The U.S. Supreme Court has agreed to decide whether state laws that prohibit merchants from imposing a surcharge on credit card purchases violate the First Amendment. The petition for certiorari granted by the Supreme Court sought review of the Second Circuit's 2015 decision in Expressions Hair Design v. Schneiderman, which held that New York’s "no credit card surcharge" law did not violate the First Amendment because it only regulated economic conduct, not speech.

The case will enable the Supreme Court to resolve a circuit split. Last year, a divided 11th Circuit panel ruled that Florida’s "no surcharge" law is an unconstitutional abridgement of free speech. However, earlier this year, a divided Fifth Circuit panel rejected a First Amendment challenge to Texas' "no surcharge" law on the grounds that it regulates pricing and only incidentally implicated speech.

The petition for certiorari observed that in addition to Florida, New York, and Texas, there are seven other states with "no surcharge" laws—California, Colorado, Connecticut, Kansas, Maine, Massachusetts, and Oklahoma—and that such laws allow merchants to charge higher prices to consumers who pay with a credit card instead of cash but require the merchant to communicate the price difference as a cash "discount" rather than a credit card "surcharge." The question presented by the petition for certiorari asked if these state laws "unconstitutionally restrict speech conveying price information (as the Eleventh Circuit has held), or do they regulate economic conduct (as the Second and Fifth Circuits have held)?" A number of major national merchants filed an amicus curiae brief in support of the petition for certiorari.

The complaint in Expressions Hair Design was filed by five merchants and their principals who alleged that New York's law is an unconstitutional restriction on speech because it does not allow merchants to tell customers that they are paying more for using credit than for using cash or another payment method. The plaintiffs claimed that labeling the price differential between a cash and credit purchase price as a "discount" rather than a "surcharge" is less effective in communicating to customers that credit cards are a more expensive means of payment and therefore less likely to deter a consumer from using credit.

The Second Circuit's analysis proceeded from its view that the plaintiffs were seeking First Amendment protection for a "single-sticker-price" scheme under which a merchant posts a single price for its goods and services but charges a higher price to credit card customers. The Second Circuit ruled that, as applied to such a single-sticker-price scheme, the law did not implicate the First Amendment because it regulated a pricing practice, not speech. According to the Second Circuit, the law "[b]y its terms…does not prohibit sellers from referring to credit-cash price differentials as credit-card surcharges, or from engaging in advocacy related to credit card surcharges; it simply prohibits imposing credit-card surcharges."