Both Sides Urge Justices To Resolve Credit Card Law

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TALLAHASSEE (CBSMiami/NSF) – A group of Florida businesses agrees the U.S. Supreme Court should resolve questions about the constitutionality of a state law that has barred merchants from imposing surcharges on customers who pay with credit cards — but the answer might ultimately come in a case from New York.

Attorney General Pam Bondi in June asked the Supreme Court to take up the dispute, after a federal appeals court ruled that the law violated the First Amendment. The 11th U.S. Circuit Court of Appeals said the law allows businesses to offer discounts to customers who pay with cash but does not allow surcharges for credit-card purchases — a situation the ruling likened to “distinctions in search of a difference.”

Lawyers for four Florida businesses that challenged the law filed a document this month agreeing that the case is worthy of a Supreme Court decision. But they urged justices to resolve the issues through a New York case, which involves a similar law and was filed earlier.

The 2nd U.S. Circuit Court of Appeals upheld a New York law blocking businesses from imposing surcharges for credit-card purchases. That conflicts with the ruling by the 11th U.S. Circuit Court of Appeals in the Florida case — a conflict that could serve as potential grounds for the Supreme Court to decide to take up the case.

“None of this is to say that this (Florida) case would be a poor vehicle. It would not be,” said the document filed this month in the Florida case. “But there is nothing to suggest that it would be a better vehicle than (the New York case). If anything, the robust record of enforcement in (the New York case) makes that case a superior vehicle. That record includes a criminal prosecution and numerous detailed and uncontested declarations from merchants targeted by the New York attorney general in recent years for violating the law.”

A petition filed in May at the Supreme Court in the New York case said 10 states have laws regulating how businesses can communicate price differences when customers pay with credit cards or cash.

Florida has allowed businesses to offer discounts to customers who pay with cash but has not allowed price differences to be construed as surcharges for credit-card users.

The challenge to the Florida law was filed in 2014 by businesses that had received “cease-and-desist” letters from the state related to alleged violations of the credit-card surcharge law, according to court documents. The businesses were Dana’s Railroad Supply in Spring Hill, TM Jewelry LLC in Key West, Tallahassee Discount Furniture in Tallahassee and Cook’s Sportland in Venice. The law says violators can face second-degree misdemeanor charges.

The businesses argued, and a majority of the 11th U.S. Circuit Court of Appeals agreed, that the law violates free-speech rights. In the document filed this month at the Supreme Court, for example, the businesses’ lawyers wrote that Dana’s Railroad Supply wanted to “disclose the true cost of accepting credit cards” to customers of the model-railroad hobby shop.

“They want to put their sign back up without fearing criminal prosecution,” the document, posted on the website SCOTUSblog said. “They would like to truthfully tell their customers — ‘both at the entrance to (the) store and at the register so that there will be no surprise’ — that the store ‘will add a small fee onto the sale if they choose to pay by credit card, and that there will be no fee if they choose to pay with cash or debit.’ The other respondents (businesses) want to say the same.”

But in the June petition to the Supreme Court, Bondi’s office argued that the law deals with a “pricing practice” and is not a free-speech issue.

“This (Supreme) Court’s intervention is necessary to correct the 11th Circuit’s contravention of a well-established axiom of First Amendment law: Regulations of economic conduct do not implicate the First Amendment,” the petition said. “The surcharge statute, by prohibiting a particular pricing practice, is just such a regulation. If allowed to remain, the 11th Circuit’s holding to the contrary will obscure the bright line that this (Supreme) Court has drawn between speech and economic conduct and … will cast a First Amendment cloud over a variety of economic regulations.”

The News Service of Florida’s Jim Saunders contributed to this report.

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