Court: U.S. Supreme Court
Term: October 2016
Oral Argument: January 10, 2017
Vote: Unanimous (8-0)
Opinion: Chief Justice Roberts
Lower Court: U.S. Court of Appeals for the Second Circuit
Ten states have enacted laws that allow merchants to charge higher prices to consumers who pay with a credit card instead of cash, but require the merchant to communicate that price difference as a cash "discount" and not as a credit-card "surcharge." The question presented is: Do these state no-surcharge laws unconstitutionally restrict speech conveying price information (as the Eleventh Circuit has held), or do they regulate economic conduct (as the Second and Fifth Circuits have held)?
The RLC led an amici brief asking the U.S. Supreme Court to reaffirm that merchants’ communications with customers about the true costs of payment methods (such as credit cards) are protected speech under the First Amendment. Laws that forbid truthful and non-misleading communication about pricing skew public perceptions of both commerce and policy in violation of the Constitution. The brief asks the Court to reverse the decision below holding that a New York law that prevented merchants from surcharging credit card transactions (while at the same time allowing merchants to discount for cash).
The Court concluded that Section 518 of New York General Business Law prohibits a single-sticker pricing regime, in which merchants post a cash price and an additional credit card surcharge. Following the Court of Appeals interpretation, the Court further concluded that a merchant imposes a surcharge when he posts a single sticker price and charges a credit card user more than that sticker price. Additionally, the Court concluded that Section 518 regulates how sellers may communicate their prices and therefore regulates speech. The decision below was vacated and the case is remanded.
Procedural History and Case Documents: