Last week, in a unanimous decision, the Supreme Court of the United States held that New York General Business Law Section 518, which provides that "[n]o 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," regulates merchants' speech, and remanded the case to the United States Court of Appeals for the Second Circuit to determine whether the regulation is unconstitutional under the First Amendment.1
While this decision does not override the laws of the states2 that currently prohibit a merchant from assessing a surcharge on customers who elect to pay by credit card, this decision sends a signal that the Court ultimately may hold that the New York law and other similar state laws unconstitutionally regulate merchants' commercial speech rights in violation of the First Amendment. We will continue to monitor and provide updates regarding this case as they develop.
1Expressions Hair Design v. Schneiderman, 581 U.S. ___ (2017).
2 As of the date of this alert, there are statutes prohibiting merchants from assessing a surcharge on customers who elect to pay by credit card in ten states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
