Defending the free speech rights of retailers

Yesterday, PLF teamed up with its friends at the Cato Institute to file a joint amicus brief in the U.S. Supreme Court in defense of retailers’ First Amendment rights, in Expressions Hair Design, et al. v. Schneiderman.  

The case challenges a New York law that prohibits businesses from telling consumers that they will be charged a “surcharge” for using a credit card, while allowing a difference in price between a cash and credit card purchase to be explained as a “cash discount.” Under the law, it is OK to advertise a product for $103 with a $3 cash discount—for a net price of $100; but illegal to tell a consumer that the price is $100, but $103 if he uses a credit card. Breaking the law subjects a business owner to fines and even jail time.

The U.S. Court of Appeals for the Second Circuit upheld the law, holding that it only regulates pricing “conduct” and not the constitutionally protected speech of sellers. In a Florida case involving a nearly identical law, however, the U.S. Court of Appeals for the Eleventh Circuit rejected that distinction last year, striking down the law as a violation of free speech.  While the ban “purports to regulate commercial behavior,” the Eleventh Circuit observed, it in fact only “ban[s] merchants from uttering the word surcharge, criminalizing speech that is neither false nor misleading.” Dana’s R.R. Supply v. Att’y Gen., Florida, 807 F.3d 1235, 1251 (11th Cir. 2015).

The Supreme Court has routinely protected the First Amendment rights of businesses and consumers in the “free flow of truthful commercial information,” including pricing information.  See, for example, United States v. United Foods, Inc., 533 U.S. 405, 426 (2001).

Our brief particularly focuses the court’s attention on the cronyism at the heart of these speech laws. Credit card companies have lobbied for the speech bans over the years in order to effectively mask the cost of using credit cards from consumers. We urged the court to reject the de facto censorship of pricing information as a violation of the First Amendment.