The U.S. Supreme Court made two key decisions this week. One pertains to litigation involving merchants, card networks and banks. The other pertains to New York’s state law prohibiting merchants from adding a surcharge to credit card payments.
First, on March 27, 2017, the Court declined to hear a bid by merchants to essentially resurrect the lawsuit settlement, finalized in 2013, involving MasterCard, Visa, and some banks. The settlement was later negated (in June 2016) by the U.S. Second Circuit Court of Appeals, based on their perspective that merchants were not properly represented.
To summarize this saga:
- Initial settlement of interchange lawsuit in 2012; as one result, MasterCard and Visa began to allow surcharging in the United States in January 2013 (as long as merchants adhered to specific rules)
- Final approval of the settlement at the end of 2013
- Merchants appealed; the appeal ruling in 2016 favored merchants, negating the settlement
- In 2017, U.S. Supreme Court declines to get involved
Back to square one. We can expect ongoing litigation between merchants and card networks related to card acceptance fees.
Next, on March 29, 2017, the U.S. Supreme Court concluded New York’s no surcharge law regulates speech because it regulates the communication of prices. They remanded the Court of Appeals to analyze NY’s law as a speech regulation and determine whether it is unconstitutional, violating the First Amendment.
For more information, visit the Surcharge News webpage.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…
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