Yesterday, the U.S. Supreme Court held that New York State’s law preventing merchants from charging an additional fee for using a credit card (see our previous coverage here) regulates speech, and remanded the case to the Second Circuit to determine whether the law can survive First Amendment scrutiny. Judge Rakoff had initially ruled in favor of the merchants, but the Second Circuit found that the law was permissible as it only regulated the relationship between the two prices rather than speech.

In an opinion by Chief Justice Roberts, the Court found otherwise:

The law tells merchants nothing about the amount they are allowed to collect from a cash or credit card payer. Sellers are free to charge $10 for cash and $9.70, $10, $10.30, or any other amount for credit. What the law does regulate is how sellers may communicate their prices. A merchant who wants to charge $10 for cash and $10.30 for credit may not convey that price any way he pleases. He is not free to say “$10,with a 3% credit card surcharge” or “$10, plus $0.30 for credit” because both of those displays identify a single sticker price—$10—that is less than the amount credit card users will be charged. Instead, if the merchant wishes to post a single sticker price, he must display $10.30 as his sticker price. Accordingly, while we agree with the Court of Appeals that §518 regulates a relationship between a sticker price and the price charged to credit card users, we cannot accept its conclusion that §518 is nothing more than a mine-run price regulation. In regulating the communication of prices rather than prices themselves, §518 regulates speech.