On March 29, 2017, the U.S. Supreme Court held that a New York law restricting the way merchants may communicate prices to their customers regulates speech and, thus, is subject to review under the First Amendment. Specifically, the Court held that New York General Business Law § 518 (“Section 518”) should not be viewed as regulating prices, which is permissible regulation of conduct, because Section 518 does not require merchants to sell products or services at any particular price. Rather, the Court held that Section 518 places restrictions on the manner in which merchants may communicate prices to customers, which amounts to regulation of speech. The unanimous decision, penned by Chief Justice Roberts, overturned the ruling by the Court of Appeals for the Second Circuit in Expressions Hair Design v. Schneiderman and remanded the case for the Second Circuit to decide whether the law violates the First Amendment. Following the decision, questions remain about the meaning of Section 518 and the standard for determining the permissibility of speech regulation under the First Amendment.

SECTION 518’S MEANING -

According to the Court, Section 518 restricts the signage merchants may display and other communications to customers by prohibiting merchants from displaying a single price for a given item and then adding a surcharge for the use of a credit card. Under the law, merchants may communicate that there are different prices depending on the form of payment by displaying a single price for an item and providing a discount for customers that pay in cash. In contrast, plaintiff Expressions Hair Design displayed different prices for customers paying with cash and customers paying with credit. The Court, in a footnote, suggested that the Court of Appeals may need to analyze whether Section 518 permits such a “two-sticker” pricing scheme in order to determine whether Section 518 is constitutional —a question that the Court of Appeals stated was “far from clear” in its now-vacated decision in this case.