Credit Card Fees and Florida Statute 501.0117

credit cards

After the Florida Bar changed its rule on credit card fees, an attorney reached out to me still worried about whether lawyers in Florida could lawfully pass on the costs associated with accepting plastic. His concern stemmed from one of Florida’s consumer laws—a “no surcharge” law—that purported to prevent nearly every “seller or lessor in a sales or lease transaction” from “impos[ing] a surcharge on the buyer or lessee for electing to use a credit card in lieu of payment by cash [or] check.” § 501.0117, Fla. Stat.

Without going into the silly special interest language in the statute that provides exceptions for certain kinds of merchants (e.g. private schools), there is an odd exception at the very end where the law “does not apply to the offering of a discount for the purpose of inducing payment by cash [or] check.” `Huh. OK, well how is offering a “discount” for cash any different than a “surcharge” for taking plastic? Newsflash Florida legislature: It’s not.

Did our elected officials think that a discount was materially different than a surcharge? Did they not understand the basic principles of money or economics? Surely they understood that a discount for cash versus a surcharge for plastic were essentially the same? Nope. They wrote it into law anyway.

Well, as it turns out, that exception paved the way for it being held unconstitutional by the Eleventh Circuit Court of Appeals. Dana’s RR Supply v. Fla. Attorney Gen., 807 F. 3d 1235 (11th Cir. 2015). I’m not going to analyze that case here, but suffice to say that the discount exception combined with the criminal penalty for imposing a surcharge was contrary to the free speech clause of the First Amendment. The Eleventh Circuit recognized that the two were equivalent, and struck down the law on the basis that a merchant who simply calls its pricing practice a surcharge goes to jail while the merchant who calls it a discount does not.

The entire statute was struck down, not just a portion of it. So, that law (even while still “on the books” as of the date of this post) does not restrict Florida lawyers from passing along credit card fees to persons paying settlements, judgments, or attorney fees.

The opinion closes with the following observation that I find quite applicable to many laws passed in the name of progress:

Paternalistic efforts at social engineering are anathema to constitutional first principles.

Amen.

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