Dana's Railroad Supply v. Attorney General, State of Florida
807 F.3d 1235
11th Cir.2015Background
- Four Florida small businesses (Dana’s Railroad Supply; TM Jewelry LLC; Tallahassee Discount Furniture; Cook’s Sport-land) received cease-and-desist letters from the Florida Attorney General for posting/communicating extra charges for credit-card payments and sued under 42 U.S.C. § 1983.
- Florida statute § 501.0117 bans imposing a “surcharge” for credit-card use but expressly permits offering a cash discount; violation is a second-degree misdemeanor.
- Plaintiffs sought a declaration that the statute is facially unconstitutional under the First Amendment and void for vagueness; district court dismissed, treating the law as economic regulation subject to rational-basis review.
- The Eleventh Circuit framed the threshold question as whether the statute regulates speech (triggering First Amendment scrutiny) or conduct (rational-basis).
- The panel concluded the statute targets expression (it forbids calling a price difference a “surcharge” while permitting calling it a “discount”) and therefore is a content- and viewpoint-based restriction on speech.
- Applying heightened scrutiny (the court used intermediate scrutiny for commercial speech but noted the statute would fail strict scrutiny as well), the court held § 501.0117 fails Central Hudson: it does not directly advance a substantial interest and is not narrowly tailored.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 501.0117 regulates speech or conduct | § 501.0117 criminalizes merchants’ expression (labeling a price difference a “surcharge”), not economic conduct | The statute regulates pricing conduct (imposing an additional amount at time of sale), not protected speech | Regulates speech: statute targets how merchants describe price differences (content- and viewpoint-based) |
| Level of First Amendment scrutiny applicable | Plaintiffs: content- and viewpoint-based restriction; view it as full First Amendment protection | State: commercial-speech context warrants intermediate scrutiny or rational-basis because it touches pricing | Court: statute is content-, speaker-, and viewpoint-based; analyzed under intermediate commercial-speech standard and found it would fail even that; would also fail strict scrutiny |
| Validity under Central Hudson (commercial-speech test) | Plaintiffs: prohibition on labeling is not misleading and is protected commercial speech; State lacks substantial interest or narrow fit | State: consumer-protection interests (anti–bait-and-switch, notice, level playing field) justify law | Held: fails Central Hudson — speech not misleading; asserted interests are weak and law does not directly advance them nor is it narrowly tailored; less-restrictive alternatives exist |
| Vagueness / standing / pre-enforcement challenge | Plaintiffs: law chills speech and is vague; pre-enforcement relief appropriate because cease-and-desist letters threatened criminal penalties | State: enforcement posture and interpretations limit challenge; statute can be read to target conduct | Court: plaintiffs have standing; did not need to resolve vagueness because statute fails heightened scrutiny; facial challenge succeeds as applied to the statute’s plain meaning |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires injury in fact, causation, redressability)
- Wooley v. Maynard, 430 U.S. 705 (government may not compel or restrict messages based on content)
- Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (commercial-speech intermediate-scrutiny test)
- Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, 425 U.S. 748 (First Amendment protection for commercial information)
- Cohen v. California, 403 U.S. 15 (word choice can be integral to protected expression)
- Rumsfeld v. Forum for Acad. & Inst. Rights, Inc., 547 U.S. 47 (distinguishing regulation of conduct from regulation of speech)
- Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626 (disclosure requirements for commercial speech)
- Barnette v. West Virginia State Board of Education, 319 U.S. 624 (viewpoint compulsion forbidden)
- Giboney v. Empire Storage & Ice Co., 336 U.S. 490 (speech integral to unlawful conduct may be regulated)
- Expressions Hair Design v. Schneiderman, 803 F.3d 94 (2d Cir.) (upholding New York no-surcharge law under a narrow statutory reading)