Expressions Hair Design v. Schneiderman

In March 2017, the United States Supreme Court ruled in Expressions Hair Design v. Schneiderman. The case challenged a New York state law that prohibited merchants from imposing a surcharge on credit card purchases but allowed them to offer a cash discount. A group of merchants, including Expressions Hair Design, argued that this law violated their First Amendment rights by unconstitutionally restricting how they could communicate pricing information to their customers. The Second Circuit Court of Appeals had upheld the law as a regulation of economic conduct, not speech. The Supreme Court vacated this decision, holding that the statute regulated speech because it determined how merchants described the price difference between cash and credit. The Court did not declare the law unconstitutional but remanded the case for the lower courts to determine whether the speech restriction could survive First Amendment scrutiny.

The United States Supreme Court vacated the judgment of the Second Circuit and remanded the case. The Court held that the New York law regulated speech, not just conduct, and directed the lower courts to determine in the first instance whether the law violates the First Amendment. No definitive ruling on the statute's overall constitutionality was made by the Supreme Court.

The central dispute was whether New York General Business Law § 518, which bans credit card surcharges but permits cash discounts, regulates constitutionally protected commercial speech under the First Amendment or merely regulates economic conduct, and therefore whether it is subject to heightened judicial scrutiny.

The decision drew a significant line between economic conduct and commercial speech under the First Amendment, potentially affecting how states structure consumer pricing regulations across the country. It empowered merchants to challenge similar surcharge bans as unconstitutional restrictions on truthful communication, thus influencing business practices, payment methods, and consumer awareness regarding transaction costs.