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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0666%3A29

## Record

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

## Text

No. 15-1391

IN THE

Supreme Court of the Anited States

EXPRESSIONS HAIR DESIGN, et al.,
Petitioners,
Vv.
ERIC T. SCHNEIDERMAN, in his official capacity as
Attorney General of the State of New York, et al.,
Respondents.

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

BRIEF OF LABOR, ENVIRONMENTAL, AND CIVIL
RIGHTS ORGANIZATIONS AS AMICI CURIAE
SUPPORTING RESPONDENTS

JUDITH A. SCOTT STACEY LEYTON

NICOLE G. BERNER Counsel of Record
JENNIFER HUNTER REBECCA LEE

SERVICE EMPLOYEES ALTSHULER BERZON, LLP
INTERNATIONAL UNION 177 Post St., Ste. 300
1800 Mass. Ave., N.W. San Francisco, CA 94108
Washington, DC 20036 (416) 421-7161

(202) 730-7383 sleyton@altber.com

CLAIRE PRESTEL
JAMES & HOFFMAN, P.C.
1130 Conn. Ave., N.W., Ste. 950

Washington, D.C. 20036
(202) 496-0500

i

TABLE OF CONTENTS

INTERESTS OF AMICI CURIAE ............00000.c0c00ecee0es l
INTRODUCTION AND SUMMARY OF

EE ibis tchiincainccncacsanmniseediminieiniiciatasinibainastionts —
I tris bitcenprinetnniiinitienlinaiahinibiniihiemavas enenenes 7

I ADECISION INVALIDATING
SECTION 518 WOULD UNDERMINE
SETTLED DOCTRINE AND
SUBJECT ORDINARY SOCIAL AND
ECONOMIC REGULATION TO
CONSTITUTIONAL CHALLENGE. ............ 7

A. The conduct-speech distinction is
settled law and serves important
IIIS cacnscutenneiinncesinktnatdiininaknctbeeserwese sent 7

B. Invalidating section 518 would
undermine the conduct-speech

a ne ke 2 le 12

C. A ruling that section 518 regulates speech
would enmesh courts in policy
disputes best left to the legislative

D. A ruling for Petitioners would
invite constitutional challenges to a
wide swath of ordinary cconomic
and social legislation.......................-..-.-- 20

ll. EVEN IF SECTION 5181S
INTERPRETED AS A REGULATION
OF SPEECH, IT SHOULD BE
SUBJECT TO DEFERENTIAL
STINTS wicitniecintbiphicineiltthinisisintasessiahinrtionincicmwenainsants 26

a5

A. For good reason, this Court has
long held that commercial speech
merits lesser a than
political speech...

B. Overturning this Court's well-
established commercial speech
doctrine, as Petitioners’ amici urge,
would be a dangerous and
unwarranted departure from
longstanding precedent.........................-

IIE ceiictccncssesnevevsscevsnnssccsinesneneennssscocncusncses

—

il

TABLE OF AUTHORITIES
CASES
44 Liquormart, Inc. v. Rhode Island, 517 U.S.
Pe iciccscetrenn te aieianaadinlaiiae 9, 14, 15, 27
Am. Fed’n of Labor v. Am. Sash & Door Co., 335
TEAL BSE Ee An a, 17, 19
Arcara v. Cloud Books, Inc., 478 U.S. 697 (1986)...... 8

Bd. of Trustees of State Univ. of N_Y. v. Fox, 492
| ECE: =) TF

Boy Scouts of Am. v. Dale, 530 U.S. 640 (2000) ....... 16
Cal. Motor Transp. Co. v. Trucking Unlimited,

i cticcdseniiicintiiinsbnmenennnniancens 18, 19
Central Hudson Gas & Elec. Corp. v. Pub. Serv.

Comm'n of N_Y., 447 U.S. 557 (1980).......... passim
Clark v. Martinez, 543 U.S. 371 (2005).................... 14
DeAngelis v. El Paso Mun. Police Officers Ass'n,

61 F.3d 591 (6th Cir. 1998).................000000+ asin 21
Edenfield v. Fane, 507 U.S. 761 (1993).............. 26, 27
Edwards v. District of Columbia, 755 F.3d 996

Ree ree 25
Friedman v. Rogers, 440 U.S. 1 (1979)..................... 28
Giboney v. Empire Storage & Ice Co., 336 U.S.

I ctiiciniietiginsiemncneationignimmiannnti 7, 10, 13, 14
Intl Franchise Ass'n, Inc. v. City of Seattle, 803

ES SS ST sen cerisecneunuiasmnmebantintnnnetiente 23
Kagan v. City of New Orleans, 753 F.3d 560 (5th

BE nical hac ocnstecienet ie cencetnndieiecininnniniclammenaenite 25

Liberty Coins, LLC v. Goodman, 748 F.3d 682
I TTI soc cecsinsinaid etiesinelimiamtibapiidiiunaenmeneuants 23

lv

Lochner v. New York, 198 U.S. 45 (1905)......... passim
Lorillard Tobacco Co. v. Reilly, 533 U.S.

RE EAS AERA ae a ce 27
Lowe v. SEC, 472 U.S. 181 (1985) .......0.000-.-. 23, 24, 25
Milavetz, Gallop & Milavetz, PA v. United

States, 559 U.S. 229 (2010)................0.0.-00.2.. 28, 29
Munn v. Illinois, 94 U.S. 113 (1877)......................... 11
N. Dakota State Bd. Of Pharm. v. Snyder's

Drug Stores, Inc., 414 U.S. 156 (1973).......... 19, 20
Nebbia v. New York, 291 U.S. 502 (1934) .......... 11, 17
New State Ice Co. v. Liebmann, 285 U.S.

ns eeceinavebi 34
Nordyke v. Santa Clara Cty., 110 F.3d 707

EET 22, 23
Obergefell v. Hodges, 135 S. Ct. 2584 (2015)............ 20
Ohralik v. Ohio State Bar Ass'n, 436 U.S.

I i lnindintibbicemsinniniemndeastaeticimeditinieesanincenses passim
Pickup v. Brown, 740 F.3d 1208 (9th Cir.

STi iscoliasssniessicaocapnesindpseensttiea daeaeinetananndcbaniainhdetiastiteonwedisiien 24, 25
R.A.V. v. City of St. Paul, 505 U.S. 377

REESE Pa Ae oe ee passim
Reed v. Town of Gilbert, 135 S. Ct. 2218

Rp Ras a 30, 31
Rumsfeld v. Forum for Acad. & Inst. Rights,

PS gS SF es eee 8, 13, 21
Sorrell v. IMS Health Inc., 564 U.S. 552

Sd ciabsshecpienpahnidkcibbdsnanictaenibitenineibbisndacnnaes passim

United States v. Carolene Prods. Co., 304

NO

Va. State Bd. of Pharm. v. Va. Citizens
Consumer Council, Inc., 425 U.S. 748

REATARD ME LR AE rn are OR passim
Welch v. Brown, 134 8. Ct. 2881 (2014) ................... 24
W. Coast Hoiel Co. v. Parrish, 300 U.S. 379

Tl iadeitnteicninideeseniadbinisindiaadennidmimianeient 6, 17, 19, 20
Williamson v. Lee Optical of Oklahoma Inc.,

ee i: Ce I ctitceniienicnecienacasencontmiess 16, 17, 20
Zauderer v. Office of Disciplinary Counsel, 471

es ies nideetliniintensnstniinninsasncedanacsess 28, 29

CONSTITUTION
U.S. Const. Amend. I ................... ican ike passim
U.S. Const. Amend. XIV .................2.-.:0ss000008 16, 17, 20
STATUTES

oS 5 na ac, 2 Oy A Jccccomadaenl 18
ee rt ttticitcninisccctincssnsimensincsi 12,14
I asinine ubceceibia 12
a ET TE eT 21
& A Eee ere nan ene passim

LEGISLATIVE MATERIALS
Pub. L. No. 94-222, 90 Stat. 197 (1976) ..................... 4

OTHER AUTHORITIES

Amanda Shanor, The New Lochner, 2016:1

Re ees HE nddicciinesneressitinsiciinabiabsmentonanindeinis 10, 22
American Heritage Dictionary (5th ed. 2016).......... 12

Jack M. Balkin, Republicanism and the
Constitution of Opportunity, 94 U. Tex. L.
Rev. 142°7 (2016).......-..-c.cccccscsssceeceseeeverees <a

vi

John C. Coates IV, Corporate Speech and The
First Amendment: History, Data, and
Implications, 30 Const. Comment. 233,
ca menaiiisoasaons 24

Robert Post & Amanda Shanor, Adam Smith’s
First Amendment, 128 Harv. L. Rev. F. 165

RE REST ARLES SE ERER e eS Aa Ce eee 10
Robert Post, Compelled Commercial Speeci, 117
SX RS 8, 11

Webster's Third New International Dictionary

1

INTERESTS OF AMICI CURIAE

Amici curiae! Labor, Environmental, and Civil
Rights Organizations share an interest in defending
the states’ and political branches’ historical power to
regulate to protect the public and our environment. A
ruling for Petitioners would threaten that traditional
regulatory prerogative and upset the balance of power
between legislatures and the courts.

Amicus the American Federation of State, County
and Municipal Employees, AFL-CIO “AFSCME”) is a
union of 1.6 million members in the United States and
Puerto Rico, both in the public and private sectors,
who share a commitment to service. AFSCME
advocates for prosperity and opportunity for all
working families. AFSCME’s interest in this case is to
defend the government's ability to regulate the
economy so that AFSCME’s members and other
working Americans are protected from exploitation
and deceptive business practices.

Amicus the American Federation of Teachers
(“AFT”), an affiliate of the AFL-CIO, was founded in
1916 and today represents 1.6 million members in K-
12 and higher education, public employment, and
health care. The AFT has more than 3,500 locals
nationwide. The AFT’s interest in this case arises
from its long-term commitment to defending the
balance under the First Amendment between
protected speech and associational rights on the one
hand and the traditional right of government to issue
economic and social regulation and legislation that

1 No counsel for a party authored this brief in whole or in
part, and no person or entity other than amici curiae made a
monetary contribution to the preparation or submission of this
brief. All parties consented to the filing of this brief.

2
addresses conduct on the other.

Amicus the National Center for Lesbian Rights
(“NCLR’”) is a national non-profit legal organization
dedicated to protecting and advancing the civil rights
of lesbian, gay, bisexual, and transgender people and
their families through litigation, public policy
advocacy, and public education. Since its founding 1 in
1977, NCLR has played a leading role in securing fair
and equal treatment for LGBT people and their
families im cases across the country involving
constitutional and civil rights. NCLR has a particular
interest in promoting equal opportunity for LGBT
people through legislation, policy, and litigation, and
represents LGBT people in First Amendment and
other cases in courts throughout the country.

Amicus the National Women’s Law Center
(“NWLC’”) is a non-profit legal advocacy organization
dedicated to the advancement and protection of
women’s rights and opportunities and _ the
corresponding elimination of sex discrimination from
all facets of American life. Since 1972, NWLC has
worked to secure equal opportunity for women in
their families, including in the workpiace. NWLC has
played a leading role in the passage and enforcement
of federal civil rights laws, including through class
action and pattern or practice litigation and in
numerous amicus briefs involving discrimination in
employment before the United States Supreme Court,
federal courts of appeals, and state courts.

Amicus Natural Resources Defense Council, Inc.
(“NRDC”) is a non-profit membership corporation
founded in 1970 with hundreds of thousands of
members nationwide. NRDC engages in scientific
analysis, public education, advocacy, and litigation to
protect human health and the environment. NRDC’s

3

members rely on disclosure requirements and laws
against false and misleading commercial speech to
protect themselves and their families from
environmental toxins and other harms.

Amicus the Service Employees International
Union (“SEIU”) is a labor union representing more
than 2 million men and women in healthcare,
property services, and public service employment in
the United States, Canada, and Puerto Rico. SEIU is
dedicated to improving the lives of workers and their
families and creating a more just and humane socicty.
SEIU’s interest in this case is to defend the ability of
elected officials to enact policies that protect working
people and other consumers from exploitation or
deception.

Amicus the Sierra Club is a national nonprofit
organization with 67 chapters and over 665,000
members dedicated to educating and enlisting
humanity to protect and restore the quality of the
natural and human environment. The Sierra Club’s
concerns include protecting the public from products
that pose risks to safety, health, and welfare. The
Sierra Club’s particular interest in this case is to
preserve the ability of government entities to protect
the public through regulation of commercial
transactions, by adopting laws that support the
public’s right to know and that require disclosure of
risks to consumers.

Amicus the United Steelworkers International
Union (“USW”) is an international trade union
representing over 600,000 working women and men
in the United States and Canada in a diverse range of
manufacturing, mining, and service industries. USW
participated in the Congressional hearings in support
of a credit card surcharge ban that preceded the

4

passage of Pub. L. No. 94-222, 90 Stat. 197 (1976), the
federal statute providing the model for the New York
law, N.Y. Gen. Bus. L. § 518, at issue before the Court,
and USW’s positions at those hearings are referenced
on pages 6 and 8 of Respondent’s Brief. USW’s
interest in this case is to defend the ability of
America’s elected representatives to enact legislation
that protects its members and other working people
from deceptive business practices.

5

INTRODUCTION AND
SUMMARY OF ARGUMENT

Petitioners and their amici disagree with the
policy justifications for New York General Business
Law § 518. But rather than leave economic policy
decisions to the state legislature, where the interests
of merchants, credit card companies, and consumers
are appropriately weighed, Petitioners and their
amici seek to constitutionalize their disagreement
with this unremarkable consumer protection statute.
In so doing, they imvite a decision undermining
distinctions—between conduct and speech and
between commercial and non-commercial speech—-
that have guided First Amendment law for decades.

This Court has long distinguished for First
Amendment purposes between laws aimed at conduct
and laws aimed at speech. This conduct-speech
distinction marks an important boundary between
the functions of the judicial branch and those of the
political branches and state governments, ensuring
that courts are not enmeshed in policy disputes
masquerading as constitutional! questions.

Section 618, like its federal predecessor, aims at
conduct rather than speech. The statute bars
merchants from “impos[ing] a surcharge” on credit-
card customers at the point of sale. Merchants remain
free to offer discounts from their posted price to
customers who pay with cash, to induce cash payment
by posting a low price for cash buyers and a higher
price for credit-card payers, and to speak about the
evils of “swipe fees.” Merchants are prohibited from
engaging in only one course of conduct: charging
consumers who pay with credit-cards a higher price
than what was posted.

6

Because section 518, properly interpreted,
regulates conduct rather than speech, a decision
invalidating the statute risks undermining the
longstanding conduct-speech distinction, with grave
consequences. Such a ruling will leave courts with no
doctrinally sound way to distinguish section 518 from
laws that have been upheld for decades as aimed at
conduct, e.g., laws regulating deceptive marketing,
securities disclosures, product safety warnings,
workplace and housing discrimination, and even the
communicative professions. Courts will be called on to
adjudicate the kind of policy disputes they have
avoided since the New Deal.

Petitioners and their amicis arguments
demonstrate the dangers presented by a ruling in
their favor. Their briefs encourage the Court to
invalidate section 518 in part because of what are, in
their view, the statute’s undesirable social and
economic consequences. See, e.g., Cato Inst. Br. at 3-
9; Consumer Action Br. at 9-16; Ahold U.S.A., Inc. Br.
at 23-31. But accepting that invitation risks a return
to the Lochner era, when courts displaced legislatures
as the arbiters of social and economic policy——a role
this Court has rejected since West Coast Hotel Co. v.
Parrish, 300 U.S. 379 (1937).

Furthermore, even if this Court were to treat
section 518 as a speech regulation (which it should
not), it should reaffirm rather than depart from the
longstanding principle of deference to commercial
speech regulation. Petitioners’ amici urge a radical
change in doctrine that would subject all content-
based regulation of commercial speech to strict
scrutiny. But accepting that view would hamstring
the political branches and states, because nearly all
commercial regulation draws distinctions on the basis

7

of the topic addressed. Indeec Petitioners themselves
(unlike certain of their amici) seek application only of
the ordinary commercial-speech test, making this
case a particularly inappropriate vehicle for casting
that test aside.

New York General Business Law § 518 is a
conduct regulation that under settled precedent
should be subject to nothing more than rational-basis
review. A decision invalidating it as a speech
restriction (especially via some departure from
ordinary commercial-speech principles) risks a return
to an era when courts, rather than legislatures,
passed on the wisdom of general economic legislation.

ARGUMENT

I. A DECISION INVALIDATING SECTION 518
WOULD UNDERMINE SETTLED
DOCTRINE AND SUBJECT ORDINARY
SOCIAL AND ECONOMIC REGULATION
TO CONSTITUTIONAL CHALLENGE.

A. The conduct-speech distinction is settled law
and serves important purposes.

This Court has long held that laws aimed at
conduct do not implicate the First Amendment even if
the regulated conduct is achieved through or
evidenced by language. As explained in Giboney v.
Empire Storage & Ice Co., 336 U.S. 490 (1949), “it has
never been deemed an abridgement of freedom of
speech or press to make a course of conduct illegal
merely because the conduct was in part initiated,
evidenced, or carried out by means of language, either
spoken, written, or printed.” /d. at 502 (citing Fox v.
Washington, 236 U.S. 273, 277 (1915) and Chaplinsky
v. New Hampshire, 315 U.S. 568 (1942)).

8

When a law regulates conduct achieved through
language, “the unprotected features of the words
[used to achieve the conduct] are, despite their verbal
character, essentially a ‘nonspeech’ element of
communication.” R.A.V. v. City of St. Paul, 505 U.S.
377, 386 (1992). “That is why[, for example,] a ban on
race-based hiring may require employers to remove
‘White Applicants Only’ signs.” Sorrell v. IMS Health
Inc., 564 U.S. 552, 567 (2011) (quoting Rumsfeld v.
Forum for Acad. & Inst. Rights, Inc., 547 U.S. 47, 62
(2006) (“FAIR”); R.A. V., 505 U.S. at 385).

Put another way, even a law that may conceivably
limit what a person says is properly viewed as outside
the First Amendment’s purview when the law’s
purpose is to regulate conduct and not to suppress or
favor ideas. See Sorrell, 564 U.S. at 567. Indeed, “the
First Amendment does not prevent restrictions
directed at commerce or conduct from imposing
incidental burdens on speech,” id., even if the speech
incidentally burdened is core political expression. See
id. (“an ordinance against outdoor fires’ might forbid
‘burning a flag” without implicating the First
Amendment, even though flag-burning is a form of
protected expression (quoting R.A.V., 505 U.S. at
385)). “Any other conclusion would lead to the absurd
result that any government action that had some
conceivable speech-inhibiting consequences, such as
the arrest of a newscaster for a traffic violation, would
require analysis under the First Amendment.” Arcara
v. Cloud Books, Inc., 478 US. 697, 708 (1986)
(O’Connor, J., concurring).

Because the government may regulate conduct
generally without implicating the First Amendment,

it is also specifically true that “the State does not lose
its power to regulate commercial activity deemed

9

harmful to the public whenever speech is a component
of that activity.” Ohralik v. Ohio State Bar Ass'n, 436
U.S. 447, 456 (1978). Thus, even though a transaction
cannot be accomplished without communication (a
seller communicates an offer of a particular good or
service for a particular price; a buyer communicates a
counteroffer or acceptance), it has always been held
within the states’ power to regulate transactions
without offending the First Amendment. See id.

For that reason, it is also beyond debate that a law
regulating prices is a form of direct economic
regulation that does not implicate the First
Amendment. Eight justices emphasized this point in
44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484
(1996), agreeing that “direct regulation” requiring
“higher prices” for certain alcoholic beverages “would
not involve any restriction on speech.” Id. at 507
(plurality op.); see also id. at 525 (Thomas, J.,
concurring in part and concurring in judgment)
(regulation “directly banning a product, ... controlling
its price, or otherwise restricting its sale in specific
ways” “involv[es] no restriction on speech”); id. at 530
(O’Connor, J., concurring in judgment) (regulation
“establishing minimum prices” does not require First
Amendment analysis).

This is so even though the “power to ban the sale
of [a particular product] entirely does not include a
power to censor all advertisements that contain
accurate and nonmisleading information about the
price of the product.” Jd. at 513 (plurality op.); see also
Va. State Bd. of Pharm. v. Va. Citizens Consumer
Council, Inc., 425 U.S. 748, 773 (1976). States may
directly regulate how sellers determine their prices
for goods or services even though they may not ban all
truthful advertisements of the sellers’ lawfully

10

determined prices. See Va. State Bd. of Pharm., 425
U.S. at 773. Critically, this means the First
Amendment does not prevent the direct regulation of
product-pricing practices, even though such
regulation will necessarily affect what sellers may say
in their advertisements (in that sellers may advertise
only lawful prices). See id.

The Court’s distinction between laws aimed at
conduct and laws aimed at speech is grounded in the
recognition that “an expansive interpretation of the
constitutional guaranties of speech and press”
otherwise would be unworkable and would
significantly reconfigure the relationship between the
legislative and judicial branches. Giboney, 336 U.S. at
502. The absence of a conduct-speech distinction
would lead to an unduly broad reading of the First
Amendment which would, for example, “make it
practically impossible ever to enforce laws against
agreements in restraint of trade as well as many other
agreements and conspiracies deemed injurious to
society.” Id.

Indeed, because “[v]irtually everything humans do
requires the use of language,” “virtually all
government regulations will, in one way or another,
‘burden’ speech, if by speech we mean the use of
human language.” Robert Post & Amanda Shanor,
Adam Smith’s First Amendment, 128 Harv. L. Rev. F.
165, 179 (2015) (citation omitted), Human
communication — literal “speech” — is “literally
everywhere.” Id. “The conduct of buying a car, for
instance, involves conversations with the dealer, the
offer of a price, and the signing of a contract that is
written in words.” Amanda Shanor, The New
Lochner, 2016:1 Wisc. L. Rev. 133, 177.

11

But laws regulating contracts have not
traditionally posed First Amendment problems, and
for good reason. If they did, even something as
ordinary as a state statute of frauds would require
searching constitutional scrutiny. Cf. Robert Post,
Compelled Commercial Speech, 117 W. Va. L. Rev.
867, 914 (2015) (although “every rent control law
limits the words we may express in a contract,” rent
control laws are not currently held to implicate the
First Amendment). Given the ubiquity of human
communication, interpreting the First Amendment to
encompass every law that burdens speech qua speech
would subject practically the entire policymaking
work of the states and the political branches to
constitutional review.

Such a rule would also contravene the Court's
historical recognition that the state’s power to
regulate economic activity is broad. Over eighty years
ago, this Court remarked that “there can be no doubt
that upon proper occasion and by appropriate
measures the state may regulate a business in any of
its aspects, including the prices to be charged for the
products or commodities it sells.” Nebbia v. New York,
291 U.S. 502, 537 (1934). In fact, the propriety of
general economic regulation has been recognized far
longer than that: “[I]t has been customary in England
from time immemorial, and in this country from its
first colonization, to regulate ferries, common
carriers, hackmen, bakers, millers, wharfingers,
innkeeper, &c., and in so doing to fix a maximum
charge to be made for’ services’ rendered,
accommodations furnished, and articles sold.” Munn
v. Illinois, 94 U.S. 113, 125 (1877).

12

B. Invalidating section 518 would undermine
the conduct-speech distinction.

Section 518 regulates merchants’ conduct in a
manner that, under this Court’s longstanding
precedent, does not implicate the First Amendment.
The law bars sellers from imposing a “surcharge” on
customers who pay with credit cards. Although the
statute does not define “surcharge,” that word's
ordinary meaning is “[a]n additional sum added to the
usual cost or amount paid.” Amerncan Heritage
Dictionary 1752 (5th ed. 2016) (emphasis added); see
also Webster’s Third New International Dictionary
2299 (2002) (defining “surcharge” as “a charge in
excess of the usual or normal amount: an additional
tax, cost, or impost.”).

Thus, section 518 is correctly interpreted to apply
only to “single-sticker-price schemes,” Pet. Br. at 25—
where a seller posts a single “sticker” price for a
product but then demands a higher-than-posted price
from credit-card customers at the point of sale. As
Congress explained in connection with section 518’s
federal Truth in Lending Act (“TILA”) predecessor, a
law against “surcharge[s]” is by any ordinary
understanding a prohibition against “increasing the
regular price” of a good or service above “the tag or
posted price ... tf a single price is tagged or posted.” 15
U.S.C. § 1602(q), (x) (1982) (emphasis added); see also
id. § 1666f(a)(2); Resp. Br. at 22 (“By its plain terms,
[section 518] prohibits sellers from collecting
additional money, in excess of the usual or regular
price, from consumers who pay with a credit card.”);
U.S. Br. at 15 (Section 518 “prohibits a merchant who
posts a single price for an item from charging more
than the posted price to a customer who elects to pay
by credit card rather than cash.”); Ahold Br. at 24

13

(describing section 518 as “prohibit|ing] merchants
from surcharging credit transactions at the point of
sale.”).

Properly interpreted then, section 518 regulates
“conduct, not speech,” because “[ijt affects what
[persons] must do ... not what they may or may not
say.” FAIR, 547 U.S. at 60. Sellers may still engage in
truthful advertising about their lawfully determined
prices, cf. Va. State Bd. of Pharm., 425 U.S. at 773,
and remain free to say anything they like about
credit-card “swipe fees.” Sellers also remain free to
use and advertise differential pricing schemes for
credit-card and cash customers. See Resp. Br. at 30-
31. All a seller may not do is engage in the conduct of
charging credit-card customers a higher-than-posted
price at the point of sale. And although that forbidden
action is “carried out by means of language,” Giboney,
336 U.S. at 502, its prohibition no more implicates the
First Amendment than (forbidding fraud or
“agreements in restraint of trade.” /d.

Petitioners and their amici make two arguments
for treating section 518 as a speech regulation,
neither of which has merit.

First, seeking to avoid the straightforward
conclusion that section 518 regulates conduct rather
than speech, Petitioners insist that the statute is
aimed at speech because it also bars the use of “dual
prices,” t.e., posting one price for cash buyers and a
different, higher price for credit-card buyers. But the
plain terms of section 518 do not prohibit “dual
pricing.” See Rep. Br. at 30-31. As previously
discussed, the ordinary meaning of “surcharge” is an
extra sum added to the “usual” price. See supra p. 11.
Where a merchant displays two prices for the same
product, the merchant is not adding a sum to the

14

“usual” price by charging a customer one of those two
prices—both prices could be characterized as a
“usual” price. Respondent thus correctly construes
section 518, like TILA before it, to apply only when a
seller posts a single regular price for a particular
product. Resp. Br. at 28; see also 15 U.S.C. § 1602 (q),
(x) (1982).?

Second, Petitioners and their amici urge the Court
to hold that section 518 implicates the First
Amendment because tt affects how sellers
“communicate the added cost” to their customers. Pet.
Br. at 5; see also, e.g., Ahold U.S.A., Inc. Br. at 19. But
while communicating the fact of the extra fee may be
a “component” of imposing it, Ohralik, 436 U.S. at
456, that fact does not prevent the State from
restricting the particular pricing practice of imposing
a surcharge. See id.; see also Sorrell, 564 U.S. at 567;
Giboney, 336 U.S. at 502. “[D]espite their verbal
character,” the words used to accomplish a forbidden
point-of-sale surcharge are “essentially a ‘nonspeech’
element of communication” that have no
constitutional salience. R.A. V., 505 U.S. at 386.

For similar reasons, the United States is wrong in
arguing that section 518 regulates speech because it
affects how merchants “communicate” their pricing
schemes—that is, because it affects what price a
merchant may display on a price tag. See U.S. Br. at
19. No one disputes that the state may lawfully
regulate the prices themselves and the relationship
between prices. See, e.g., 44 Liquormart, 517 U.S. at

* Even if Respondent’s reading of section 518 were not the
only plausible one, this Court should reject Petitioners’
invitation to construe the statute in a manner that could create
a constitutional question. See, e.g., Clark v. Martinez, 543 U.S.
371, 380-81 (2005).

15

507 (plurality op.); id. at 525 (Thomas, J., concurring
in part and concurring in judgment); id. at 530
(O’Connor, J., concurring in judgment). And because
the state may dictate what price can be charged, the
state necessarily may regulate the price a merchant
may write on a price tag. In other words, just as the
state could prohibit a merchant from writing $10 on a
price tag for a product that the state mandates be sold
at minimum for $20, the state may also prohibit
merchants who intend to charge credit card
customers $103 from posting $100 as the sole price
and then charging an extra $3 at the point of sale. See
U.S. Br. at 19. Section 518 forbids conduct (charging
an extra $3 at the point of sale when the price posted
was only $100) the same way that a minimum price
regulation forbids conduct (charging $10 when the
legal minimum is $20). That both laws affect what
dollars-and-cents price may legally be written on the
price tag is thus wholly outside the First
Amendment’s concern. Cf. Va. State Bd. of Pharm.,
425 US. at 773.

Unless premised on a misreading of the statute as
applicable to dual pricing, then, a ruling for
Petitioners would mean striking down a restriction on
conduct — the act of charging a customer more than
the posted, regular price at the point of sale — simply
because that conduct is carried out in part through
speech. While a merchant might believe that
imposing a surcharge at the point of sale would be a
more “effective” means of “drawing attention to the
cost of credit,” Pet. Br. at 30, the First Amendment
does not bar the State from making the policy
judgment that such conduct is “harmful to the public.”
Ohralik, 436 U.S. at 456. A bank robber fancying
himself a real-life Robin Hood might believe that
robbing financial institutions is the most effective

16

way to draw attention to wealth inequality, but that
does not mean laws proscribing robbery implicate the
First Amendment—even though they may thwart
Robin’s preferred way of getting his message across.
Cf. R.A.V., 505 U.S. at 385 (“expressive activity can
be banned because of the action it entails, [though]
not because of the ideas it expresses”).

In sum, precedent requires holding that section
518 (properly interpreted as applying only to single-
sticker-price schemes) regulates conduct rather than
speech and is therefore subject only to rational-basis
review.

C. A ruling that section 518 regulates speech
would enmesh courts in policy disputes best
left to the legislative branch.

For nearly eighty years, this Court has declined to
rely on constitutional doctrines to scrutinize the
political branches’ justification for ordinary economic
regulation. “The day is gone when this Court uses the
Due Process Clause of the Fourteenth Amendment to
strike down state laws, regulatory of business and
industrial conditions, because they may be unwise,
improvident, or out of harmony with a particular
school of thought.” Williamson v. Lee Optical of

3 While the above precedents make clear that freedom of
speech is not implicated by a state’s regulation of the price of a
product or service, amici acknowledge that regulation of other
sums may in some circumstances implicate the First
Amendment. Certain restrictions on payments to expressive
organizations could, for example, implicate the freedom of
association. Cf. Boy Scouts of Am. v. Dale, 530 U.S. 640, 658
(2000) (“[I]mpediments to the exercise of one’s right to choose
one’s associates can violate the right of association protected by
the First Amendment.” (quoting Bd. of Dirs. of Rotary Int'l v.
Rotary Club of Duarte, 481 U.S. 537, 548 (1987)). Freedom of
association is of course not at issuc im this case.

17

Oklahoma Inc., 348 U.S. 483, 488 (1955).

Instead, this Court has recognized that “a state is
free to adopt whatever economic policy may
reasonably be deemed to promote public welfare, and
to enforce that policy by legislation adapted to its
purpose.” Nebbia, 291 U.S. at 537. “Even if the
wisdom of the policy be regarded as debatable and its
effects uncertain, still the Legislature is entitled to its
judgment.” W. Coast Hotel, 300 U.S. at 399.

The rule of judicial restraint in the realm of
ordinary economic regulation is animated by the
recognition that, “[e]ven where the social
undesirability of a law may be convincingly urged,
invalidation of the law by a court debilitates popular
democratic government.” Am. Fed’n of Labor v. Am.
Sash & Door Co., 335 U.S. 538, 553 (1949)
(Frankfurter, J., concurring). Accordingly, it is now
black-letter law that “regulatory legislation affecting
ordinary commercial transactions is not to be
pronounced unconstitutional unless in the light of the
facts made known or generally assumed it is of such a
character as to preclude the assumption that it rests
upon some rational basis within the knowledge and
experience of the legislators.” United States v.
Carolene Prods. Co., 304 U.S. 144, 152 (1938).

These same principles also animate the conduct-
speech distinction. If it were true that the First
Amendment required searching judicial review of
every law that burdens communicative acts, then the
First Amendment would inevitably become the same
scourge of regulation that the Fourteenth once was.
Rather than a nebulous “freedom of contract,” an
unduly expansive concept of free speech would
authorize courts to strike down all manner of
legislation. The Court would “return[] to the bygone

18

era of Lochner v. New York, 198 U.S. 45 (1905), in
which it was common practice for this Court to strike
down economic regulations adopted by a State based
on the Court’s own notions of the most appropriate
means for the State to implement its considered
policies.” Central Hudson Gas & Elec. Corp. v. Pub.
Serv. Comm’n of N.Y., 447 U.S. 557, 589 (1980)
(Rehnquist, J., dissenting).

Petitioners may disclaim any desire to undermine
the conduct-speech distinction, but there is no
principled way to distinguish section 518 from many
other statutes with a similarly attenuated
relationship to speech. New York’s surcharge ban is
not meaningfully different, for example, from a law
banning agreements in restraint of trade. Cf, e.g., 15
U.S.C. § 1 (“Every contract, combination in the form
of trust or otherwise, or conspiracy, in restraint of
trade ... is declared to be illegal. Every person who
shall make any contract or engage in any combination
or conspiracy hereby declared to be illegal shall be
deemed guilty of a felony....”). The acts prohibited by
both kinds of laws are accomplished through
communication between actors, ie, the co-
conspirators in the case of agreements in restraint of
trade and the seller and buyer in the case of
surcharges. The purpose of both laws is to forbid the
activity that the legislature has deemed harmful,
cither restraining trade or imposing a surcharge. And
both kinds of laws affect only such communications as
would actually accomplish the forbidden conduct—
i.e., the “nonspeech” words employed in committing
the act of conspiring or of surcharging. R.A.V., 505
U.S. at 386.

“Certainly the constitutionality of the antitrust
laws is not open to debate,” California Motor

19

Transport Co. v. Trucking Unlimited, 404 U.S. 508,
515 (1972), but if the Court rules for Petitioners, it
will invite debate on precisely that question.

Indeed, Petitioners’ and their amici’s arguments
show how dangerous a path the Court walks. Some
amici rail that New York’s anti-surcharge ban should
be invalidated because it leads to “retailers charging
a higher baseline price for both cash and credit users,”
such that cash customers subsidize credit-card users
who may be wealthier overall. Cato Inst. Br. at 9.
Similarly, Petitioners complain that because of their
own decision to pass “swipe fees” along by raising
prices across the board, cash purchasers are in effect
“subsidiz[ing] the cost of credit cards.” Pet. Br. at 7-8.
Other amici object that “customers who choose to pay
with credit cards” are not “required to bear the
marginal cost of their expensive payment method.”
Ahold U.S.A., Inc. Br. at 24. Still others opine that
surcharge bans “decrease consumer welfare.”
Consumer Action Br. at 11. And Petitioners explain
that they want to be able to impose surcharges
because “surcharges are far more effective than
discounts” at discouraging credit card use. Pet. Br. at
31.

But it should be irrelevant that the law may be
undesirable from Petitioners’ preferred policy
perspective. The economic soundness or “social
undesirability” of the challenged law is of no moment
to this Court. Am. Sash & Door Co., 335 U.S. at 553
(Frankfurter, J., concurring); see also W. Coast Hotel,
300 U.S. at 399. Courts do not “sit as ...
superlegislature[s]” to weigh “the wisdom or policy of
legislation.” N. Dakota State Bd. Of Pharm. v.
Snyder’s Drug Stores, Inc., 414 U.S. 156, 165 (1973)
(quoting Ferguson v. Skrupa, 372 U.S. 726, 731

20

(1963)); Obergefell v. Hodges, 135 S. Ct. 2584, 2612
(2015) (Roberts, J., dissenting) (quoting Lochner v.
New York, 198 U.S. 45, 69 (1905) (Harlan, J.,
dissenting)). “It is enough that there is an evil at hand
for correction, and that it might be thought that the
particular legislative measure was a rational way to
correct it.” Williamson, 348 U.S. at 488.

Again and again in the years since West Coast
Hotel this Court has “emphatically refuse[d] to go
back to the time when courts used the Due Process
Clause ‘to strike down state laws, regulatory of
business and industrial conditions, because they may
be unwise, improvident, or out of harmony with a
particular school of thought.” N. Dakota State Bd. of
Pharm., 414 U.S. at 165 (quoting Ferguson, 372 U.S.
at 731). Yet Petitioners and their amici would have
this Court do precisely that, only using the First
Amendment instead of the Fourteenth. The Court
would thus “reawaken{] Lochner’s pre-New Deal
threat of substituting judicial for democratic
decisionmaking where ordinary economic regulation
is at issue.” Sorrell, 564 U.S. at 603 (Breyer, J.,
dissenting).

D. A ruling for Petitioners would invite
constitutional challenges to a wide swath of
ordinary economic and social legislation.

If this Court were to undermine the conduct-
speech distinction by determining that section 518
regulates speech even if it applies only to single-
sticker-price schemes, many laws not previously
thought to raise constitutional questions would be
subject to First Amendment challenge.

Laws forbidding workplace harassment or housing
discrimination, for example, would arguably present

21

constitutional questions because the proscribed
discrimination is usually effectuated through speech.
Cf. FAIR, 547 U.S. at 62 (relying on the current
conduct-speech distinction for the proposition that
“Congress ... can prohibit employers § from
discriminating in hiring on the basis of race ... [even
if] this will require an employer to take down a sign
reading ‘White Applicants Only’ ....” (citing R.A.V.,
505 U.S. at 389)). In fact, at least one lower court has
already suggested that the First Amendment might
bar a Title VII sexual harassment claim where the
plaintiffs proof included derogatory comments
circulated widely by a male coworker, who also
reminisced about the “good ol’ days” before women
joined the workforce, compared female coworkers to
dogs, and opined that they were less qualified than
men to do the job. See DeAngelis v. El Paso Mun.
Police Officers Ass'n, 51 F.3d 591, 594-96 (5th Cir.

19965).

Other ordinary social and economic legislation
would be similarly threatened by a ruling for
Petitioners. If section 518 were held to burden speech,
“(njumerous examples ... of [other] communications
that are [currently thought to be] regulated without
offending the First Amendment, such as the exchange
of information about securities, corporate proxy
statements, the exchange of price and production
information among competitors, and employers’
threats of retaliation for the labor activities of
employees” could also be called into question.
Ohralik, 436 U.S. at 456 (citing SEC v. Texas Gulf
Sulphur Co., 401 F.2d 833 (2d Cir. 1968), cert. denied,
394 U.S. 976 (1969); Mills v. Electric Auto-Lite Co.,
396 U.S. 375 (1970); Am. Column & Lumber Co. v.
United States, 257 U.S. 377 (1921); NLRB v. Gissel
Packing Co., 395 U.S. 575, 618 (1969)).

22

Applying First Amendment scrutiny to any
regulation that burdens an instance of the spoken or
written word would also have _ profoundly
antiregulatory effect in the “information age,” when
the marketplace is increasingly saturated with
information products. Jack M. Balkin, Republicanism
and the Constitution ec‘ Opportunity, 94 U. Tex. L.
Rev. 1427, 1446 (2016).

Lower courts have already fallen into the trap of
concluding the First Amendment applies to speech
qua speech, notwithstanding this Court's
longstanding conduct-speech distinction. In Nordyke
v. Santa Clara County, 110 F.3d 707 (9th Cir. 1997),
for example, the Ninth Circuit determined that a
county's addendum to its lease with a commercial
fairground operator that prohibited any person from
“selling” or “from offering for sale ... firearms or
ammunition to any other person at a gun show at the
fairgrounds” implicated the First Amendment. /d. at
710. Although the court recognized that “the act of
exchanging money for a gun is not ‘speech’ within the
meaning of the First Amendment,” the court
concluded that the act of “offering for sale” was
“commercial speech” because such action constituted
a proposal of a commercial transaction. Id. (citing Va.
State Bd. of Pharm., 425 U.S. at 762) (emphasis

added).

“But of course any sale or contract involves the
communicative elements of offer and acceptance.”
Shanor, supra, at 182. And because “offer and
acceptance are communications incidental to the
regulable transaction called a contract,” it has long
been the rule that regulating § such fiteral
communications no more implicates the First
Amendment than would regulating the terms or

23

performance of the contract itself. Lowe v. SEC, 472
U.S. 181, 232 (1985) (White, J., concurring). If the
county could lawfully prohibit the act of completing a
transaction (“selling”), then surely the county could
also prohibit the act of initiating that same
transaction (“offering for sale”). Nordyke, 110 F.3d
708-09. Cases like Nordyke will surely abound if the
Court were to undermine the _ conduct-speech
distinction by ruling in Petitioners’ favor.

Nor is the challenge in Nordyke an outlier.
Litigants recently brought a First Amendment
challenge to a statute that “regulate[d] individuals
and entities that hold themselves out to the public as
willing to purchase precious metals,” on the theory
that “holding oneself out” constituted protected
commercial speech. Liberty Coins, LLC v. Goodman,
748 F.3d 682, 691, 692 (6th Cir. 2014), cert. denied sub
nom. Liberty Coins, LLC v. Porter, 135 S. Ct. 950
(2015). Others challenged on First Amendment
grounds a law that distinguished between “large” and
“small” businesses in determining how much time a
business would have to come into compliance with
minimum wage increases, on the theory that the law
burdened the contractual franchise agreements that
pushed some businesses into the “large” category. See
Intl Franchise Ass'n, Inc. v. City of Seattle, 803 F.3d
389, 408-09 (9th Cir, 2015), cert. denied, 136 S. Ct.
1838 (2016).

These examples demonstrate

the increasing and broadening use by corporations
of challenges under the First Amendment to laws
and regulations generally, and especially and
increasingly laws that do not constrain expressive
businesses (such as media companies), but any
communicative or expressive activity of any

24

business, no matter how incidental to the purpose
and goals of the business, and no matter how little
any ordinary individual (even a shareholder or
employee of the business) might care about the
expression in question.

John C. Coates IV, Corporate Speech and The First
Amendment: History, Data, and Implications, 30
Const. Comment. 233, (2015).

Still other regulations of the marketplace would
also be called into question by a ruling for Petitioners.
First Amendment challenges could be brought to laws
regulating or imposing. substantive licensure
requirements on the practice of professions in which
communication plays an important role. For example,
“[mlost, if not all, medical and mental health
treatments require speech.” Pickup v. Brown, 740
F.3d 1208, 1229 (9th Cir.), cert. denied, 134 S. Ct.
2871 (2014), and cert. denied sub nom. Welch v.
Brown, 134 S. Ct. 2881 (2014). And most, if not all, of
an attorney’s work takes the form of speech. See id. at
1228.

Most courts have to date relied on the conduct-
speech distinction to uphold _ regulation of
communicative professions, on the theory that, “[j]ust
as offer and acceptance are communications
incidental to the regulable transaction called a
contract, the professional’s speech is incidental to the
conduct of the profession.” Lowe, 472 U.S. at 232
(White, J., concurring). Under the current conduct-
speech distinction, holding a lawyer liable for
malpractice does not implicate the First Amendment
even though the attorneys incompetence is
demonstrated in written or oral work product. Cf.
Pickup, 740 F.3d at 1228. And doctors may be “held
hable for giving negligent medical advice to their

25

patients, without serious suggestion that the First
Amendment protects their right to give advice that is
not consistent with the accepted standard of care.” Id.

For similar reasons, most courts currently hold
that “fiJf the government enacts generally applicable
licensing provisions limiting the class of persons who
may practice the profession, it cannot be said to have
enacted a limitation on freedom of speech or the press
subject to First Amendment scrutiny.” Lowe, 472 U.S.
at 232 (White, J., concurring). Where the government
adopts such licensing requirements, it is regulating
the conduct of the profession, even if the profession
itself is conducted through speech. See id.; cf. also
Pickup, 740 F.3d at 1229. If the rule were otherwise,
then the states’ universal requirement that aspiring
lawyers pass the bar exam would be subject to First
Amendment scrutiny, since practicing law is
paradigmatically communicative. But a decision that
undermines the conduct-speech distinction—as a
decision for Petitioners inevitably threatens—puts
these holdings at risk. Cf. Pickup, 740 F.3d at 1229;
compare also Edwards v. District of Columbia, 755
F.3d 996 (D.C. Cir. 2014) (invalidating ordinance
requiring licensure of tour guides on First
Amendment grounds) with Kagan v. City of New
Orleans, 753 F.3d 560 (5th Cir. 2014) (reaching
opposite conclusion), cert. denied, 135 S. Ct. 1403,
(2015).

If Petitioners succeed in undermining the conduct-
speech distinction in this case, other litigants will
surely bring First Amendment challenges to
regulations with which they disagree, on the theory
that the regulations affect some form of literal speech.
And district and appellate courts will struggle to find
a meaningful way to determine which laws are

26

exempt from constitutional scrutiny and which must
be subject to some form of searching judicial review,
with the likely result that many laws currently held
to regulate conduct will instead be struck down as
impermissible regulations of speech. A ruling for
Petitioners would thus “involve consequences of a far-
reaching and mischievous character; for such a
decision would seriously cripple the inherent power of
the states to care for the lives, health, and wellbeing
of their citizens.” Lochner v. New York, 198 U.S. 45,
73 (1905) (Harlan, J., dissenting).

IL EVEN IF SECTION 518 IS INTERPRETED
AS A REGULATION OF SPEECH, IT
SHOULD BE SUBJECT TO DEFERENTIAL
SCRUTINY.

A. For good reason, this Court has long held
that commercial speech merits lesser
protection than political speech.

Since the time the First Amendment’s protections
were first held to extend to commercial speech, this
Court has recognized that “a different degree of
protection is necessary” for that category of
expression. Va. State Bd. of Pharm., 425 U.S. at 770,
771 n.24; see also Central Hudson, 447 U.S. at 562.
“Commercial speech ... is linked inextricably with the
commercial arrangement that it proposes, so the
State’s interest in regulating the underlying
transaction may give it a concomitant interest in the
expression itself.” Edenfield v. Fane, 507 U.S. 761,
767 (1993) (internal quotation marks omitted). In
other words, “commercial speech doctrine
represents an accommodation between the nght to
speak and hear expression about goods and services
and the right of government to regulate the sales of
such goods and services.” 44 Liquormart, 517 U.S. at

27

499 (plurality op.) (internal quotation marks omitted;
emphasis in original).

For these reasons, the Court “developed a
framework for analyzing regulations of commercial
speech that is ‘substantially similar’ to the test for
time, place, and manner restrictions.” Lorillard
Tobacco Co. v. Reilly, 533 U.S. 525, 554 (2001)
(quoting Central Hudson, 447 U.S. at 562). Under this
standard, restrictions upon truthful and
nonmisleading commercial speech are subject to a
form of intermediate scrutiny. Edenfield, 507 U.S. at
767. (“[L]aws restricting commercial speech ... need
only be tailored in a reasonable manner to serve a
substantial state interest ....”). The Court “ha[s] not
insisted that there be no conceivable alternative” to a
challenged restriction of commercial speech, only that
the regulation “not burden substantially more speech
than is necessary to further the government's
legitimate interests.” Bd. of Trustees of State Univ. of
N.Y. v. Fox, 492 U.S. 469, 478 (1989) (internal
quotations omitted).

Commercial speech is also “subject to ‘modes of
regulation that might be impermissible in the realm
of noncommercial expression.” Jd. at 477 (quoting
Ohralik, 436 U.S. at 456). That the nature of
commercial speech renders it more readily susceptible
of verification, and more durable, permits the state to
compel certain speech (such as warnings or
disclaimers) and obviates the need for certain
constitutional rules (such as overbreadth and prior
restraint doctrines). See Va. State Bd. of Pharm., 425
U.S. at 772 n.24; Ohralik, 436 U.S. at 463 0.20;
Central Hudson, 447 U.S. at 564 n.6.

Certain laws intended to prevent confusing or
deceptive commercial speech are subject to an even

28

more deferential reasonableness analysis. Among the
“well settled” First Amendment principles are that
“It}he States and the Federal Government are free to
prevent the dissemination of commercial speech that
is false, deceptive, or misleading, or that proposes an
illegal transaction.” Zauderer v. Office of Disciplinary
Counsel, 471 U.S. 626, 638 (1985); see also Central
Hudson, 447 U.S. at 563 (“The government may ban
forms of communication more likely to deceive the
public than to inform it.”); R.A.V., 505 U.S. at 388
(‘risk of fraud” is among “the characteristics of
commercial speech that justifly] depriving it of full
First Amendment protection”). “The First
Amendment ... does not prohibit the State from
insuring that the stream of commercial information
flow[s] cleanly as well as freely.” Va. State Bd. of
Pharm., 425 U.S. at 771-72.

As recently as 2010, this Court reaffirmed that
required disclosures are subject to “the less exacting
scrutiny described in Zauderer.” Milavetz, Gallop &
Milavetz, PA v. United States, 559 U.S. 229, 249
(2010). That standard demands only that the
mandated disclosures be “reasonably related” to the
government's interests in preventing consumer
confusion or deception. Jd. at 250 (quoting Zauderer,
471 U.S. at 651).

Thus, it does not offend the First Amendment to
“require that a commercial message appear in such a
form ... as [is] necessary to prevent its being
deceptive.” Friedman v. Rogers, 440 U.S. 1, 10 (1979)
(quoting Va. State Bd. of Pharm., 425 U.S. at 775-81)
(alterations in original). Laws that require
disclosures in order to prevent consumer confusion or
deception “trench much more narrowly” on core First
Amendment interests, and so are subject to relatively

29

deferential review. U.S. Br. at 22 (quoting Zauderer,
471 U.S. at 651).

A single-sticker-price surcharge ban operates to
vindicate the government’s interest in preventing
consumer confusion and deception by requiring
merchants to disclose the total dollar-and-cents price
that credit card customers will pay, at a time before
they are actually purchasing the product. See Resp.
Br. at 54-55. It requires that customers receive more,
not less, information. If treated as regulating speech,
section 518 should thus be upheld as long as the
mandated disclosure is “reasonably related to the
State’s interest in preventing deception of
consumers.” Zauderer, 471 U.S. at 651 (emphasis
added). Because the danger that credit card
customers will believe they will have to pay only the
posted sticker price is “self-evident,” there is no need
for the State to submit further evidence that the
prohibited surcharge practice is misleading in order
to demonstrate the law’s constitutionality. Milavetz,
559 U.S. at 251.

B. Overturning this Court’s well-established
commercial speech doctrine, as Petitioners’
amici urge, would be a dangerous and
unwarranted departure from longstanding
precedent.

Petitioners confine their arguments to the
application of existing legal standards, and urge the
application of Central Hudson’s intermediate scrutiny
standard. Pet. Br. at 27-28, 36. But their amici go
much further, urging this Court to subject commercial
speech regulations to strict scrutiny if they draw
distinctions based on content. See, e.g., Ahold U.S.A.,
Inc. Br. at 4, 11-12, 15-16; Cato Institute Br. at 10-13.
Such a ruling would discard decades of settled

30

precedent and render it nearly impossible for the
government to protect consumer interests.

Petitioners’ amici claim to find support for this
direction in Reed v. Town of Gilbert, 135 S. Ct. 2218
(2015), but the speech at issue in Reed was not
commercial. See id. at 2231. Reed did not address
commercial speech or cite the main commercial
speech cases at all, and the Court therefore had no
need to address Justice Breyer’s admonition that
subjecting content-based regulations of commercial
speech to strict scrutiny would “write a recipe for
judicial management of ordinary government
regulatory activity.” /d. at 2234 (Breyer, J.,
concurring in judgment).

That admonition highlights the fundamental
problem that would result from strict scrutiny of all
content-based regulation of commercial speech. As
Justice Breyer noted, “[rjegulatory programs almost
always require content discrimination.” Reed, 135 S.
Ct. at 2234 (Breyer, J., concurring in judgment). Of
course that must be true, because of the very
definition of content-based restrictions: “Government
regulation of speech is content based if a law applies
to particular speech because of the topic discussed or
the idea or message expressed.” Reed, 135 U.S. at
2227 (emphasis added). Laws requiring specified
warnings on cigarettes, prohibiting the marketing of
certain food products as organic or low-salt,
mandating disclosures of conflicts of interest in
fiduciary relationships, compelling disclosures of
certain provisions in mortgage contracts, and
forbidding off-label marketing of pharmaceutical
drugs are all triggered by the topic addressed, and
would therefore all be subject to strict scrutiny under
Petitioners’ amici’s proposed new rule.

31

That warning should be heeded here. If content-
based burdens upon commercial speech were subject
to strict scrutiny, the government would lose its
ability to protect consumers against confusion or
deception. Laws requiring warnings or disclosure of
facts necessary to avoid confusion or danger about
drugs, food, or other subjects, or prohibiting
misleading forms or means of advertising about
certain topics, would be invalidated unless courts
agreed with the legislative oor regulatory
determination of the importance of the problem
addressed and that the methods chosen were the least
restrictive.

Strict scrutiny applies to noncommercial! content-
based distinctions because of the danger that cuch
content-based distinctions could disguise laws that in
reality disfavor certain viewpoints, and thereby
“interfere with democratic self-government and the
search for truth.” Reed, 135 S. Ct. at 2233 (Alito, J.,
concurring); see also id. at 2229 (noting danger that
“future government officials may” use content-based
laws “to suppress disfavored speech”). Here, where
the speech at issue is indisputably commercial, and
the law addresses pricing schemes’ without
interfering with consumers’ ability to receive accurate
information or with a merchant's speech on issues
such .s the evils of credit card companies, there is no
simi.ar justification for strict scrutiny. Cf. Va. State
Bd. of Pharm., 425 U.S. at 771 n.24.

Nor does Sorrell v. IMS Health Inc., 564 U.S. 552
(2011), support applying strict scrutiny to all
commercial speech. Sorrell employed “heightened
scrutiny” to evaluate a law prohibiting certain
speakers from making specified uses of information,
but did not make clear whether that standard was a

32

version of Central Hudson’s intermediate review,
strict scrutiny, or something in between. See id. at
565. In fact, Sorrell concluded that the result would
be the same even if the Central Hudson standard
applied, rendering it unnecessary to decide whether
stricter scrutiny was appropriate. Jd. at 571-72.

Even more relevant here, Sorrell addressed a law
that prohibited a subgroup of disfavored speakers
from utilizing lawfully available information, for the
purpose of suppressing viewpoints to which the State
was hostile. See id. at 563-64 (“The law on its face
burdens disfavored speech by disfavored speakers.”);
id. at 567 (law was “aimed at particular speakers” and
imposed burdens based on “the identity of the
speaker”). The law itself made that purpose explicit.
Id. at 565 (Given the legislature’s expressed
statement of purpose, it is apparent that § 4631(d)
imposes burdens that are based on the content of
speech and that are aimed at a particular
viewpoint.”).

Whether treated as a mandatory disclosure law or
(more appropriately) as a prohibition on certain
pricing schemes, section 518 is not analogous to the
law at issue in Sorrell. Section 518, unlike that law,
is not designed to suppress a disfavored message that
conflicts with the state’s goals. Section 518 does not
restrict speech about “swipe fees” or a merchant's
pricing practices, and in fact enhances, rather than
suppresses, consumer access to information. It does so
by requiring disclosure of the full dollar-and-cents
price that credit-card customers will pay, which both
enables consumers to easily compare prices across
merchants and also helps avoid the kinds of consumer
deception or confusion that might flow from
consumers being charged more than the posted price

33

at the point of sale. Thus, unlike Sorrell, this case
involves a statute with a legislative purpose of
enhancing, rather than preventing, access to valuable
information. A purpose of preventing such access was
critical in Sorrell and may warrant heightened
scrutiny in other cases. Cf. Sorrell, 564 U.S. at 566
(consumers interest in information is strong; in
medicine and public health fields, “information can
save lives”); Central Hudson, 447 U.S. at 5663 (“The
First Amendment’s concern for commercial speech is
based on the informational function of advertising.”).

That the merchants in this case also wish to
convey a message through the action of imposing a
surcharge does not change the constitutional
analysis. The law does not restrict merchants from
speaking out against or educating their customers
about the cost of credit cards. And this Court long ago
rejected the notion that commercial speech “link[ed]
... to a current public debate” would thereby be
entitled to greater protections. Central Hudson, 447
U.S. at 563 n.5; see also Fox, 492 U.S. at 475. Because
the protection for commercial speech rests upon
listeners’ interest in the free flow of information, not
the autonomy interest of speakers, Va. State Bd. of
Pharm., 425 U.S. at 764, a commercial actor’s desire
to utilize certain mechanisms to amplify its speech
does not require constitutional invalidation.

As previously discussed, see supra section LB,
Petitioners’ and their amicis focus on the policies
implicated by section 518 make clear why heightened
scrutiny of commercial speech would return courts to
the Lochner era. One set of amici, for example, argue
that the State is wrong to conclude that consumers
will be deceived by the imposition of credit card
surcharges at the point of purchase, that it has other

34

mechanisms to prevent this kind of deception, and
that allowing surcharges would actually benefit
consumers and the market economy. Consumer
Action Br. at 12-16, 18-19; see also Cato Inst. Br. at 3-
10 (calling section 518 a form of “cronyism” and
complaining about its policy results); Ahold U.S.A.,
Inc. Br. at 6-7, 23-31 (complaining of “massive
negative impact on the national economy” and
“massive market inefficiency”). Similarly, Petitioners
protest that section 518 is unsound because
“surcharges are far more effective than discounts at
signaling to consumers the relative costs of a payment
system.” Pet. Br. at 31.

This sort of second-guessing of legislative and
regulatory determinations is not the proper role for
the courts. Rather, this Court has “provide[d] the
Legislative and Executive Branches needed leeway in
a field (commercial speech) ‘traditionally subject to
governmental regulation.” Fox, 492 U.S. at 481
(quoting Ohralik, 436 U.S. at 455-56). Petitioners’ and
their amici’s suggestion that this Court should
evaluate whether the New York legislature was
correct in its policy judgment about credit-card
surcharges threatens to unravel the longstanding
judicial consensus that the role of courts “is only to
determine the reasonableness of the Legislature's
belief in the existence of evils and in the effectiveness
of the remedy provided.” New State Ice Co. v.
Liebmann, 285 U.S. 262, 286-87 (1932) (Brandeis, J.,
dissenting) (emphasis added).

The Central Hudson majority presumably rejected
Chief Justice Rehnquist's dissenting admonition that
granting First Amendment protection to commercial
speech would bring back “the bygone era of Lochner”
because of their conviction that applying intermediate

35

scrutiny would not reinstate “the common practice ...
to strike down economic regulations adopted by a
State based on the Court’s own notions of the most
appropriate means for the State to implement its
considered policies.” 447 U.S. at 589 (Rehnquist, J.,
dissenting). But that would be the necessary
implication of Petitioners’ amici’s call to require strict
scrutiny of all content-based regulations of
commercial speech. The Court should reject
Petitioners’ amicis invitation to undermine the
courts’ legitimacy by turning back the clock to the age
of that anticanon.

CONCLUSION

For the foregoing reasons, the Second Circuit’s
decision should be affirmed.

Respectfully submitted,

JUDITH A. SCOTT STACEY LEYTON

NICOLE G. BERNER Counsel of Record

JENNIFER HUNTER REBECCA LEE

SERVICE EMPLOYEES ALTSHULER BERZON, LLP

INTERNATIONAL UNION 177 Post St., Ste. 300

1800 Mass. Ave., N.W. San Francisco, CA 94108

Washington, DC 20036 (416) 421-7151

(202) 730-7383 sleyton@altber.com
CLAIRE PRESTEL

JAMES & HOFFMAN, P.C.
1130 Conn. Ave., N.W., Ste. 950

Washington, D.C. 20036
(202) 496-0500

Counsel for Amici Curiae
December 21, 2016

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0666%3A29. Public record. Not legal advice.