The U.S. Supreme Court on Wednesday unanimously held that a New York statute prohibiting merchants from imposing a surcharge on credit card purchases regulates merchants’ speech. Expressions Hair Design v. Schneiderman, No. 15-1391 (U.S. Mar. 29, 2017). With this new opinion, New York merchants – as well as merchants in other jurisdictions subject to similar laws – come one step closer to being able to advertise and charge consumers credit card surcharges.

The question before the Court hinged entirely on whether the statute regulated conduct or speech. The statute – N.Y. General Business Law § 518 – prohibits merchants from imposing surcharges on customers who choose to pay with a credit card instead of cash. In contrast, merchants are allowed to offer discounts to those paying in cash.

Defending its law, New York State argued that the statute regulates conduct, not speech. The U.S. Supreme Court disagreed, reversing an opinion from the U.S. Court of Appeals for the Second Circuit. In reaching its conclusion, the Supreme Court found that because the statute regulates "the communication of prices rather than prices themselves," it regulates speech. Using a quintessential New York merchant as an example, the Court reasoned that had the law required all delis in the state to charge $10 for a sandwich, the law would have regulated only conduct. Yet the Court noted that the law does not prevent merchants from charging $10 for a sandwich if the consumer pays by cash, while charging $10.30 for that same sandwich if the consumer chooses to pay by credit card; what the statute outlaws is calling that $10.30 price a credit card surcharge. As such, the Court remanded the case back to the Second Circuit to determine if the law runs afoul of the First Amendment.

This most recent opinion is the latest in a series of laws, decisions and trends in the market place affecting whether or how merchants may advertise and charge consumers credit card surcharges. In light of this opinion, several other states that have laws similar to New York's may see similar challenges. Further, the Supreme Court's broad view of what constitutes speech may have broader implications for others laws that purport to regulate sellers' conduct and pricing decisions, which could implicate the First Amendment under the Supreme Court's rationale. For now however, the fate of hungry New Yorkers craving a deli sandwich without having to pay a credit card surcharge rests with the Second Circuit on remand.