U.S. Court Lets First Amendment Challenge to Surcharge Prohibitions Stand (Jan. 19, 2016)
A U.S. appeals court has declined a request from Florida for a full review over a ruling that allows merchant to offer discounts for cash transactions, a move that could lead to more Floridians choosing to pay with cash.
The one-page opinion, announced this month by the U.S. Appeals Court for the Eleventh Circuit based in Atlanta, rejects Florida’s request to revisit the case, which involves the state’s prohibition against credit card surcharges. Late last year, merchants employed the First Amendment to get the court to strike down that prohibition. They argued before the court that the law violated their right to freedom of speech because Florida prevented them from calling a price difference a “surcharge” rather than a “discount.” The court ruled 2-1 in the merchants favor.
The new ruling from the court gave no further opinion beyond denying the state’s request for a review of the 2015 ruling. Neither the merchants involved in the case nor major payment card networks provided immediate comment. The Florida attorney general’s office also provided no immediate comment but did say this in its motion for a rehearing: “The majority opened up any number of laws to full-blown First Amendment scrutiny. The panel majority in this case allowed for the invalidation, on First Amendment grounds, of an economic regulation similar to laws passed by nine other states and the federal government.”
This latest development suggests that retailers around the country may find success with a constitutionally based argument when it comes to fighting state surcharge prohibitions. That said, a challenge to New York’s surcharge law on the same grounds resulted in an initial victory for merchants but they lost on appeal.