First Amendment (commercial speech): Credit cards: Price: Speech: Merchants' speech: Commercial speech: Antitrust:
Each time a customer pays for an item with a credit card, the merchant selling that item must pay a transaction fee to the credit card issuer. Some merchants balk at paying the fees and want to discourage the use of credit cards, or at least pass on the fees to customers who use them. One method of achieving those ends is through differential pricing—charging credit card users more than customers using cash. Merchants who wish to employ differential pricing may do so in two ways relevant here: impose a surcharge for the use of a credit card, or offer a discount for the use of cash. In N. Y. Gen. Bus. Law §518, New York has banned the former practice. The question presented is whether §518 regulates merchants’ speech and—if so—whether the statute violates the First Amendment.
(…) 1974 amendments to the Truth in Lending Act (TILA). The amendments prohibited card issuers from contractually preventing merchants from giving discounts to customers who paid in cash. See §306, 88 Stat. 1515. The law, however, said nothing about surcharges for the use of credit.
In 1981, Congress further delineated the distinction between discounts and surcharges by defining “regular price.” Where a merchant “tagged or posted” a single price, the regular price was that single price. Cash Discount Act, §102(a), 95 Stat. 144. If no price was tagged or posted, or if a merchant employed a two-tag approach—posting one price for credit and another for cash—the regular price was whatever was charged to credit card users. Ibid. Because a surcharge was defined as an increase from the regular price, there could be no credit card surcharge where the regular price was the same as the amount charged to customers using credit cards. The effect of all this was that a merchant could violate the surcharge ban only by posting a single price and charging credit card users more than that posted price.
The federal surcharge ban was short lived. Congress allowed it to expire in 1984 and has not renewed the ban since. The provision preventing credit card issuers from contractually barring discounts for cash, however, remained in place. With the lapse of the federal surcharge ban, several States, New York among them, immediately enacted their own surcharge bans. Passed in 1984, N. Y. Gen. Bus. Law §518 adopted the operative language of the federal ban verbatim, providing that “no seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means.” N. Y. Gen. Bus. Law Ann. §518 (West 2012); see also 15 U. S. C. §1666f(a)(2)(1982 ed.).
In addition to these state legislative bans, credit card companies—though barred from prohibiting discounts for cash—included provisions in their contracts prohibiting merchants from imposing surcharges for credit card use. For most of its history, the New York law was essentially coextensive with these contractual prohibitions. In recent years, however, merchants have brought antitrust challenges to contractual no-surcharge provisions. Those suits have created uncertainty about the legal validity of such contractual surcharge bans.
(We limit our consideration to the single-sticker pricing regime for present purposes. Petitioners’ affidavits and briefing reference other potential pricing schemes, which may be considered by the Court of Appeals to the extent it deems appropriate).
(…) Where a seller posts a single sticker price, it is reasonable to treat that sticker price as the “usual or normal amount” and conclude, as the court below did, that a merchant imposes a surcharge when he charges a credit card user more than that sticker price.
The law (Section 518) tells merchants nothing about the amount they are allowed to collect from a cash or credit card payer. Sellers are free to charge $10 for cash and $9.70, $10, $10.30, or any other amount for credit. What the law does regulate is how sellers may communicate their prices. A merchant who wants to charge $10 for cash and $10.30 for credit may not convey that price any way he pleases. He is not free to say “$10, with a 3% credit card surcharge” or “$10, plus $0.30 for credit” because both of those displays identify a single sticker price—$10—that is less than the amount credit card users will be charged. Instead, if the merchant wishes to post a single sticker price, he must display $10.30 as his sticker price. Accordingly, while we agree with the Court of Appeals that §518 regulates a relationship between a sticker price and the price charged to credit card users, we cannot accept its conclusion that §518 is nothing more than a mine-run price regulation. In regulating the communication of prices rather than prices themselves, §518 regulates speech. (Because it concluded otherwise, the Court of Appeals had no occasion to conduct a further inquiry into whether §518, as a speech regulation, survived First Amendment scrutiny. On that question, the parties dispute whether §518 is a valid commercial speech regulation under Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N. Y., 447 U. S. 557 (1980), and whether the law can be upheld as a valid disclosure requirement under Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U. S. 626 (1985).) (To assess the statute’s constitutionality, the Court of Appeals may need to consider a question we need not answer here: whether the statute permits two-sticker pricing schemes like the one petitioner Expressions currently uses. Respondents’ argument that §518 is a constitutionally valid disclosure requirement rests on an interpretation of the statute that allows such two-sticker schemes.)
(U.S.S.C., March 29, 2017, Expressions Hair Design v. Schneiderman, Docket 15-1391, C.J. Roberts, no dissenter).
En promulguant N. Y. Gen. Bus. Law §518, l'état de New York a proscrit l'imposition par les commerçants d'une surcharge en défaveur de ceux qui paient avec une carte de crédit pour décourager l'usage de ce moyen de paiement. La question que pose cette affaire est de savoir si dite loi règle ou non la liberté d'expression des commerçants et dans l'affirmative, si elle porte atteinte au Premier Amendement. La Cour ne tranche que la première de ces deux questions.
(…) Quand un vendeur indique le prix sur la chose proposée à la vente, il est raisonnable de concevoir ce prix comme le montant "usuel", de sorte que le commerçant imposera une surcharge si le prix à payer par l'usager d'une carte de crédit est supérieur à ce prix usuel.
La Section 518 ne donne aucune indication aux commerçants s'agissant des montants qu'ils sont autorisés à percevoir d'un client qui règle en espèce ou d'un client qui règle par carte de crédit. Un vendeur peut facturer $10 contre du cash et $9.70, $10, $10.30, ou tout autre montant, à l'usager d'une carte de crédit. Ce que la loi stipule, c'est comment les vendeurs peuvent communiquer leurs prix. Un commerçant qui entend facturer $10 pour un paiement en espèces et $10.30 pour un paiement par carte ne peut pas communiquer ce prix comme il l'entend. Il ne peut poster "$10, avec une surcharge de 3% en cas de paiement par carte", du fait que ce libellé identifie un prix usuel inférieur au montant que devra payer celui qui utilise une carte. Cependant, si ce commerçant n'entend poster qu'un seul prix, il devra indiquer la somme de $10.30 comme étant le prix de l'article. Dès lors, la Cour convient que la Section 518 règle la relation entre le prix posté sur l'article et le prix facturé à l'usager d'une carte de crédit. Mais en réglant la communication des prix plutôt que les prix eux-mêmes, la Section 518 réglemente la liberté d'expression. Comme la Cour d'appel a jugé différemment cette dernière question, elle n'a pas eu l'occasion de déterminer si la Section 518 violait le Premier Amendement. La cause lui est conséquemment retournée. Pour apprécier la constitutionnalité de la Section 518, l'autorité précédente pourrait devoir examiner une question que la Cour n'a en l'espèce pas besoin de trancher : celle de savoir si dite Section permet à un commerçant de poster deux prix sur un article.