The New York Credit Union Association filed an amicus brief with the U.S. Supreme Court in support of New York’s ban on credit card surcharges. NYCUA strongly supports the ban, which was upheld by the U.S. Court of Appeals for the Second Circuit in the case Expressions Hair Design v. Schneiderman.
In the brief, NYCUA General Counsel Henry Meier and Vice President of Governmental Affairs Michael Lieberman explain that the state Legislature passed the surcharge ban based on the understanding that surcharges and discounts are separate pricing mechanisms, and not merely two words for the same conduct.
Meier and Lieberman state that the ban does not regulate what merchants can say about the pricing structure. Rather, they write, “no-surcharge laws are economic regulations that do not infringe on merchants’ rights of Free Speech, and petitioners cannot invoke the First Amendment to accomplish in the Supreme Court what must be done in the chambers of Congress or state legislatures.”
The two go on to argue that:
- in countries where they are authorized, surcharges inevitably become a source of merchant revenue instead of a mechanism to recoup transaction costs;
- merchants exercise monopoly control over how large a surcharge consumers pay;
- credit card surcharges promote misleading pricing tactics and dubious marketing schemes;
- banning “excessive surcharges” will not protect consumers from the negative consequences of surcharging;
- New York anticipated the negative consequences of surcharging experienced in other countries; and
- consumers do not construe pricing as merchant expression.
The brief concludes by urging the court to affirm the judgment of the appeals court.
To view the full brief, visit NYCUA’s website.