On February 11, a group of Florida retainers, including a jewelry store and hobby shop, filed an appeal before the Eleventh Circuit Court of Appeals that, in part, challenges Florida’s law prohibiting merchants from charging “swipe fees” on credit card sales.  According to the retailers, the state law is unconstitutional and violates the First Amendment because it criminalizes verbiage regarding credit card surcharges while, at the same time, allowing language about discounts for cash and debit purchases.  The retailers claim that the law draws a line based on words and labels, rather than economic realities, and is causing ongoing harm to the First Amendment rights of Florida merchants to fully inform consumers of the costs of credit.

In September 2014, the U.S. District Court for the Northern District of Florida ruled against the retailers and found the no-surcharge law constitutional. The court said that whether the law had legitimate or persuasive legislative goals was up to the Florida legislature, and such laws should be “subject only to rational-basis scrutiny.”

In their appellate brief, the retailers fired back against that conclusion, stating: “If you use dual pricing, you may tell your customers only that they are paying $2 less to pay without credit (a ‘discount’), not that they are paying $2 more to pay with credit (a ‘surcharge’) — even though they are paying $2 more for credit.  …  Liability thus turns on the words used to describe identical conduct – nothing else.”

New York is, according to the retailers, the only other state that adopted a criminal no-surcharge statute that was the same as Florida’s.  That law was struck down in 2013, however, when a judge found that it violated the First Amendment and was “constitutionally vague.”

Consumer rights groups filed amicus curiae briefs in support of the retailers in December 2014.  They argued that the law is actually hurting consumers, adding that, “[t]he purpose and practical effect of the no-surcharge rule is to conceal the underlying true costs of credit by spreading those costs among all consumers.”

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Photo of H. Scott Kelly H. Scott Kelly

Scott is a consumer data and privacy specialist. He regularly defends against data breach lawsuits and class action claims asserted under federal and state consumer-protection statutes (FCRA, FDCPA, TCPA, UCC, UDAAP, RICO). Scott represents companies on an array of data privacy issues, including

Scott is a consumer data and privacy specialist. He regularly defends against data breach lawsuits and class action claims asserted under federal and state consumer-protection statutes (FCRA, FDCPA, TCPA, UCC, UDAAP, RICO). Scott represents companies on an array of data privacy issues, including background screening, consumer reporting, data breaches, ransomware attacks, and related regulatory investigations by the Consumer Financial Protection Bureau (CFPB), Federal Trade Commission (FTC), and state attorneys general.

Photo of Michael E. Lacy Michael E. Lacy

Michael heads the firm’s Consumer Financial Services practice, and handles class actions and high-stakes consumer litigation on a nationwide basis. He represents banks, mortgage servicers, debt buyers and collectors, and lenders against claims under consumer protection statutes, including the FCRA, TCPA, RESPA, RICO,

Michael heads the firm’s Consumer Financial Services practice, and handles class actions and high-stakes consumer litigation on a nationwide basis. He represents banks, mortgage servicers, debt buyers and collectors, and lenders against claims under consumer protection statutes, including the FCRA, TCPA, RESPA, RICO, and state UDAP laws. He has significant experience litigating and trying corporate governance disputes, including shareholder derivative claims, corporate dissolution cases, and corporate divorce matters. Michael also represents public utility companies in litigation and regulatory matters, including condemnation and land use cases.