New York's law prohibiting merchants from imposing a surcharge on credit card purchases (Section 518 of the state's General Business Law) regulates speech, thereby making the law subject to First Amendment scrutiny, the U.S. Supreme Court has ruled in Expressions Hair Design v. Schneiderman. The Second Circuit had concluded that Section 518 did not violate the First Amendment because it only regulates pricing, not speech. The Supreme Court vacated that decision and remanded the case to the Second Circuit to assess the law's constitutionality.

The plaintiffs in Expressions Hair Design were five merchants and their owners, who used or sought to use one of two pricing schemes: a "single-sticker-price" scheme in which a merchant posts a single cash price for its goods and services but indicates an additional amount is added for credit card customers, and a "dual-price" scheme in which a merchant posts two different prices—one for credit card customers and one for cash customers. The plaintiffs alleged that by prohibiting their use of a "single-sticker-price scheme" or restricting how they describe the price differential in a "dual-price" scheme, Section 518 violates the First Amendment because it regulates how they communicate their prices.

The Second Circuit agreed that Section 518 would prohibit the plaintiffs from using a "single-sticker-price" scheme but concluded the law does not implicate the First Amendment because it only regulates a pricing practice by requiring the “sticker price” and the price charged to a credit card user to be equal. It does not, however, prohibit merchants from offering a discount to cash customers or referring to a credit-cash price differential as a credit card surcharge. The Second Circuit abstained from ruling on whether Section 518 would apply to a "dual-price" scheme.

Writing for the Supreme Court (and joined by Justices Kennedy, Thomas, Ginsburg, and Kagan), Chief Justice Roberts indicated that the Court limited its review to whether Section 518 was unconstitutional as applied to the plaintiffs' desired "single-sticker-price" scheme. Accepting the Second Circuit's determination that Section 518 bars such a pricing scheme, the Supreme Court disagreed with the Second Circuit's conclusion that Section 518 regulates conduct, not speech. According to the Supreme Court, Section 518 is "not like a typical price regulation," such as one that regulates the amount a merchant can charge for a product. In the Court's view, Section 518 is different because it "tells merchants nothing about the amount they are allowed to collect from a cash or credit payer," and, instead, "[w]hat the law does regulate is how sellers may communicate their prices." Because the Second Circuit had not considered whether, as a speech regulation, Section 518 survived First Amendment scrutiny as a valid restriction on commercial speech or a disclosure requirement, the Supreme Court remanded for the Second Circuit to do so.

Justice Sotomayor, in an opinion joined by Justice Alito that concurred only in the judgment but not as to whether Section 518 regulates speech, stated that the Second Circuit abused its discretion by not certifying to the New York Court of Appeals the question of what pricing schemes are prohibited by Section 518. While observing that the Supreme Court's opinion did not "foreclose the Second Circuit from choosing that route on remand," she stated that she would have remanded the case with directions to certify the case to the New York Court of Appeals for "a definitive interpretation" of Section 518. Justice Breyer, while agreeing in his concurring opinion that Section 518 regulates speech and that remand was appropriate, wrote that certification to the New York Court of Appeals "may well be helpful."

In 2015, a divided 11th Circuit panel ruled that Florida's "no surcharge" law is an unconstitutional abridgement of free speech, and in 2016, a divided Fifth Circuit panel rejected a First Amendment challenge to Texas's "no surcharge" law on the grounds that it regulates pricing and only incidentally implicates speech. Further review of the prohibitions imposed by the state laws at issue in those cases is needed to determine whether they would be considered to regulate speech under the Supreme Court’s analysis in Expressions Hair Design. In addition to Florida, New York, and Texas, California, Colorado, Connecticut, Kansas, Maine, Massachusetts, and Oklahoma have "no surcharge" laws.

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