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Speaker 1: If a retailer wants to discourage customers from using credit cards,

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Speaker 1: it can offer a discount for cash, or it can

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Speaker 1: impose a surcharge for using a card. If those sound

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Speaker 1: like the same thing, well they're not under a New

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Speaker 1: York law. They went before the u. S. Supreme Court today.

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Speaker 1: New York is one of ten states that bar merchants

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Speaker 1: from imposing surcharges on top of the regular prices. New

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Speaker 1: York says its law, which carries criminal penalties, protects consumers

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Speaker 1: from hidden charges that show up only at checkout. But

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Speaker 1: to some merchants, the laws are a sop to the

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Speaker 1: credit card industry and a free speech violation. Retailers pay

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Speaker 1: the credit card industry fifty billion dollars a year in

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Speaker 1: so called swipe fees, and they say being able to

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Speaker 1: impose a surcharge and to call it a surcharge, would

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Speaker 1: be an especially effective way to tell their customers about

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Speaker 1: the cost of credit cards and discourage their use. With

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Speaker 1: us today to discuss the issue and the arguments before

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Speaker 1: the Supreme Court are two people who have waghed in

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Speaker 1: on the case. Rebecca Tushnet is a law professor at

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Speaker 1: Georgetown University, and she signed a bree defending the law,

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Speaker 1: and Jonathan Adler, law professor at Case Western Reserve, signed

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Speaker 1: a brief on the side of the retailers in the case.

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Speaker 1: Welcome to you both, Rebecca, Let me start with what

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Speaker 1: may end up being a controversial subject. Can you just

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Speaker 1: tell us what this law actually does? Well, so this

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Speaker 1: is actually one of the larger issues looming, which is

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Speaker 1: what the the what conducts the law prohibits UM. At

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Speaker 1: the end of this litigation, New York has taken the

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Speaker 1: position that the only thing it really prohibits is putting

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Speaker 1: one price on say the package or the self, and

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Speaker 1: then charging an additional price when you go up to

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Speaker 1: the counter, um the if you try and use a

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Speaker 1: credit card. However, there have been different interpretations in the past. Sometimes, uh,

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Speaker 1: New York has tried to say that it prohibits UM

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Speaker 1: listing two prices but saying that one is a credit

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Speaker 1: search charge. So, Jonathan, if the law says you can't

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Speaker 1: impose a search charge, how is that a violation of

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Speaker 1: First Amendment rights? Well, the violation of the first Moment

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Speaker 1: rights is not a limit limiting the way retailers charge

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Speaker 1: consumers or the prices they charge. What raises First Amendment implications.

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Speaker 1: Is making conduct criminal based on how it's described, and

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Speaker 1: that's the way that that New York has actually enforced

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Speaker 1: this law and imposed it on retailers. And if that's

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Speaker 1: the way New York wants to enforce the law, then

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Speaker 1: we've argued in our brief that the law should be

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Speaker 1: subject to First Amendment scrutiny and should be evaluated under

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Speaker 1: the standards that are applied. I believe we lost that line.

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Speaker 1: So next question for Rebecca. Okay, Well, Rebecca, let me

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Speaker 1: ask you, do you agree with Jonathan Uh that there

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Speaker 1: is a speech component to this law or is it

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Speaker 1: purely regulation of conduct, which which, of course, of course,

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Speaker 1: a state has more latitude to do. Right, So, UM,

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Speaker 1: it may depend on exactly how you describe what the

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Speaker 1: law is trying to do. So I think probably the

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Speaker 1: best way to understand the general class of laws here

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Speaker 1: is UH kind of a consumer protection measure, and as

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Speaker 1: a consumer protection measure, it does have some relationship to

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Speaker 1: UH speech. But the idea is to prevent people from

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Speaker 1: getting surprised by an extra charge at the register, maybe

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Speaker 1: when they don't have enough cash on them to avoid

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Speaker 1: the charge. UM, and UH in that case, it's a

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Speaker 1: perfectly fine regulation of how you tell people what the

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Speaker 1: price is. Um. Setting the price, of course, is just conduct.

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Speaker 1: And then depending on how you frame the law, it

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Speaker 1: may just be a regulation about how you set the price.

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Speaker 1: So um, there are a lot of situations where it's

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Speaker 1: important for a regulator to know what the price of

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Speaker 1: a good is. And the act of setting a price

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Speaker 1: is not speech, it's it's economic conduct. Greg you were

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Speaker 1: at the hearings today, and from your article, it seemed

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Speaker 1: as if some of the justices were confused about the law.

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Speaker 1: They were confused about the law. There was a lot

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Speaker 1: of back and forth. Some of the justices, including Lena

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Speaker 1: Kagan and Sonja Soda. Mayor started off by saying, I

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Speaker 1: look at this law, and there's nothing in here about speech.

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Speaker 1: It is just conduct of the type that that Rebecca

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Speaker 1: was discussing. Uh. But but later on they sort of

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Speaker 1: use that some justices use that against the state. Uh.

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Speaker 1: Justice Kennedy for example, said, well, maybe the issue here

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Speaker 1: is that this law is too vague, which is another

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Speaker 1: reason uh that a law could be declared unconstitutional. Uh

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Speaker 1: So uh, you know, I left the argument, especially with

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Speaker 1: an a justice court, where where you have to get

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Speaker 1: get five out of the eight to to get a

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Speaker 1: ruling that applies across the country. I left the argument

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Speaker 1: very much unclear how the court was going to come

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Speaker 1: out in this case. So Rebecca, doesn't really matter what

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Speaker 1: you call it. If if you go up to a

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Speaker 1: register and it says discount for cash, doesn't that hit

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Speaker 1: the consumer? You know, equally as if if they say, well, uh,

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Speaker 1: seurcharge for credit cards. What's the difference? So it depends

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Speaker 1: if there was one price on the sticker, you know,

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Speaker 1: at the when you picked it up. Uh. If you

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Speaker 1: get up the register and they say, hey, actually we'll

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Speaker 1: give you a three percent discount if you pay with cash,

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Speaker 1: that's a happy surprise. It doesn't really implicate any consumer

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Speaker 1: protection questions. UM, it doesn't fool you into acting in

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Speaker 1: a way that would be against your interest. If there's

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Speaker 1: one price on the package, and use up to the

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Speaker 1: register and pull out credit cards and they say, oh,

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Speaker 1: actually it's gonna be three percent more than that, that

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Speaker 1: raises false advertising concerns. You've been abated, uh into thinking

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Speaker 1: you're going to get one thing and at the counter

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Speaker 1: they twitched to a different higher price. So uh, they

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Speaker 1: are in some sense uh identical in terms of the

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Speaker 1: ultimate price if you set them right, but uh, the

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Speaker 1: they offer different opportunities for surprise and potentially harm the

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Speaker 1: other thing. Um. And this is a controversial. Part of

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Speaker 1: the case is that a lot of people think that

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Speaker 1: people reacted differently when you describe something as a discount

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Speaker 1: versus as a surcharge. People really hate surcharges, uh, and

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Speaker 1: so it may affect their behavior more if you describe

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Speaker 1: the thing as a surcharge. I'm a little skeptical of,

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Speaker 1: at least in the way that New York now says

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Speaker 1: it's law will operate, Because New York says, as long

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Speaker 1: as you show them the two prices, you can describe

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Speaker 1: it as anything you want. You can call it a cabbage,

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Speaker 1: as long as before they get up to the register

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Speaker 1: they know that there will be a difference based on

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Speaker 1: whether or not they use a credit card or cash.

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Speaker 1: We're talking about the Supreme Court arguments today on New

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Speaker 1: York's ban on retail surcharges for credit card transactions, or

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Speaker 1: at least descriptions of those charges as surcharges. Our guests

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Speaker 1: are Rebecca Tushta, law professor at Georgetown Law and Jonathan Adler,

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Speaker 1: Professor at Case Western Reserve School of Law. Jonathan, I

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Speaker 1: understand that it was an ice storm and in Cleveland

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Speaker 1: that knocked you out. I'm glad, You're glad you're with

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Speaker 1: us again. Um, while you were shivering in the cold,

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Speaker 1: Rebecca was making the point that you can look at this.

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Speaker 1: She said, you can look at this New York law

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Speaker 1: basically as a consumer protection. It protects consumers from being

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Speaker 1: surprised when they it to the cash register buy an

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Speaker 1: extra charge for for their credit card. If that's what

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Speaker 1: this law is, why isn't it constitutional? Well, I think

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Speaker 1: we need to distinguish two issues with regard to this

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Speaker 1: sort of law. First is whether or not what's going

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Speaker 1: on is the regulation of speech, and then there's a

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Speaker 1: secondary question of if it's a regulation of speech, isn't

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Speaker 1: none lawless permissible. So there are all sorts of laws

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Speaker 1: governing disclosure, laws designed to prevent fraud or to prevent

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Speaker 1: consumers from being received or misled that regulates speech that

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Speaker 1: are none less permissible. The primary issue in this case

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Speaker 1: is the is the earlier question whether or not a

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Speaker 1: law let be in operation, and as it's enforced, primarily

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Speaker 1: focuses on the way retailers describe their pricing and describe

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Speaker 1: their commercial practices should be evaluated as merely economic regulation

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Speaker 1: or as the regulation of speech. And I think because

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Speaker 1: in practice, the way this law has been enforced and

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Speaker 1: operates is too uh control or have an effect on

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Speaker 1: the way retailers described their practices that UM, it should

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Speaker 1: be evaluated as a regulation speech and should then only

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Speaker 1: be upheld if it can be justified as a way

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Speaker 1: of preventing consumer dissection. Rebecca, labels do matter for consumers.

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Speaker 1: There's no doubt that we've seen cases over you know,

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Speaker 1: calling something healthy as opposed to as opposed to saying

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Speaker 1: what what it really is about? There there are tons

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Speaker 1: of cases like that. But is this really about labels

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Speaker 1: for consumers or or is it about just making sure

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Speaker 1: that they know what they're what's happening? Right? So, UM,

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Speaker 1: the thing Jonathan's description of what this case is really

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Speaker 1: about UM is one view of it, and that's what

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Speaker 1: makes it really tricky and perhaps explains some of the

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Speaker 1: UM confusion and disagreement on the justices UM that was

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Speaker 1: described at oral argument. Because UM, it really does depend

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Speaker 1: on how you approach it. So if you look at

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Speaker 1: the language of the statute itself. It says retailers shall

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Speaker 1: not impose a search charge. So in one sense, that's

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Speaker 1: just an action. But then how do you know if

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Speaker 1: they've imposed the search charge? Um. Sometimes you may need

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Speaker 1: to look at what they say uh to figure that out.

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Speaker 1: Although I think that's not really the key to it.

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Speaker 1: I mean to me, UH, the key is whether you

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Speaker 1: know before you start on your purchase journey. Uh, you

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Speaker 1: know that there's a credit card price. UM. And I

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Speaker 1: think that's reasonably described as a regulation of conduct. UM.

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Speaker 1: One of the reasons this is controversial is because there's

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Speaker 1: a lot of things where economic conduct is carry it

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Speaker 1: out through speech. And so if we are sloppy about

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Speaker 1: how we describe this um, or if the Supreme Court

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Speaker 1: speaks really broadly that says any time you know, to

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Speaker 1: talk about prices, that speaks, then a lot of economic

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Speaker 1: conducts suddenly becomes analyzed under the First Amendment. UM. And

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Speaker 1: I think both sides are in agreement that we need

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Speaker 1: uh some way to sort this out. Jonathan, we've only

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Speaker 1: we've only got about thirty seconds left. But but one

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Speaker 1: thing the New York lawyer for the State of New

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Speaker 1: York said today was that that the law does not

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Speaker 1: apply to a situation where a retailer just has two

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Speaker 1: prices up there, here's the credit price, here's the cash prize.

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Speaker 1: Does that help manners from your standpoints, well, potentially, although

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Speaker 1: there is some dispute about what New York has said

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Speaker 1: versus the way it's been enforced. The one thing I

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Speaker 1: think people need to keep in mind is that even

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Speaker 1: the United States in in the total government and the brief,

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Speaker 1: it's submitted that this should be analyzed as a speech regulation,

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Speaker 1: while at the same time arguing that many regulations that

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Speaker 1: are designed to provide this type of consumer protection would

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Speaker 1: in the federal government's view, still withstand first amment scrutiny.

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Speaker 1: So the first moment question and what type of regulation

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Speaker 1: is allowed question are distinct questions. I want to thank

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Speaker 1: our guest Jonathan Adler of Case Western Reserve School of

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Speaker 1: Law and Rebecca Tushnet of Georgetown Law