurisdiction pursuant to
28 U.S.C. § 1291, and we affirm.

I.

Appellants (Valero, Lackawanna Transport Company, Solid Waste
Services, Inc., and d/b/a J.P. Mascaro & Sons) own and operate two
landfills and a solid waste transport company that uses landfills to dis-
pose of customers' waste in West Virginia. Under West Virginia law,
appellants are assessed various charges2 that are imposed on parties
that partake in the landfill industry.

One such charge is mandated by West Virginia Code§ 22-16-4(a)
which imposes "a solid waste assessment fee . . . upon the disposal
of solid waste at any solid waste disposal facility[(landfill)] in this
state in the amount of three dollars and fifty cents per ton . . . ." The
charge is imposed upon "the person disposing of solid waste at [the
landfills] . . . and the fee [is] collected by the operator of the [landfill]
who . . . remit[s] it to the tax commissioner" on a monthly basis. See
W. Va. Code § 22-16-4(b).
_________________________________________________________________

1 See 28 U.S.C. § 1341.

2 Terminology in this case is rather confusing. The West Virginia stat-
ute at issue in this case refers to the assessments as "fees." However,
because the issue in this case is to determine whether the assessments are
"fees" or "taxes," to refer to this assessment as a "fee" a priori would
complicate matters unnecessarily. Therefore we refer to the assessment
as a "charge" throughout the analysis.

                    3
The revenue collected from the charge described above is depos-
ited into the "Closure Cost Assistance Fund" which is dedicated to
West Virginia's Landfill Closure Assistance Program. See W. Va.
Code §§ 22-16-1 and 22-16-12. This Program provides funding for
landfills that do not meet certain environmental criteria set out by the
Environmental Protection Agency ("EPA"). The EPA, in promulgat-
ing its environmental criteria for the regulation of landfills, was con-
cerned with remedying those instances where landfills would
contribute to serious groundwater contamination.

The scheme enacted by West Virginia to combat contaminated
landfills was constructed to address the problem concerning those
landfill facilities whose owners were not able to pay the costs of
upgrade or closure. Because of the combined necessities of complying
with the EPA regulations and cleaning up contamination which cre-
ated an enormous potential health hazard, the West Virginia legisla-
ture deemed that the charge at issue here would be funneled towards
the landfill closure/upgrade costs for those facilities unable to afford
such expenses. The West Virginia legislature stressed that this was
necessary because a large percentage of citizens within the state rely
on groundwater as their sole source of water.

Once the funds are collected, they are deposited under the rubric
of the Landfill Closure Assistance Fund which is designated as a spe-
cial revenue fund. Nevertheless, this fund is part of the general state
fund within the state treasury and under the control of the State Trea-
surer. As such, any refund ordered by that account would come
directly from the state treasury in accordance with state law which
states that all money collected under the acts of the legislature
becomes part of the state treasury. See W. Va. Code § 12-2-2.

Appellants challenged the constitutionality of the charge assessed
under § 22-16-4(a). They claim that § 22-16-4(a) violates interstate
commerce rights protected under the dormant Commerce Clause and
also violates substantive due process rights. Appellees countered with
the claim that the TIA divests the district court of jurisdiction on the
basis that the charge imposed by § 22-16-4(a) is a "tax" and not a
"fee." The district court agreed with appellees' argument and constru-
ing appellees' motion to dismiss for lack of subject matter jurisdiction
as a motion for summary judgment, granted summary judgment for

                     4
appellees before reaching the merits of appellants' claim. Appellants
appeal this ruling.

II.

We review de novo a grant of summary judgment. See Akers v.
Caperton, 998 F.2d 220, 224 (4th Cir. 1993). Similarly, we review de
novo a dismissal for lack of subject matter jurisdiction. See Evans v.
B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999).

The TIA provides:

          The district court shall not enjoin, suspend, or restrain the
          assessment, levy, or collection of any tax under State law
          where a plain, speedy and efficient remedy may be had in
          the courts of such State.3

28 U.S.C. § 1341. The TIA represents a recognition that states are
best situated to administer their own fiscal operations. See Tully v.
Griffin, Inc., 429 U.S. 68, 73 (1976). As such, the term "tax" is sub-
ject to a "broader" interpretation when reviewed under the aegis of the
TIA. See Tramel v. Schrader, 505 F.2d 1310, 1315 (5th Cir. 1975).

The West Virginia charge at issue here is defined as a "fee" in the
pertinent subsection of the statute. See W. Va. Code § 22-16-4(c).
However, the nomenclature provided to the charge at issue is not
material as the inquiry focuses on explicit factual circumstances that
transcend the literal meaning of the terminology. See Folio v. City of
Clarksburg, 134 F.3d 1211, 1216-17 (4th Cir. 1998).

To determine whether a particular charge is a "fee" or a "tax," the
general inquiry is to assess whether the charge is for revenue raising
purposes, making it a "tax," or for regulatory or punitive purposes,
making it a "fee." See Collins Holding Corp. v. Jasper County, 123
F.3d 797, 800 (4th Cir. 1997). To aid this analysis, courts have devel-
oped a three-part test that looks to different factors: (1) what entity
_________________________________________________________________
3 There is no contention in this case that West Virginia state courts
would not provide a "plain, speedy and efficient" remedy in similar cir-
cumstances.

                    5
imposes the charge; (2) what population is subject to the charge; and
(3) what purposes are served by the use of the monies obtained by the
charge. See San Juan Cellular Telephone Co. v. Public Service
Comm'n, 967 F.2d 683, 685 (1st Cir. 1992); see also Bidart Bros. v.
California Apple Comm'n, 73 F.3d 925, 931 (9th Cir. 1996).

In San Juan Cellular, the court set out the precise confines of a
"classic tax" versus a "classic fee." The "classic tax" is imposed by
the legislature upon a large segment of society, and is spent to benefit
the community at large. See San Juan Cellular , 976 F.2d at 685. The
"classic fee" is imposed by an administrative agency upon only those
persons, or entities, subject to its regulation for regulatory purposes,
or to raise "money placed in a special fund to defray the agency's
regulation-related expenses." Id. The San Juan Cellular court noted
that most charges will not fall neatly into either extremity and the
characteristics of the charge will tend to place it somewhere in the
middle. See id.

When the three-part inquiry yields a result that places the charge
somewhere in the middle of the San Juan Cellular descriptions, the
most important factor becomes the purpose behind the statute, or reg-
ulation, which imposes the charge. See South Carolina v. Block, 717
F.2d 874, 887 (4th Cir. 1983). In those circumstances if the ultimate
use of the revenue benefits the general public then the charge will
qualify as a "tax," while if the benefits are more narrowly circum-
scribed then the charge will more likely qualify as a "fee." See San
Juan Cellular, 967 F.2d at 685.

The first two steps of the inquiry indicate that the charge imposed
by W. Va. Code § 22-16-4(a) is a "tax." First, the charge was imposed
by the West Virginia legislature and not any administrative agency.
Second, the charge is imposed on the persons disposing of the waste
into the landfill and thus is paid by those citizens and businesses who
pay a collection service fee to have their waste picked up. See W. Va.
Code § 22-16-4(c). This subsection ensures that the cost of the charge
is passed from the transporter of the waste to the generators of the
waste, so to spread the cost to a significantly wider proportion of the
population.

The last part of the test also yields to the conclusion that the charge
is a "tax" because the benefits of the charge touch a large segment of

                    6
the West Virginia population. The statute was passed pursuant to an
EPA regulation that sought to reduce the hazard of contaminated
landfills. The aim of the West Virginia statute is to enable those land-
fill owners, who cannot for financial reasons comply with EPA regu-
lations, close or upgrade said landfills to non-hazardous levels. Thus,
it is the environmental safety of West Virginia's groundwater that is
the paramount purpose of the § 22-16-4(a) charge and it cannot be
said that such purpose serves a small section of society.

Appellants, in applying the San Juan Cellular test, cite five reasons
why the charge at issue should be declared a "fee" and not a "tax."
Upon close examination of the five reasons argued by appellants, it
emerges that in fact these five reasons boil down to one. That reason
being that the revenue raised by § 22-16-4(a) is deposited into a spe-
cial fund and used for a specific purpose.4 By such reasoning, appel-
lants are elevating form over substance in denigration of the central
holding of San Juan Cellular that mandates an examination of the use
and purpose of the charge rather then a cursory review of where the
revenue is placed or how the charge is referred to in the promulgating
document. See San Juan Cellular, 967 F.2d at 685. Moreover, the fact
that revenue is placed in a special fund is not enough reason on its
own to warrant characterizing a charge as a "fee." See Collins, 134
F.3d at 1217. If the revenue of the special fund is used to benefit the
population at large then the segregation of the revenue to a special
fund is immaterial. See Bidart, 73 F.3d at 932. Thus, when revenue
is placed in a special fund the further inquiry must be whether the
money is used "to benefit regulated entities, . .. to defray the cost of
regulation" (making it resemble a "fee") or else to benefit the general
public. See Collins, 134 F.3d at 1217. As discussed above, the pur-
pose of the special fund serves neither purpose that would render it
a "fee" but falls squarely within the characterization of a "tax." Lastly,
even though the revenue is placed in a special fund, it is nonetheless
_________________________________________________________________
4 Appellees correctly note that one of the "five" reasons alluded to by
appellants is that part of the proceeds of the charge are dedicated to the
Solid Waste Enforcement Fund for administration purposes pursuant to
W. Va. Code § 22-16-4(h). This subsection of the Code was passed in
March 1998, and was not presented for review to the district court below.
Therefore, this subsection is not properly before this Court for review
and cannot form a basis for appellants' argument.

                    7
deposited into the State Treasury pursuant to West Virginia law,
which further militates towards the widespread benefit of the charge.

Appellants also try to analogize the facts of this case to three cases
where the courts deemed a state charge a "fee" and thus not subject
to the TIA. See Trailer Marine Transport Co. v. Rivera Vazquez, 977
F.2d 1 (1st Cir. 1992); Bidart, 73 F.3d 925 (9th Cir. 1996); and
Government Suppliers Consolidating Servs., Inc. v. Bayh, 975 F.2d
1267 (7th Cir. 1992).5 Each of these cases has factual differences that
distinguish them from the facts present here. Trailer Marine involved
a Puerto Rico compulsory, no-fault compensation plan to protect vic-
tims of motor vehicle accidents, funded by a $35.00 vehicle user fee.
See Trailer Marine, 977 F.2d at 3. In ruling that the $35.00 assess-
ment was a fee, the First Circuit focused on the fact that beneficiaries
were a specific, limited segment of society (car accident victims). See
id. at 6. This factually distinguishes Trailer Marine from this case in
that, as discussed above, the beneficiaries of the charge are spread
widely amongst the West Virginia population. In Bidart, which con-
cerned a charge assessed by the California Apple Commission, the
Ninth Circuit relied on the fact that the charge was not assessed by
the legislature, was intended to promote apple-growing in the state,
and the revenue was spent for the promotion of California apples
which only provided an incidental benefit to the general public. See
Bidart, 73 F.2d at 932-33. In this case it is the West Virginia legisla-
ture that promulgated § 22-16-4(a) for the benefit of all those citizens
and businesses whose source of water is groundwater. Government
Suppliers is inapposite because the court in that case never adequately
addressed whether the charges were "taxes" or"fees" under the TIA
and merely acknowledged the TIA in cursory footnotes. See
Government Suppliers, 975 F.2d at 1271 nn. 2 & 3.

More instructive to the analysis of § 22-16-4(a) is American Land-
_________________________________________________________________
5 Appellants also cite to a West Virginia state court case. See Wetzel
County Solid Waste Authority v. West Virginia Division of Natural
Resources, 195 W. Va. 1 (1995). Under federal law, it is federal courts,
and not state courts, that determine whether a charge is "tax" or a "fee"
under the TIA. See Wright v. McClain, 835 F.2d 143, 144 (6th Cir.
1987). Consequently, Wetzel (which was not interpreting § 22-16-4(a)) is
not relevant to this case.

                    8
fill, Inc. v. Stark/Tuscarawas/Wayne Joint Solid Waste Management
District, 166 F.3d 835 (6th Cir. 1999). In American Landfill, like
here, the plaintiff challenged the constitutionality of a solid waste dis-
posal charge that was levied against persons who disposed of waste
at landfills and whose revenue was placed in a special fund. See id.
at 836. The articulated purposes behind the charge included enforce-
ment of landfill laws and regulations, water testing and defraying of
administrative costs. See id. Unlike here, the charge was to be levied
by the administrative agency with authority granted to it by the Ohio
legislature. See id.

In ruling the charge a "tax" under the TIA, the Sixth Circuit rea-
soned that of supreme relevance was the fact that the fund "while sep-
arate from the general revenue, serves public purposes benefitting the
entire community" and related directly to the citizens of Ohio. See id.
at 839-40. This holding is particularly instructive in this case because
the American Landfill court had more factors that pointed towards the
direction of "fee" characteristics under San Juan Cellular and never-
theless ruled the charge a "tax." In American Landfill the levying
authority was the administrative agency and one of the enumerated
purposes of the charge was to defray administrative costs while here
such facts are not present. Therefore, the remaining overarching simi-
larities between American Landfill and § 22-16-4(a), being the gen-
eral benefit of the charge to the community, argue in favor of
declaring § 22-16-4(a) a "tax."

Appellants final argument is that the district court judge in this
case, Judge Stamp, has already ruled that § 22-16-4(a) is a "fee"
rather than a "tax" in a previously related case. See Valero Terrestrial
Corp. v. McCoy, 36 F. Supp. 2d 724 (N.D.W.Va. 1997). Reliance on
this opinion is misplaced. First, in a subsequent order, Judge Stamp
vacated that opinion and dismissed the underlying lawsuit. See Valero
Terrestrial Corp. v. McCoy, 50 F. Supp. 2d 564 (N.D.W.Va. 1999).
Second, the specific charge at issue here was never addressed in either
opinion and Judge Stamp explicitly remarked that because the consti-
tutionality of § 22-16-4(a) was being litigated in this case, there was
no reason to duplicate the effort in the prior case. See Valero, 50 F.
Supp. 2d at 567-68. Third, the charge ruled a "fee" under the TIA in
the prior case has since been repealed by the West Virginia legisla-
ture. See id. at 569. Fourth, the charge challenged in the prior lawsuit

                     9
was substantially different than the one at issue here in that it applied
only to out-of-state waste deposited in West Virginia landfills with
the stated purpose of discouraging such conduct. This rationale is not
applicable to § 22-16-4(a). Therefore, appellants' attempts to create a
link to these prior cases are unavailing.

CONCLUSION

For the foregoing reasons, we affirm the district court's opinion
declaring W. Va. Code § 22-16-4(a) to be a"tax." The district court
was correct to declare itself without jurisdiction to entertain Valero's
claim pursuant to the TIA.

AFFIRMED

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