# Amicus Curiae Brief — Expressions Hair Design v. Schneiderman, 137 S. Ct. 30 (2016) (No. 15-1391)

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0666%3A08

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2016

## Text

RECORD
AND Supreme Coun. Us. |
BRIEFS ae

No. 15-1391 JUN - 7 2016
CE OF ETT

In the Supreme Court of the United States

EXPRESSIONS HAIR DESIGN, et al.,

Petitioners,
Vv.

ERIC T. SCHNEIDERMAN, et ai..
Respondents

On Petition for Writ of Certiorari to the United States
Court of Appeals for the Second Circuit

BRIEF OF AMICUS CURIAE THE MARION B. BRECHNER
FIRST AMENDMENT PROJECT
IN SUPPORT OF PETITIONERS

CLAay CALVERT

Counsel of Record
Marion B. BRECHNER
First AMENDMENT PROJECT
2060 Weimer Hal!
Gainesville, FL 32611
(352) 273-1096
ccalvert@jou.ufl.edu

Counsel for Amicus Curiae

June 7, 2016

Becker Gallagher - Cincinnati, OH - Washington, D.C. - 800.890.5001

i
TABLE OF CONTENTS

TABLE OF AUTHORITIES ...................

IDENTITY AND INTEREST OF
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SUMMARY OF ARGUMENT ..................

I. The Right to Receive Speech is a Fundamental
Corollary of the Right to Speak ..............

II. New York General Business Law § 518 Violates,
in Paternalistic Fashion, the First Amendment
Right of Consumers to Receive Truthful
Information that Affects Their Purchasing
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TABLE OF AUTHORITIES

CASES
44 Liquormart, Inc. v. Rhode Island,

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American Meat Inst. v. U.S. Dep’t Agriculture,

oo gy Bb fi Legs > | | reer 7
Bulldog Investors Gen. P’ship v. Sec’y of

Commonwealth,

953 N.E.2d 691 (Mass. 2011)................ 7
Expressions Hair Design v. Schneiderman,

808 F.3d 118 (2d Cir. 2015) ............... 3,9
Griswold v. Connecticut,

eee 5,6
Martin v. City of Struthers,

ee nes Ce ea eS 2
Spargo v. New York State Comm’n on Judicial

Conduct, 351 F.3d 65 (2d Cir. 2003) .......... 2
Stanley v. Georgia,

ES 2 2 brs Gait a eg) Uk ahh 6
Va. State Bd. Pharmacy v. Va. Citizens Consumer

Council, Inc., 425 U.S. 748 (1976) ...... 3, 6, 7,8
Winters v. New York,

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FEDERAL CONSTITUTION

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STATUTES

Cal. Civ. Code § 1748.1(a) (2016) ............... 5
Pa Oe ES GUE ie widen ks ceetiede weds 5
N.Y. Gen. Bus. Law § 518 (2016) ............. 2,8
Tex. Fin. Code § 339.001 (2016) ................ 5
OTHER AUTHORITIES

Derek E. Bambauer, Shopping Badly: Cognitive
Biases, Communications, and the Fallacy of the
Marketplace of Ideas, 77 U. Colo. L. Rev. 649
le ate) att arate catets reich ele aera 8

Marc J. Blitz, Constitutional Safeguards for Silent
Experiments in Living: Libraries, the Right to
Read, and a First Amendment Theory for an
Unaccompanied Right to Receive Information, 74

CJR) Shs , CUP GUD ove hoes dew eesv esse 5

Jennifer A. Chandler, A Right to Reach an
Audience: An Approach to Intermediary Bias on
the Internet, 35 Hofstra L. Rev. 1095 (2007) .... 3

Adam Levitin, The Antitrust Super Bowl: America’s
Payment Systems, No-Surcharge Rules, and the
Hidden Costs of Credit, 3 Berkeley Bus. L.J. 265
Syren ek See ks ECE a eee 9

Alison M. Newman, Note: Doing the Public a
Disservice: Behavioral Economics and
Maintaining the Status Quo, 64 Duke L.J. 1173
SE ek aa wick Sia es eu Rash adoe ark oe te eal 4

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Robert C. Post, Viewpoint Discrimination And
Commercial Speech, 41 Loy. L.A. L. Rev. 169
EEE a Selatan te ate tee uhe a eel ate ea Sade ela we eee

Jonathan Slowik, Comment: Credit CARD Act II:
Expanding Credit Card Reform by Targeting
Behavioral Biases, 59 UCLA L. Rev. 1292 (2012)

ee, LS ee ee ee, ee ee ee i Es aa ee ee aa me a a ee ee. ee ee ane a ee

Rodney A. Smolla, Free Speech in an Open Society
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IDENTITY AND INTEREST OF AMICUS CURIAE'’

The Marion B. Brechner First Amendment
Project is a nonprofit, nonpartisan organization
located in the College of Journalism and
Communications at the University of Florida in
Gainesville. Directed by professor and attorney Clay
Calvert, the Project is dedicated to contemporary issues
of free expression, including current cases and
controversies affecting freedom of information and
access to information, freedom of speech, freedom of
press, freedom of petition, and freedom of thought.
This case presents issues affecting freedom of speech —
namely, both the First Amendment right of merchants
to speak and the First Amendment right of consumers
to receive speech.

The Project’s arguments thus may assist the Court
in deciding this matter. As an organization dedicated
to research into First Amendment rights, and advocacy
in support of such rights — though one with no direct
stake in the outcome of this case — the Project is well-
positioned to offer this Court information about issues
affecting the First Amendment speech rights of both
merchants and consumers.

' Pursuant to Rule of Court 37.6, amicus curiae states that no
counsel for a party authored this brief in whole or in part, and no
counsel or a party made a monetary contribution intended to fund
the preparation or submission of this brief. No person other than
amicus curiae or its counsel made a monetary contribution to its
preparation or submission. Counsel of record received timely
notice of the intent to file this brief under this Rule, and the
parties have provided written consent for the filing of this brief.

2
SUMMARY OF ARGUMENT

Retail transactions involve merchants § and
consumers. Conversations involve speakers and
listeners. This case melds both kinds of relationships,
involving merchants as otherwise willing speakers and
consumers as. otherwise willing listeners.
Unfortunately, here the merchants are not allowed to
speak as they wish and the consumers, in turn, are
prohibited from receiving important information from
merchants.

Amicus curiae argues that New York General
Business Law § 518 interferes with the First
Amendment speech nmghts of two groups of
stakeholders in the Empire State — merchants and
consumers — not merely one. Specifically, the statute
detrimentally affects not only the right of merchants to
freely communicate truthful pricing information
regarding surcharges to their consumers, but it also
hinders the reciprocal and derivative First Amendment
right of consumers to receive truthful information that
may directly influence their personal decision making
and spending choices regarding how to pay for products
and use finite fiscal resources.

There is a rich and lengthy tradition of protecting
the right to receive speech in First Amendment
jurisprudence, both at the level of this Court and that
of the federal appellate circuit from which this cases
arises. See Martin v. City of Struthers, 319 U.S. 141,
143 (1943) (observing that the First Amendment.
“necessarily protects the right to receive” literature);
Spargo v. New York State Comm’n on Judicial
Conduct, 351 F.3d 65, 83 (2d Cir. 2003) (“it is well-
established that the First Amendment protects not only

3

the right to engage in protected speech, but also the
right to receive such speech”). Indeed, “courts have
recognized in a variety of contexts that a right to free
speech is not held just by speakers. Listeners, too, have
a First Amendment right to receive speech.” Jennifer
A. Chandler, A Right to Reach an Audience: An
Approach to Intermediary Bias on the Internet, 35
Hofstra L. Rev. 1095, 1100 (2007).

Of particular importance for this case, one such
context where the First Amendment right to receive
speech is paramount is the realm of commercial speech.
As this Court wrote four decades ago, “lajs to the
particular consumer’s interest in the free flow of
commercial information, that interest may be as keen,
if not keener by far, than his interest in the day’s most
urgent political debate.” Va. State Bd. Pharmacy v. Va.
Citizens Consumer Council, Inc., 425 U.S. 748, 763
(1976).

Amicus thus concentrates on the First Amendment
right of consumers to receive speech in Expressions
Hair Design and, specifically, to hear a higher price
imposed for a credit-card purchase as involving a
surcharge. Amicus asserts that New York’s no-
surcharge law inhibits the free flow of accurate pricing
information to consumers and, in doing so, keeps them
ignorant about the reality of swipe fees and surcharges
and, ultimately, the actual cost of credit.

Such fiscal ignorance may be anything but bliss for
consumers when New York merchants choose to charge
two prices for the same product (a higher one for credit
card purchases and a lower one for cash purchases).
That’s because research indicates that, due to cognitive
perceptual biases, consumers respond quite differently

4

to the labels “surcharge” and “discount.” See Jonathan
Slowik, Comment: Credit CARD Act Il: Expanding
Credit Card Reform by Targeting Behavioral Biases, 59
UCLA L. Rev. 1292, 1328 (2012) (“consumers react
much less intensely to discounts than they do to
surcharges’). The way consumers respond to truthful
pricing information depends, in brief, on how it is
framed, including which price is framed as the baseline
or anchor point for the “regular” price and whether a
change or deviation from it is framed as an addition or
subtraction. See Alison M. Newman, Note: Doing the
Public a _ Disservice: Behavioral Economics and
Maintaining the Status Quo, 64 Duke L.J. 1173, 1190
(2015) (“A cash discount does not feel like a loss to
credit-card users; it is instead perceived as a forgone
gain. If, however, the payment were framed as a charge
for using a card, the consumer would view it as a loss
because he would be paying more than the baseline
cost paid by cash consumers”).

This raises the critical question of whether
consumers have a reciprocal First Amendment right to
receive truthful information as framed and intended by
merchant-speakers, without the government of New
York placing a thumb on the scale of free expression
that permits framing price information only in the
manner it paternalistically deems acceptable. Amicus
contends that consumers possess an unenumerated
First Amendment right to receive truthful speech from
those with whom they choose do business that
describes the cost of credit as a credit-card surcharge.

Amicus thus respectfully requests that this Court
grant the petition for writ of certiorari to decide
whether no-surcharge laws like that in New York, as

5

well as similar ones in other populous states, including
but not limited to California (Cal. Civ. Code
§ 1748.1(a)), Florida (Fla. Stat. § 501.0117 (2016)), and
Texas (Tex. Fin. Code § 339.001 (2016)), violate the
First Amendment right of consumers to receive
truthful information that affects their personal, fiscal
decision making.

ARGUMENT

I. The Right to Receive Speech is a Fundamental
Corollary of the Right to Speak

Professor Marc Blitz explains that a listener’s right
to receive information “is simply the mirror image of
the speaker’s right to express it. And the First
Amendment cannot protect one without meaningfully
protecting the other.” Marc J. Blitz, Constitutional
Safeguards for Silent Experiments in Living: Libraries,
the Right to Read, and a First Amendment Theory for
an Unaccompanied Right to Receive Information, 74
UMKC L. Rev. 799, 809 (2006). Indeed, without both a
listener and a speaker, the free speech guarantee is, in
the words of First Amendment scholar and current
Delaware Law School Dean Rodney Smolla, “as empty
as the sound of one hand clapping.” Rodney A. Smolla,
Free Speech in an Open Society, 198 (1992).

The First Amendment right to receive speech,
however, is not merely the conjecture of academics and
scholars. In fact, it is well established in this Court’s
jurisprudence.

More than fifty years ago, this Court wrote that
“It|}he right of freedom of speech and press includes not
only the right to utter or to print, but the right to
distribute, the mght to receive .. .” Griswold v.

6

Connecticut, 381 U.S. 479, 482 (1965). It struck down
the stavute in Griswold, which harmed the free flow of
“information, instruction, and medical advice to
married persons as to the means of preventing
conception.” Jbid. at 480.

Four years later, this Court concluded, in holding
unconstitutional a state statute that banned the
possession of obscenity, that “ijt is now well
established that the Constitution protects the right to
receive information and ideas.” Stanley v. Georgia, 394
U.S. 557, 564 (1969). It added then that “[t|his right to
receive information and ideas, regardless of their social
worth, see Winters v. New York, 333 U.S. 507, 510
(1948), is fundamental to our free society.” [bid.

In 1976, this Court reiterated the importance of the
right to receive speech, noting that when there is a
willing speaker, the First Amendment “protection
afforded is to the communication, to its source and to
its recipients both.” Va. State Bd. of Pharmacy v. Va.
Citizens Consumer Council, Inc., 425 U.S. 748, 756
(1976). Critically, the Virginia statute banned the
ability of licensed pharmacists to convey to consumers,
via direct or indirect advertising, truthful and factual!
price information about prescription drugs. Jbid. at
750, n.2. The law was challenged by “prescription drug
consumers.” /bid. at 753. They argued “that the First
Amendment entitles the user of prescription drugs to
receive information that pharmacists wish _ to
communicate to them through advertising and other
promotional means, concerning the prices of such

drugs.” Ibid. at 754.

The Court determined that, “[a]s to the particular
consumer's interest in the free flow of commercial

7

information, that interest may be as keen, if not keener
by far, than his interest in the day’s most urgent
political debate.” Jbid. at 763. The Court therefore
struck down the Virginia statute so that consumers
could make better informed choices when purchasing
drugs, remarking that “|slo long as we preserve a
predominantly free enterprise economy, the allocation
of our resources in large measure will be made through
numerous private economic decisions. It is a matter of
public interest that those decisions, in the aggregate,
be intelligent and well informed.” /bid. at 765.

The Virginia State Board of Pharmacy decision laid
the foundation for a commercial speech doctrine under
which, as current Yale Law School Dean Robert Post
describes it, “|clommercial speech is protected so that
citizens can receive information.” Robert C. Post,
Viewpoint Discrimination and Commercial Speech, 41
Loy. L.A. L. Rev. 169, 177 (2007). Indeed, the
consumer’s interest in the free flow of information has
been this Court’s “longstanding focus, in_ the
commercial speech area.” American Meat Inst. v. U.S.
Dep't Agriculture, 760 F.3d 18, 29 (D.C. Cir. 2014). As
the Supreme Judicial Court of Massachusetts recently
wrote, the “interests of consumers in receiving
commer .al information, and the interests of society in
the fre. flow of such information, have been the
foundation of commercial speech doctrine from its
inception.” Bulldog Investors Gen. P’ship v. Sec’y of
Commonwealth, 953 N.E.2d 691, 716 (Mass. 2011).

This Court has observed, in turn, that “[t]he First
Amendment directs us to be especially skeptical of
regulations that seek to keep people in the dark for
what the government perceives to be their own good.”

8

44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 503
(1996).

Il. New York General Business Law § 518
Violates, in Paternalistic Fashion, the First
Amendment Right of Consumers to Receive
Truthful Information that Affects Their
Purchasing Decisions

Unfortunately, by permitting the framing of price
information in only the manner the government of New
York deems fit, consumers are kept in the dark about
the cost of credit. This is particularly troubling
because research suggests that when consumers are
made aware of surcharges imposed when paying with
credit cards, they tend to avoid paying with credit
cards. That is because a surcharge is perceived as a
loss of money.

One article, for example, points out that “when
considering the relative costs of two forms of payment,
consumers readily accept a ‘discount for cash’ but are
offended by a ‘surcharge for credit card use.’ The
critical difference is selecting either the higher or lower
price as the anchor for evaluation, particularly since
consumers value avoiding losses more than potential
gains. Thus, commercial entities can influence our
behavior as consumers by framing how we perceive
their actions.” Derek E. Bambauer, Shopping Badly:
Cognitive Biases, Communications, and the Fallacy of
the Marketplace of Ideas, 77 U. Colo. L. Rev. 649, 684
(2006). Another article asserts that credit card
companies prefer use of the term “discount” and would
rather bury the word “surcharge” because “consumers
perceive a discount as a gain, but a surcharge as a
penalty and will prefer to use another payment system

9

rather than be penalized for using credit.” Adam
Levitin, The Antitrust Super Bowl: America’s Payment
Systems, No-Surcharge Rules, and the Hidden Costs of
Credit, 3 Berkeley Bus. L.J. 265, 281 (2006).

In a nutshell, prohibiting the free flow of
information to consumers about surcharges imposed on
credit card purchases keeps consumers in the dark
about the hidden costs of credit. No-surcharge laws
thus manipulate consumers’ cognitive biases by
concealing information from them. The Second Circuit,
however, gave this short shrift, writing that “(t]he First
Amendment poses no obstacle” to a no-surcharge law
“spurring demand for credit-card use.” Expressions
Hair Design v. Schneiderman, 808 F.3d 118, 133 (2d
Cir. 2015).

The bottom line here is, indeed, the financial bottom
line: consumers have a First Amendment right to
receive truthful information as disclosed and framed in
a manner that merchants see fit — not only in the
manner the government deems acceptable — in order to
make better informed decisions about how they spend
their money. New York’s no-surcharge law
paternalistically keeps them in the dark to the benefit
of credit card companies. The First Amendment right
of consumers to receive truthful commercial speech
must not be lost or forgotten in Expressions Hair
Design. This case thus provides the Court with a prime
opportunity to return the commercial speech doctrine
to its original foundation: to facilitate “the free flow of
commercial information” among citizens, thereby
“enlighten[ing] public decisionmaking in a democracy.”
Va. State Bd. of Pharmacy v. Va. Citizens Consumer
Council, Inc., 425 U.S. 748, 764—65 (1976).

10

CONCLUSION

For the reasons set forth above, Amicus respectfully
requests that this Court grant Petitioners’ Petition for
a Writ of Certiorari and decide whether no-surcharge
laws like that in New York and similar ones in other
populous states, including but not limited to Florida,
California and Texas, not only violate the First
Amendment speech rights of merchants, but also
violate the First Amendment rights of consumers to
receive truthful information that affects their personal,
fiscal decision making.

Respectfully submitted,

Clay Calvert

Counsel of Record
Marion B. Brechner
First Amendment Project
2060 Weimer Hall
Gainesville, FL 32611
(352) 273-1096
ccalvert@jou.ufl.edu

Counsel for Amicus Curiae

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0666%3A08. Public record. Not legal advice.