The ghosts of dead economists and a century-old decision that many consider to be judicial activism at its worst hovered over the U.S. Supreme Court today as the justices heard arguments about whether a New York law prohibiting surcharges for credit-card purchases is unconstitutional. Justice Stephen Breyer did a lot of the talking in Expressions Hair Design v. Schneiderman, repeatedly expressing concern that by dragging constitutional questions into a fight over a state pricing law the court might open the door to a new wave of judicial interference in economic regulations. The court most famously did so with its 1905 decision Lochner v. N.Y., striking down a New York law limiting bakers to a 60-hour work week as violation of the 14th Amendment liberty of contract. Lochner ultimately wilted before the wave of state and federal economic regulations that accelerated in the New Deal and generations of law students have learned to regard it as an anomaly, although libertarians have tried to rehabilitate it in recent years.
“We are diving headlong into an area called price regulation,” Breyer said at one point. “The word I fear begins with an L and ends with an R; it’s called Lochner.” The merchants challenging New York’s law say it prohibits them from describing a higher price for credit-card purchases as a “surcharge,” even though they can offer a discount for cash. The two are identical in economic terms, but New York defends its law as reflecting the irrational belief of some consumers that a discount is preferable to a surcharge. Credit-card companies, not surprisingly, support the ban on “surcharges.” Justice Elena Kagan seemed to agree with New York, saying the law doesn’t implicate freedom of speech in any way. The law prohibits the practice of charging a higher price for credit, but not what merchants call it.
“I can imagine ways in which you might say that this is restricting speech, but that’s not it,” Kagan said. The enforcement history in New York suggests something more, however. Investigators for state and local prosecutors conducted sweeps in which they called about pricing and arrested merchants when they slipped up and failed to call a discount for cash by its proper name. One gas station operator was busted because his clerk described a nickel discount for cash as “paying more” for credit.
Read More : forbes.com/sites/danielfisher/2017/01/10/supreme-court-puzzles-over-speech-implications-of-ny-law-banning-surcharges-for-credit/#618c78f226d6