Why Anti-Surcharge Laws Do Not Violate a Merchant's Freedom of Speech

By Anderson, Annie P. | American University Law Review, January 1, 2017 | Go to article overview

Why Anti-Surcharge Laws Do Not Violate a Merchant's Freedom of Speech


Anderson, Annie P., American University Law Review


INTRODUCTION

Suppose that a shortage of softbeverages has changed the way that Florida's restaurants serve drinks. Rather than pouring them to fill a glass, the average restaurant only pours beverages halfway. A drink filled to the brim is out of the question. Tourist complaints of the meager and overpriced drinks at Floridian establishments cast a negative light on the state's restaurant industry; when restaurant profits plummet, the state fears that tourism profits are next. To save its reputation, Florida decides that it must regulate the restaurant industry more closely. It determines a positive message for restaurants to convey and passes a law that dictates how these establishments may describe softdrinks.

The law is simple: it prevents restaurants from serving "half-empty" beverages but allows them to provide drinks labeled "half-full." There is no additional regulatory scheme in place, and the law does not actually mandate that restaurants provide a greater quantity of the beverages they serve; a violation hinges entirely on a restaurant's choice of words.1 Restaurant owners recognize the law as a restriction on their constitutional right to free speech,2 and a group of restaurateurs files suit against the state, fervently litigating the law to the appellate level. Finding that the law directly targets the content that restaurant owners communicate to patrons3 and that it is not commercial speech that the government may regulate,4 the appellate court strikes down the restaurant mandate as a violation of the First Amendment.

While this scenario may seem far-fetched, the Eleventh Circuit in Dana's Railroad Supply v. Attorney General of Florida5 relied on a similar hypothetical to determine whether a Florida law regulating credit card swipe fees (1) implicated and (2) violated storeowners' constitutional rights under the First Amendment.6 The plaintiffs, a group of Florida merchants, argued that because the law prevented them from imposing surcharges, or fees, on credit card transactions, but allowed them to provide discounts on non-credit card transactions, the law violated their First Amendment rights.7 They maintained that the Florida law regulated their speech rather than their business conduct.8

Though the Eleventh Circuit acknowledged that lawful regulations may sometimes implicate speech without violating the First Amendment, it ultimately found for the plaintiffs.9 The court held that the statute "directly target[ed] speech [and] indirectly affect[ed] commercial behavior,"10 reasoning that there was "no legally salient difference between" the anti-surcharge law and the court's glass halffull mandate similar to the one hypothesized above.11 The court interpreted the anti-surcharge law as a "hybrid" of both commercial speech, which is subject to intermediate scrutiny, and "plain oldfashioned speech suppression," which is subject to strict scrutiny.12 It concluded that the law would fail either test,13 so it applied an intermediate scrutiny analysis.14

Diluting the issue through the use of its glass half-full hypothetical allowed the Eleventh Circuit's decision to appear compelling and establish a First Amendment argument in a way that ignored the nuances of Florida's law. The court clung to the rhetorical charm of its own hypothetical, swiftly asserting that the law unconstitutionally restricted speech through a brief and dismissive intermediate scrutiny analysis.15 The decision's thorough dissent and the lower court's prior dismissal of the First Amendment claim further highlighted the inadequacies of the Eleventh Circuit's holding.16

Obscure as the issue may seem, Dana's Railroad Supply increased tensions around whether anti-surcharge laws regulated speech and possibly violated First Amendment freedoms or whether they lawfully regulated business conduct. Similar invocations of the First Amendment and anti-surcharge laws are prevalent.17 The Supreme Court in Expressions Hair Design v. …

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