Harris

MEMORANDUM AND ORDER

This action challenges the constitutionality of section 1748.1 of the California Civil Code, which states in subsection (a):

If a retailer imposes a surcharge, the cardholder is entitled to recover three times the amount of actual damages, plus attorney’s fees and costs. Id. § 1748.1(b).

Plaintiffs are five California businesses — a restaurant, gas station, dry cleaners, transmission repair business, and web design company — and their respective owners. They filed this action against the California Attorney General, in her official capacity, alleging that section 1748.1 violates the First Amendment as an unlawful restriction on commercial speech because the statute regulates how retailers can describe the price difference between cash and credit purchases. 1 For example, a retailer could charge $102 for a product and give a $2 discount, but could not charge $100 and impose a $2 surcharge, despite the situations being mathematically equivalent. Thus, the statute restricts how this $2 price difference is presented to the consumer. Plaintiffs also allege that the statute violates the Due Process Clause of the Fourteenth Amendment because the law is void for…