New York state credit card surcharge law blocked

ALBANY -- A federal judge has ruled that a New York State law that bans merchants from imposing surcharges on customers who pay by credit card is unconstitutional.

Manhattan federal Judge Jed Rakoff ruled Thursday that the law violates merchants' freedom of speech. He said it prohibits them from telling customers about the extra fees they incur for accept credit cards.

Five merchants had filed a lawsuit against New York Attorney General Eric Schneiderman in June challenging the law.

The Wall Street Journal reports that Rakoff granted the retailers' request for a preliminary injunction. But he denied defendants' motion to dismiss the case.

Schneiderman's office said it was reviewing the decision and considering its next step.

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