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The U.S. Supreme Court seemed hesitant Jan. 10 to make a determination whether New York’s “no-surcharge law” violates the First Amendment ( Expressions Hair Design v. Schneiderman, U.S., No. 15-1391 , argued 1/10/17 ).
The law prohibits sellers from charging consumers a higher price for using a credit card, but allows them to offer a discount for using cash.
Both sides purport to have consumers’ best interests in mind.
The sellers who brought the challenge say the law keeps consumers in the dark by criminalizing truthful speech. Their challenge asks whether the law unconstitutionally restricts speech and is “hopelessly vague.”
New York asserts that the law prevents unfair profiteering, consumer anger and deceptive sales tactics.
The justices didn’t seem satisfied with either side’s interpretation of the law.
“I don’t see anything about speech in the statute,” Justice Sonia Sotomayor said to Deepak Gupta, counsel for the petitioners.
“All it says is one price for everything,” Sotomayor said.
The justices tried to use examples to dispel their confusion.
If a merchant posts a “credit card price $2.10, cash price $2,” and a customer hands the merchant a credit card and the cashier says, “you know you’re paying a surcharge of 10 cents,” “you’re going to be prosecuted for that?” Sotomayor asked.
Justice Stephen G. Breyer agreed with Sotomayor about the statute’s text.
“What the statute says is you can’t impose a surcharge,” Breyer said.
“What’s that got to do with speech?” he asked.
Gupta, of Gupta Wessler PLLC, Washington, met Breyer halfway.
“The statute doesn’t scream First Amendment,” he said.
However, the petitioners all want to do the same thing, which is charge two different prices for credit card and cash purchases and to characterize the price difference as a surcharge for using a credit card, which is criminalized by the law, he said.
Gupta urged the court to “take a crack at” the case, citing the court’s “modern trend” to take on First Amendment challenges to ambiguous state laws.
Steven C. Wu, of the New York solicitor general’s office, argued that the statute’s plain language refers to a pricing practice and its application is straightforward.
For sellers that list a single price, as nearly all sellers do, they may not add to their listed prices and instead must adhere to those prices if a customer decides to pay using a credit card, Wu said.
Justice Samuel A. Alito Jr. questioned whether it’s really that simple.
Is there one interpretation of the statute in New York? Alito asked.
“How do we know how all” N.Y. district attorneys are going to interpret the statute? “They may interpret it differently,” he said.
“There shouldn’t be a debate” about the statute because its plain language shows it’s an economic regulation, Wu said.
Eric J. Feigin of the Department of Justice, Washington, argued that there’s no “definitive interpretation of” the law and that the high court should remand the case so that New York’s top court can weigh in on what the law says.
Several of the justices agreed that the lack of a definitive interpretation of New York’s law posed a problem and seemed to favor sending the case back to the lower court.
Alito indicated that he understood the statute to mean “one price for everything” like Sotomayor and that perhaps the state needed to help out.
“I feel somewhat uncomfortable about ruling on the constitutionality of this statute without knowing how” New York’s high court “would interpret the statute,” he said.
“So why shouldn’t we certify that question of interpretation to that court before we plunge into this First Amendment issue?” Alito said.
Breyer didn’t think the court needed to devote even that much effort to the statute.
The “word that I fear begins with an L and ends with an R; it’s called Lochner,” Breyer said.
The case is using the First Amendment as a tool to get at price regulation, he said.
In Lochner v. New York, the U.S. Supreme Court struck down an economic regulation, finding it violated the constitutional liberty of contract.
Lochner was widely criticized and eventually overruled. Since then, the high court has been loath to interfere with economic regulation.
Gupta tried to put Breyer at ease.
This is not price regulation but “is the regulation of how prices are communicated,” he said.
Breyer again raised the Lochner issue with Wu.
“I do have this Lochner problem,” he said.
The fact that “both sides of the bench have had such trouble with this, to me, is strong evidence that the Court should stay out of this under normal First Amendment standards,” Breyer said.
If the court gets involved, the floodgates could open, he said.
There will be “judges all over the country substituting for regulators and others in trying to regulate” prices, Breyer said.
Kennedy ultimately asked the question others may have been thinking.
“Because this is so complicated, doesn’t that indicate the statute is vague?” he said.
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