• Supreme Court Chips Away at New York "No Surcharge" Law
  • April 18, 2017 | Author: Christopher R. Rahl
  • Law Firm: Gordon Feinblatt LLC - Baltimore Office
  • The United States Supreme Court, on First Amendment grounds, issued a decision that could mean the demise of state laws that ban credit card surcharges. The decision involved a challenge to a New York law that prohibits merchants from charging a surcharge when a customer pays with a credit card rather than cash. The United States District Court for the Southern District of New York held that the "no surcharge" law violates the First Amendment by prohibiting "surcharges" for consumers who pay with a credit card, but permitting merchants to give a "discount" to customers who pay with cash. The United States Court of Appeals for the Second Circuit disagreed, reasoning that the "no surcharge" law only regulates economic conduct and does not impact speech. The Supreme Court disagreed with the Second Circuit and found that New York surcharge law regulated speech. The Supreme Court vacated the judgement of the Second Circuit and remanded the case with instructions that the Second Circuit determine if the New York surcharge law impermissibly regulates commercial speech. Including New York, there are currently ten states with "no surcharge" laws. The other states that could be impacted by this decision are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, Oklahoma, and Texas. Please contact Christopher Rahl with questions about credit card surcharges, credit card association rules, or similar issues.