## Facts

- New York General Business Law § 518 prohibited a seller from imposing a “surcharge” on customers who choose to pay by credit card rather than cash, check, or similar means.
- Credit-card networks charge merchants a per-transaction fee; merchants may pass that cost to consumers either by adding a credit-card surcharge or offering a cash discount.
- Several New York merchants sought to use “single-sticker pricing,” posting a cash price and then adding an additional percentage or amount for credit-card payments (e.g., “$10, plus 3% if you pay by credit card”).
- The merchants contended that § 518 did not bar charging different cash and credit prices, but barred describing the difference as a “surcharge,” while allowing economically equivalent framing as a “discount.”
- The merchants sued state enforcement officials, alleging § 518 violated the First Amendment (commercial speech) and was unconstitutionally vague under the Fourteenth Amendment.
- The district court ruled for the merchants, finding the law both speech-restrictive and vague.
- The Second Circuit reversed, characterizing § 518 (as applied to single-sticker pricing) as regulating a relationship between two prices (conduct), not speech.
- The Supreme Court granted certiorari, limited its review to the merchants’ single-sticker pricing scheme, and addressed whether § 518 regulates speech or conduct.

## Issues

1. Whether § 518, as applied to a single-sticker pricing scheme, regulates speech (how prices are communicated) rather than economic conduct (the prices charged), thereby implicating the First Amendment.
2. Whether the lower court should evaluate § 518 under First Amendment scrutiny once it is treated as a speech regulation.
3. Whether § 518 is unconstitutionally vague as applied, given the statute’s reliance on the “surcharge” label and lack of statutory definitions.

## Decision

- The Supreme Court unanimously vacated the Second Circuit’s judgment and remanded.
- The Court held that § 518, as interpreted and applied in this case, regulates speech because it controls how merchants may communicate prices rather than setting or limiting the prices they may charge.
- The Court did not decide whether § 518 violates the First Amendment or is void for vagueness; it remanded for the Second Circuit to apply the appropriate constitutional analysis under the correct characterization of the statute as regulating speech.
- Justice Breyer concurred in the judgment, expressing concern about rigid speech/conduct categorization in economic regulation.
- Justice Sotomayor, joined by Justice Alito, concurred in the judgment, emphasizing uncertainty about authoritative state-law interpretation and suggesting certification to the state high court could have been useful.

## Legal Principles

- A law may implicate the First Amendment when it regulates the communication of prices, even if the economic outcome (what customers pay) could be achieved through alternative labeling.
- Price controls typically regulate conduct, but a statute that leaves the amounts collectable unchanged while restricting the permitted description of equivalent price differentials is a speech regulation.
- When the Court resolves an antecedent legal characterization (speech versus conduct) but the constitutional merits require further analysis, it may vacate and remand for lower courts to apply the proper First Amendment test and reconsider related vagueness arguments.

## Conclusion

The Court treated New York’s credit-card surcharge prohibition, as applied to single-sticker pricing, as a regulation of commercial speech because it restricts how merchants describe lawful price differences; it vacated the judgment and remanded for First Amendment scrutiny and further consideration of vagueness.


Expressions Hair Design v. Schneiderman, 581 U.S. 37 (2017)