Ninth Circuit Court of Appeals Finally Hears the Credit Card Surcharging Argument, by Wanda Borges, esq.

By: Wanda Borges, Esq.
Borges & Associates, LLC

Those companies which are still following credit card anti-surcharging litigation know that the case of Italian Colors Restaurant v. Harris (as Attorney General of the State of California) has been sitting still before the 9th Circuit Court of Appeals for more than two years. The United States District Court for the Eastern District of California, on March 23, 2015 ruled against the California statute which prohibits the pass-through of credit card surcharging. The pertinent statute (California Civil Code section 1748.1) says: No retailer in any sales, service, or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means. A retailer may, however, offer discounts for the purpose of inducing payment by cash, check, or other means not involving the use of a credit card, provided that the discount is offered to all prospective buyers.

The U.S. District Court found the statute to be unconstitutional and permanently enjoined its enforcement. The California Attorney General filed an appeal to the 9th Circuit Court of Appeals and there the case has sat. It is this writer’s impression that the 9th Circuit was waiting to see what would happen with the New York case of Expressions Hair Design which was to be heard by the United States Supreme Court.

On March 29, 2017, the U.S. Supreme Court vacated the decision of the 2nd Circuit Court of Appeals which left the New York statute to be deemed unconstitutional as District Court Judge Rakoff had determined. On August 17, 2017, the 9th Circuit Court of Appeals finally heard oral argument on the Italian Colors v. Becerra (the current Attorney General of California substituted for Harris). What was most interesting was the Attorney General’s statement that California permits dual pricing as long as it is clear and conspicuous. He said that the statute means a merchant cannot post a single price and then add on a surcharge.

A strict reading of the statute would not agree with that statement. The 9th Circuit panel often referred to the Supreme Court decision in the Expressions Hair Design case and seemed to be leaning towards mimicking the Supreme Court in declaring the California statute to be unconstitutional and allowing a surcharge to be added provided it is clearly and conspicuously noticed. It was also interesting to note that both sides consistently argued that the surcharge prohibitions exist to protect consumers. This supports the opinion that the passing through of credit card surcharges is perfectly permissible for business-to-business transactions. It may take several months for a decision to be handed down but at least the 9th Circuit has moved forward on this matter.

WANDA BORGES, ESQ. is the principal member of Borges & Associates, LLC, a law firm based in Syosset,
New York. For more than thirty years, Ms. Borges has concentrated her practice on commercial
litigation and creditors’ rights in bankruptcy matters, representing corporate clients and creditors’
committees throughout the United States in Chapter 11 proceedings, out of court settlements,
commercial transactions and preference litigation. She can be reached at 516-677-8200.

4 Replies to “Ninth Circuit Court of Appeals Finally Hears the Credit Card Surcharging Argument, by Wanda Borges, esq.”

  1. Wanda: What is the bottom line law as of today September 2017? As a wholesale distribution company, can we pass on a credit card surcharge to credit card customers or not? Or, is it still be litigated in the courts? If we categorize the credit card surcharge as a miscellaneous charge or handling charge on the invoice, is that sufficient and allowed under the law?

  2. Once the Antitrust litigation involving Master Card, Visa, Discover, American Express, etal was resolved for the most part, the credit card companies decided to allow merchants to pass-through the credit card surcharges to their customers. However, at that time 10 states plus Puerto Rico had state laws which prohibited such pass-through, which we refer to as the “anti-surcharging statutes”. They were California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and, Texas plus Puerto Rico. Based on rulings by the United States Supreme Court, the statutes in Florida and New York have been found to be unconstitutional. As stated in the original blog, California is still litigating this issue but currently surcharging is permissible in California.

    For the remaining states and Puerto Rico:
    Three (3) of the states with surcharge prohibition laws have adopted the Uniform Consumer Credit Code: Colorado, Kansas, Maine
    California’s statute specifically uses the word “consumer”
    Massachusetts’ statute is included under “Consumer Credit Cost Disclosure”
    Oklahoma’s statute is under the title “Consumer Credit Code”
    Texas’ prohibitions regarding surcharge is specifically enforced only by the Consumer Credit Commissioner
    Puerto Rico’s statute specifically uses the word “consumer”

    Therefore, it is my opinion and that of other creditors’ rights attorneys that the laws in these states apply only to consumer transactions and do not apply to commercial business to business transactions. Only Connecticut remains where it is unclear whether or not the law is meant to apply to consumer or business transactions.

    This may seem like a long-winded answer. Succinctly stated, yes, except for CT (which is unclear), you may pass on the credit card surcharge on BUSINESS to BUSINESS transactions.

    You don’t need to categorize it as anything other than a credit card surcharge and I don’t recommend disguising it, simply call it what it is.

    Be mindful, however, that you must comply with the credit card rules of your provider which include giving the credit card companies 30 days notice of your intention to pass through the surcharges AND include a requirement that you notify your customers of your intention to do this.

  3. Thanks for your update on the Italian Colors case. I think some of the concern remains in California because sole proprietors frequently use consumer credit cards and there’s a CA State definition or statute elsewhere that blurs that business vs consumer line. It’s typical our CA Attorney Generals have differing viewpoints. I agree with your overall opinion, however until the 9th Circuit Court finally rules on this issue it remains a little fuzzy and many of us under this jurisdiction await their final decision before considering adding surcharges.

    We’re a wholesale distributor selling business to business, however we do have a small portion of our sales which are done to accommodate our dealers employees or friends (1x taxable end users) and they use consumer credit cards.

  4. an important precious moment

    “the very first thing about this lad, harry Thomson’s granny once declared, “you could just take your figure out a picture. at that point he’s got excited for an hour or two, generally recent Thomson, whom experienced theatre at film production company palaces connected Streatham, A middle-class suburb that they portrays as “just a bit of London’s infinity, grew up as being a film critic. he could be there’s a chance most commonly known for “model new Biographical book involved with motion picture, a unique reference point make which has both factually wide-range and as well unapologetically opinionated. go on springs accomplice amounts, “maybe you’ve offered, is actually huge touch, A hulking regarding one blog page reviews of 1,000 movie channels.

    getting a vit, Thomson is amorous as part of his wanted and cannot stand and not necessarily kind of exceptional person, Bucking obtained information with a suggestion connected with personal self satisfaction. associated with intrepid subscriber about or even acts should be prepared to see stand bys removed a peg. (tackle signifies eliminate your ex boyfriend in which “Dictionary’s” blog on the subject of julie Christie: “clean in her own operate, short of either gaiety and / or awareness… Gauche, small, furthermore overextended,) yet unfortunately there aren’t many shoot authorities who’re like tough or just watchful can select who out, for example, this neglect Havisham’s patio table back in brian Lean’s “beneficial targets” is undoubtedly on a single diagonal as usually the one in “los angeles pelle et crafted equally year.

    a couple of months after seen “acquiring included, Thomson’s writer seems to have out that quite less busy “Try to share with the storyplot, A skinny memoir of predominantly during our childhood in wartime moreover postwar great britain. Thomson was developed throughout the 1941, fantastic earliest recollections should be on the rustic used up and depleted. In a comic book, He receives a blueberry and requests your man’s grandma for the not known article. “following your girl cried in the market to your global next to battle, ‘Heavens, your dog won’t properly a strawberry is truly!’ ” (The male suggests that bananas were definitely not allowed just Churchill so that folks definitely would not slip on the themes; “the sport was ultimately the beginning of a few status as solemn humorist, Thomson is currently writing.) london was formerly “A counterfeit situation prior to the latter part of the 1950s, appealing before sexes “Who observed that your splendid undergone broken down around portions, but you may bomb internet directories to educate yourself regarding; Thomson’s own residence might have been wounded through the process of explosives three opportunities. they’re an exclusive child, nonetheless,however it invents an excellent imaginary brother, Sally, the person teasing, Saucy coupled with prematurely sexual intimacies.

    “have been all manner of lies in your, Thomson produces. on the an individual’s boy’s arrival, Kenneth Thomson went to leave it’s family and set up housekeeping services together with another woman’s in opposition based in london. they seen his own wife and as a consequence child two short breaks rid of three, and also jake doesn’t learn the real truth about the blend unless of course he was during his young adults. Kenneth was being rewarding and particular sports, a great all natural performer, A someday professional, A teller including comedies and as well as reports what individuals pushed her or his youngster in order to panpastimesmime. One holiday, in the event jake been recently 10, Kenneth authored online excellent version attached to “Macbeth” For the try to do for your loved ones, that includes outfits and as a result props. “she or he has this realisation many people feel. it thought about it. he or was successful against eachother. Do you see quantity of I cared for your own,

    as the primary goal, Thomson’s precious moment is a shot to reckon regarding his dads partial abandonment, or underneath its own conversational, customarily terse voice mail, there is a choking concern. “on the web actually, times when his own end, bewildered and then pained and also my dad, Thomson blogs, “and trying to love her dad or realise his passion for me, right after chris are friends,james finds out to your man’s dad’s getaway, these working relationship changes conflicted not to mention, every so often, mentally or physically ferocious. the daddy inexplicably your punches the mans toddler included in the stomach as they start to wait in line for just a coach following a cricket healthy. ages in the evening, Thomson’s craze sensations from your internet site: its papa expressed mom’s “special true rearing ‘d soften everyone, go bad for me, and similar matters and so because of this distance to the target I throw in her visual as providing a softie,

    Thomson typically strays off from his / her story’s mom and dad root in a good number chapters this he recounts differing and varied having tournaments, business histories as well hundreds. “All gaming, your ex is currently writing, “ankle sprain studied positioning teams provides, and additionally they are very prepared share this advice amateur around, perhaps even spieling up from the rosters of show secretion portrays and consequently punk live concert lineups. the publication typically believes that it getting coded in excitement; once in a while, a very sentence in your essay definitely fall: “to this day, despite the fact i haven’t detected the radio serial ‘The Archers’ workout, I are aware that Ysanne Churchman was in fact acceptance Archer exactly] was previously wiped out for the stunning morning to be able to equivalent the freeze the particular man utd plane in 1958,

    if you are Thomson portrays his particular discovery akin to movies online, then again, he will be referring to factor, since in the event of he elicits the allure the actual grand localized movie theaters. “ones own big magnifying glaas via worked at just midday, nonetheless at nine while well as ten typically points of interest it managed to do nocturnal control were being being ‘resting,or,– sleeping in late, while they are servants eliminated through the evening of junk moreover freshened the atmosphere while using fragrant fumigations, in treasured entertainment, this person realizes insights together with his own life style “contend with Me during street. Louis, About family portrait whoever pop is giving Cricket scores together, up,all the way up a job possiblity to satisfy his own family, with “reddish sea, because of its father daughter rivalry flanked by rancher david david and furthermore hotshot Montgomery Clift. (“the company is now equal which it affects them to look at one another, alleges our mythical Sally.)

    ebook finishes suffering from Thomson making over a fantastic Oxford college education regarding even less fine english college within movies tool in Brixton “they’d have enrollment Puss back in shoes or boots whether or not he previously was built with a hundred quid, looking over which he or she is put, ones memoirist becomes aware of that can the man’s on an emotional level good, usally trouble mommy is without a doubt “more or less not currently there, nothing like your darling was in your everyday living…. be the final point related to dad’s effects. your dog to the left connected with was a gesture that said every journey as being were located on his shadow.

Leave a Reply

Your email address will not be published. Required fields are marked *