Expressions Hair Design v. Schneiderman
The Court ruled that New York's ban on credit-card surcharges does regulate speech, not just prices, because it controls how merchants describe their prices rather than what they can charge.
The case was sent back to the lower appeals court to decide, for the first time, whether that speech regulation actually violates the First Amendment. The ruling matters because similar no-surcharge laws exist in several states and affect how millions of small businesses can talk to customers about credit-card fees.
How it got here: A federal trial court ruled for the merchants on First Amendment and vagueness grounds; the Second Circuit vacated that ruling and ordered dismissal, prompting the merchants to seek Supreme Court review.
The Case in Depth
What happened
Five New York businesses wanted to charge customers more when they paid with a credit card, to cover the processing fees credit card companies charge merchants. A New York law, Section 518, bars merchants from imposing a "surcharge" on credit-card users. The merchants sued the state's attorney general and local prosecutors, arguing the law improperly restricted how they could describe and display their prices.
The question before the Court
Could New York ban businesses from telling customers about a credit-card surcharge, or does that cross into regulating their speech under the First Amendment?
The Court's answer
Yes — the Court ruled that New York's ban on credit-card surcharges regulates speech, not just conduct. A typical price law simply caps what a business can charge; this law instead tells merchants how they may describe the difference between their cash and credit-card prices, permitting some phrasings ("$10.30 for credit") while banning others ("$10, plus a 30-cent surcharge") even though both convey the same underlying price difference. Because the law targets the communication of prices rather than the prices themselves, it counts as a speech regulation.
The Court did not go on to decide whether that speech regulation is actually unconstitutional. It sent the case back to the Second Circuit to weigh the law against First Amendment commercial-speech standards for the first time, and it also rejected the merchants' separate claim that the law was too vague, since it clearly bars the specific pricing display they wanted to use.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Small businesses that want to charge extra for credit-card payments—and explain that charge to customers—now know that laws restricting how they describe that charge implicate the First Amendment. Merchants in states with similar surcharge bans may have new grounds to challenge those laws, though this ruling does not yet say whether such laws are unconstitutional.
What changes now
The case returns to the Second Circuit, which must now decide for the first time whether New York's surcharge law survives First Amendment scrutiny as a speech regulation—for example, under the commercial-speech test or as a permissible disclosure requirement. The Supreme Court did not decide that ultimate constitutional question, and the law remains in effect for now while that analysis proceeds.
What this does not decide
The Court did not decide whether New York's law is unconstitutional, only that it regulates speech rather than conduct. It also limited its review to the single-sticker pricing scheme the merchants said they wanted to use, leaving open how the law applies to other pricing displays, such as posting separate cash and credit prices.
Concurrences and dissents
Concurrence — Justice Breyer
Justice Breyer agreed the law affects speech but argued the Court should avoid drawing a sharp line between 'speech' and 'conduct' at all, since nearly all regulation touches speech. He would instead ask directly which level of First Amendment scrutiny applies based on the interests at stake, and agreed remand was needed because the statute's actual scope remains unclear.
Concurrence — Justice Sotomayor
Justice Sotomayor argued the majority's approach left the case only half-resolved, deciding one part of the challenge while leaving the statute's broader meaning unsettled. She would have vacated and instructed the Second Circuit to certify the question of what §518 actually prohibits to the New York Court of Appeals, so the entire dispute could be resolved at once rather than piecemeal.
How the Court got there
The legal reasoning, step by step
- The Court first narrowed the scope of review to the one pricing scheme the merchants actually said they wanted to use: posting a single cash price alongside a separate credit-card surcharge, rather than any broader hypothetical pricing method.
- Because the Second Circuit's reading of an ambiguous term in state law was not 'clearly wrong,' the Court deferred to that interpretation, concluding that the New York law bars a merchant who posts one sticker price from charging credit-card customers more than that posted price.
- The Court then addressed whether the law regulates speech or only conduct. It rejected the view that this was an ordinary price control, reasoning that a true price regulation tells a seller how much it may collect, while this law instead dictates how a seller may describe the price difference between cash and credit transactions.
- Because the law restricts how prices are communicated rather than what may be charged, the Court held that it regulates speech, triggering First Amendment scrutiny that the lower court had never applied.
- Having found no ambiguity about which speech the law bars, the Court rejected the merchants' separate claim that the law was too vague to understand, since a party whose intended speech is clearly forbidden cannot also claim the law is impermissibly unclear.