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Expressions Hair Design v. Schneiderman - 137 S. Ct. 1144 (2017)

Rule:

While the United States Supreme Court agrees with the United States Court of Appeals for the Second Circuit that N.Y. Gen. Bus. Law § 518 regulates a relationship between a sticker price and the price charged to credit card users, the Supreme Court 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.

Facts:

In order to discourage the use of credit cards, merchants imposed a surcharge for such use. This practice was prohibite through the enactment of New York General Business Law § 518. Petitioner merchants, who were five New York businesses and their owners who wished to impose surcharges for credit card use, filed suit against defendant state officials, arguing that the law violated the First Amendment by regulating how they communicated their prices. The District Court ruled in favor of the merchants, holding that the law regulated speech, and violated the First Amendment under the Supreme Court’s commercial speech doctrine. The Court of Appeals vacated the District Court’s judgment with instructions to dismiss. The Court of Appeals concluded that in the context of single-sticker pricing—where merchants post one price and would like to charge more to customers who pay by credit card—the law required that the sticker price be the same as the price charged to credit card users. In that context, the law regulated a relationship between two prices. Relying on the Supreme Court's precedent holding that price regulation alone regulated conduct, not speech, the Court of Appeals concluded that § 518 did not violate the First Amendment. Petitioners challenged the decision of the appellate court.

Issue:

  1. Did New York General Business Law § 518 regulate speech?
  2. Did New York General Business Law § 518 violate the First Amendment?

Answer:

1) Yes. 2) The Court remands the case to the Court of Appeals to determine whether the regulation is unconstitutional.

Conclusion:

The Court held that New York General Business Law § 518, which prohibited merchants from imposing a surcharge based on use of a credit card, was a regulation of speech rather than conduct since the law regulated the manner in which merchants communicated their prices rather than regulating the prices themselves. Because the Court of Appeals concluded otherwise, it did not determine whether §518 survived First Amendment scrutiny. On remand the Court of Appeals should analyze § 518 as a speech regulation.

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