Florida's 11th Circuit strikes down credit card surcharge law

By Amy Pennza | Mar 24, 2016

MIAMI – A recent decision from the 11th Circuit Court in Florida could have a big impact on credit card transactions in the state.

MIAMI – A recent decision from the 11th Circuit Court in Florida could have a big impact on credit card transactions in the state.

The court struck down a state law prohibiting retailers from charging credit card surcharges, ruling the law is unconstitutional because it restricts speech under the First Amendment. The court ruled 2-1 that the law wrongfully criminalized the use of language about credit card surcharges while allowing language about cash discounts. The court sided with Florida retailers, ruling that “surcharge” and “discount” are the same.

“The statute targets expression alone,” the court stated in its opinion. “More accurately, it should be a 'surcharges-are-fine-just-don’t-call-them-that law.’ We rule today only on a law that, though it purports to regulate commercial behavior, has the sole effect of banning merchants from uttering the word surcharge, criminalizing speech that is neither false nor misleading."

Florida business lawyer Meredith Delcamp has analyzed the court’s decision and says it could mean big changes for Florida business owners.

“I believe that this case will have an impact on the way Florida landlords and business owners run their businesses,” she wrote in a statement to Legal News Line. “For example, while some business establishments have worked around the law by offering ‘cash discounts’ to their customers, many other Florida business owners are simply charging their customers a flat rate, but paying the surcharge themselves without passing it along to the customers.”

An appeal to the Florida Supreme Court could mean a reversal of the lower court’s decision. If the decision sticks, however, it would likely save retailers money.

According to Delcamp: “If the Supreme Court upholds the appellate court’s ruling, it may change the way Florida landlords and business owners charge for their products, potentially giving some Florida business owners relief, allowing them to pass along the credit card surcharge directly to the customers. At that same time, consumers should be aware that in some instances, they may start having to pay additional costs associated with using their credit cards.”

Delcamp said the case could also impact similar laws in other states.

“The message is that the courts are taking a practical and very detailed review of the laws that regulate commerce and economics,” she stated. “This is interesting because it tells me that the courts are taking these matters seriously, giving it a thoughtful and detailed analysis. Other states should consider more carefully the practical and constitutional implications when they create similar economic regulations.”

The case is Dana’s Railroad Supply et al. v. Bondi, case number 14-14426, in the U.S. Court of Appeals for the Eleventh Circuit.

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