Merchants File Cert with Supreme Court Challenging State Surcharge Laws
A group of Texas merchants wants to take its battle against a Texas law prohibiting them from imposing a surcharge on customers paying with a credit card to the Supreme Court, arguing that the statute violates the merchants’ free speech rights. This legal battle involves the Texas state Office of Consumer Credit Commissioner (OCCC) and has been filed with the U.S. Supreme Court.
The basis of the merchants’ claim is that while Texas law prohibits them from imposing a surcharge on credit card transactions, it does not prohibit them from offering a discount to consumers who pay for goods and services in cash, which would result in the same ultimate economic effect on the consumer. Thus, according to the merchants, the Texas law in question impermissibly regulates their free speech by allowing them to charge customers differently depending on the method of payment the customer uses, so long as the resulting price difference is not referred to as a “surcharge” on credit card transactions.
The merchants’ decision to take the battle over Texas’ surcharge law to the Supreme Court comes on the heels of a ruling by the 5th Circuit Court of Appeals finding that Texas’ law constituted a limitation on the merchants’ conduct and not their speech. In their petition to the Supreme Court, the merchants stressed that the 5th Circuit’s decision widens an existing split in authority over the legality of state surcharge laws on First Amendment grounds, with courts in California and Florida striking such laws down, while courts in New York, and now the 5th Circuit, have upheld them.