Supreme Court rules merchants may pursue free-speech challenge to disclose credit-card fees
WASHINGTON _ Merchants may soon have the right to tell customers they will pay a surcharge if they use a credit card rather than pay with cash.
The Supreme Court cast doubt Wednesday on laws in California, New York, Florida and seven other states that make it illegal for sellers to "impose a surcharge" on credit card sales. These long-standing laws, strongly backed by the credit card industry, have been interpreted to mean retailers may not advertise or disclose that the price includes a 2 percent to 3 percent surcharge for using a credit or debit card.
But in a unanimous decision, the justices said these laws "regulate speech" and may be challenged as violations of the First Amendment.
Chief Justice John G. Roberts Jr. said many merchants want to tell their customers about these fees and perhaps encourage more of them to get a discount by paying cash.
"Those fees add up. Rather than increase prices across the board to absorb the costs, merchants want to pass the fees along only to their customers who choose to use credit cards," he said. "They also want to make clear that they are not the bad guys _ that the credit card companies, not the merchants, are responsible for the higher prices."
But the ruling Wednesday was only a partial victory for the five New York businesses, including a hair salon and an ice cream parlor in Brooklyn, that sued to challenge the ban on advertising or disclosing "surcharges" for using credit cards.
The 2nd U.S. Circuit Court of Appeals in New York had upheld the law on the grounds it was a price regulation, not a speech restriction.
Roberts and the Supreme Court disagreed.
But the justices stopped short of striking down the laws. Instead they sent the case back to a New York court to decide whether this "speech regulation" could be justified. Sometimes, laws may regulate the words of commercial transactions to prevent buyers from being fooled or confused.
_Tribune Washington Bureau
