- Court: United States Supreme Court
- Area(s) of Law: Constitutional Law
- Date Filed: March 29, 2017
- Case #: 15-1391
- Judge(s)/Court Below: Roberts, C.J., delivered the opinion of the Court, in which Kennedy, J., Ginsburg, J., Thomas, J., and Kagan, J.J., joined. Breyer, J., filed a concurring opinion. Sotomayor delivered a concurring opinion, in which Alito, J., joined.
- Full Text Opinion
When a customer pays for an item with a credit card a merchant selling the item must pay a transaction fee to the credit card issuer. One method for passing on the fees to customers is through differential pricing and one way to do this is by imposing a surcharge for the use of a credit card. The Truth in Lending Act (TILA) previously had a ban on surcharges, which were defined as “any means of increasing the regular price to a cardholder, which is not imposed upon the customers paying by cash, check, or similar means.” However, Congress allowed the ban to expire three years after its imposition. As a result of the lapse, many states enacted their own prohibition on surcharges, including New York. Five New York businesses and their owners challenged the statute banning surcharges for the use of credit cards. The District Court of New York ruled in favor of the merchants, holding that the law regulated speech and violated the First Amendment under the commercial speech doctrine. The Court of Appeals for the Second Circuit vacated the judgment with instructions to dismiss the merchants’ claims. On certiorari to the United States Supreme Court, the court held that New York’s ban on the imposition of a surcharge by merchants for the use of a credit card regulates merchants’ speech. The review by the Supreme Court was limited to a particular pricing structure, where the merchant would either post a cash price and an extra credit card surcharge or conveyed as a percentage of “dollars-and-cents” extra amount. The New York statute at issue is not like a typical price regulation because it regulates how merchants may communicate their prices, which is a regulation of merchants’ conduct.