Appeals court: New York state can ban credit card surcharges

This Wednesday, June 10, 2015 photo shows a chip credit card in Philadelphia. Even as an October 1 deadline approaches to switch Americans over to credit cards embedded with chips, the vast majority still does not have the new cards and only some are using them as intended, a new Associated Press-GfK poll shows. (AP Photo/Matt Rourke)

NEW YORK (AP) – A federal appeals court says it is constitutional for New York State to ban merchants from passing along credit card transaction fees to their customers.

The 2nd U.S. Circuit Court of Appeals ruled Tuesday in Manhattan.

It overturned a lower-court judge who had sided with five businesses, including a hair salon, an ice cream parlor and a liquor store. They had claimed in a 2013 lawsuit that the law violated their First Amendment and due process rights.

The lawsuit pertained to a fee each merchant must pay to the credit-card issuer each time a customer charges a purchase.

Lawyers for the plaintiffs did not immediately respond to requests for comment.

Attorney General Eric Schneiderman applauded the ruling.

(Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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