The Supreme Court on Thursday agreed to hear a case challenging laws in 10 states that allow merchants to charge higher prices when a customer pays with a credit card so long as they communicate that price difference as a “cash discount” instead of a “credit card surcharge.”
{mosads}The case, known, as Expressions Hair Design v. Schneiderman, centers on a lawsuit five New York businesses brought against New York Attorney General Eric Schneiderman. In the suit, they allege the state’s law violates their right to free speech under the First Amendment and is unconstitutionally vague under the Due Process Clause of the 14th Amendment.
Because credit card issuers charge merchants credit card swipe fees that amount to 2 to 3 percent of each transaction, the businesses argue a surcharge label is a more effective way to communicate the true cost of credit cards.
The Second Circuit Court of Appeals ruled that the law regulates “merely prices,” not speech, but the 11th Circuit Court of Appeals disagreed, holding that Florida’s virtually identical law “targets expression alone.”
The justices must now settle the split decision among the circuit courts.
The case was one of eight the court added to its docket Thursday, bringing its case load up to 39 for the term starting next week.