thank you may please the court for the plaintiffs texas is no surcharge statute like the florida statute recently struck down by the eleventh circuit regulate speech and nothing else the state has not carried its burden to defend that regulation of speech and the law is unconstitutional evade to boot but before explaining why i think the eleventh circuit got it right it why i think the district courts in new york and california got it right as well in striking down similar statutes i'd like to turn to the questions posed by this court in the letter to counsel a few weeks ago but let me just ask you if the statute prohibited privacy then there's no statute and acted back in the eighty's reflects a federal policy of allowing merchants to provide discounts for cash and so the state statute is an act against the backdrop of that federal statute that's not for us to understand the federal statute isn't before you right but i think if you're if you're asking the question that you asked in the letter to counsel which is should we consider an alternative construction of the statute alternative construction by the way that hasn't been proposed by the parties and hasn't been the settled understanding of these statutes i think it is relevant that that interpretation would take you out of the fryer and into the frying pan as it were it would take you out of the first amendment problem but straight into what both runs right into another constitutional problem and let me suggest that the standard that the parties haven't had a chance to brief any of this is about the political poll that questioned and let me suggest the standard that i think should guide your consideration of this question that comes from the supreme court's decision in the second city of houston versus hill that's four eighty two us four fifty one and there the court said if the statute is not obviously susceptible of a limiting construction then even if the statute has never been interpreted by a state tribunal it is the duty of the federal court to exercise its properly invoked jurisdiction and that's a useful case for a number of reasons that case deals with a first amendment challenge it explains why pulman  disfavored in first amendment cases it's also a challenge that came from this court on the bug in which this court explained that in cases involving state statutes for federalism reasons this court should actually be very careful about  federal ban and it was it acted against the backdrop of a federal statute that reflected a strong federal policy of allowing merchants to provide cash discounts it's got to be interpreted against the settled understanding that the state has had throughout this statute and these statute was an act at the same time as many state statutes around the country and nobody disputes that they were all intended to do the same thing as some of those stage statutes actually included specific language that said a merchant may provide a cash discount unfortunately the texas drafters didn't include that particular language but i think the state's going to agree with me when they get up if you look at their brief pages four five and six they quote the sponsor of the of the texas statute he certainly understood that he was that's absolutely right your honor but i think if you if you're considering an interpretation that you know the statute has been on the books since the one nine hundred eighty s nobody has had that interpretation the state hasn't had never heard that if you have a circuit said without that additional charge oh i don't amendment you know i don't i don't think you can simply say that's the next case i mean i think if one is considering a constitution you know construing a statute against the meaning that everyone has thought it has and that runs you right into another constitutional problem it seems to me that that is a relevant consideration and that the supreme court's constitutional avoidance case law makes that clear the standard i read you earlier from from hill says you know only if you have the statues not obviously susceptible to a limiting construction that avoids constitutional problems so so i hope you know i've persuaded you that there's at least something exceedingly odd about interpreting the statute in a way that that nobody nobody has  congress allowed that a lot of laps well let me be clear just barksdale there the sort of two laws it is you it's true of course congress allowed the surcharge band lapse but what that left in place was the original provision it's fifteen c six one six six six f and that statute allows merchants to provide cash discounts to customers and so if you were to read the texas statute in a way that nobody is urging which took to ban all dual pricing you'd run headlong into the federal statute the federal law would be giving merchants are right and you would be reading texas law to foreclose that right it would be pretty close to in possibility preemption as justice thomas puts of the state is changing its position today i think the state we agree with the state and all the other states that have defended these statutes and the state actually as i mentioned notes the preemption problem with it page twenty seven footnote nine of their briefs and i also think you know i want to make sure that i address the court's questions about pullman abstention because i think what the court but what that letter was suggesting at least is the possibility that you could read this statute a certain way or at least the possibility of inappropriate in first amendment cases and in arizona versus official english the supreme court referred to pullman abstention in the past tense as a relic and said that you've got and this this wasn't a first amendment case but if you've got a situation where you're thinking about abstaining the right thing to do is just certified to the state courts and the reason for that is because pullman abstention proved to be a process that resulted in a lot of delay what it essentially says is you could invoke the jurisdiction of the federal courts we actually do have jurisdiction we're not going to hear your case we're going to send you back to state court you don't have to start in the state trial court and work your way up to the state supreme court that's that is a very costly expensive delaying process and it is particularly a bad idea in first amendment cases where there is a chilling effect my clients right now cannot engage in the speech they would like to engage in because of the existence of this law and because they are concerned that they can't engage in dual pricing and confidently instruct their employees that they won't run afoul of the law in the way that the gas station in new york in the fulvio case the first reported prosecution that was a situation in which the gas station owner was trying to do the right thing had a posted cash price had a posted credit card price but an employee made the mistake of telling a customer that it cost five cents more to pay for gas with a credit card and five cents less to pay with with catch rather than five cents less to pay with cash and that simple slip of the tongue resulted in liability under the surcharge statute and i think that's why the eleventh circuit city says in the first page of its opinion it's intolerable to have a statutory scheme where a simple slip of the tongue by a merchant results in a liability this is a you know it's an exceedingly odd statute i'll grant you that it is a statute as the eleventh circuit says that effectively distinguishes between a glass half full and a glass half empty it says that the same objective economic reality is either illegal or legal depending entirely on the on how it's described to the consumer and as that's the florida statute that has the two clauses and the taxes that  know one well some of the stats there are ten statutes around the country they were all in our view about the texas right they were all in acted at the same time some of them have this language about discounts some of them do not but they have all been interpreted uniformly and i can't find i've looked i haven't found any suggestion from any of these statutes that anyone has ever interpreted them as a ban on dual pricing that's not how the state has enforced the law of the state has sent out cease and desist letters that are reflected this understanding that the statute permits cash discounts and prohibits credit card surcharges and if you look at the states authoritative interpretation of the statute rests on that because the state is concerned that it does it wants to be faithful to the law as it was inactive as it was intended and as it was it acted against the backdrop of the federal policy that permits permits cash discounts or so i think you know constitutional avoidance is about the court having some restraint and about being careful of course you want to be careful before you strike down a state statute but this would be the odd case in which in gauging in a in an alternative construction would actually be sort of the opposite that you'd be broadening the statute you'd be  giving the statute a meaning that that nobody has intended and you'd cover all sorts of conduct that federal law gives merchants the right to engage so that would be i think an exceedingly odd use of constitutional sponsor statement quoted in the state's brief as the state has always understood it it's utterly inconsistent with with the state's brief the way the merchants in the regulated community have understood this statute since the one nine hundred eighty s and we live in a national economy so you would you would make texas the only state in the union that suddenly has a policy that's contrary to what's been on the books under federal law since the one nine hundred eighty s that would be a big problem for merchants and you know i think if the court would permit us to provide some constitutional briefing i think that at some supplemental briefing i think the court would benefit from that because these are tricky issues and they do turn on the history of these statutes in the way they've always been interpreted and i think the court the enticing are charged law restricts sellers from charging additional fees when customers buy goods or services with a credit card instead of cash that the district court rightly concluded that the law regulates economic conduct  simple and straightforward terms and the second circuit reached a similar conclusion rejecting the very arguments that the plaintiffs raise here the court should affirm the judgment dismissing both the first amendment and vagueness claims and they just highlight a few points and then i'm happy to address the issues that the court asked us to address by letter to begin with everyone agrees that pricing regulations themselves do not implicate the first amendment and although the speech clause protects sellers ability to communicate and advertise truthful information about unlawful prices it does not restrict the state's ability to regulate the underlying price and conduct itself and the anti surcharge law here regulates pricing conduct not speech i'm going to quote from the statute itself which you didn't really hear from from plaintiffs or in the briefing very much in a sale of goods or services a seller may not impose a surcharge on a buyer who uses a credit card for an extension of credit instead of cash a check or a similar means of payment and that's all it says as the second circuit explained in the expressions case the law unnecessarily assumes that a seller has a regular base price ordinarily that's the sticker price for the posted price for the good or service and then the law restricts sellers from charging credit card customers and additional feet above that regular base price that is not also charged to a cash customer in the district court correctly held that the law effectively sets the maximum price for a credit card purchase as the posted price and that is quintessential pricing regulation in the plaintiff's first amendment claim revolves entirely around the fact that texas does not also restrict sellers from providing discounts to tas paying customers and they argue that texas has broadly authorized dual pricing for casual credit customers and that the state is restricting sellers from communicating that price difference as a surcharge but texas has not broadly authorized or pricing it to the contrary again the anti surcharge law issue here it restricts sellers from charging a credit card customers an additional fee above that regular base price that's not also charged to cash customers  when you say additional i think it has to start with something you are and discount that goes from below that starting point the base price and a surcharge goes above it get not all do a price that is lawful in texas and the first amendment doesn't require states to treat different pricing practices equally even if they could be mathematically expressed in the same way what the first method actions court interpret now and if your are not not not to date but explained the statute allows a merchant to quote offer a cash this customer at a discount close quote but forbids the imposition of a mathematically equivalent quote surcharge on a credit card customer  know i'm not sure off the top of my head what that's referring to but i can tell you that the state has consistently interpreted the statute to allow for cash discounts with meaning and as i was trying to explain that means allowing a seller to offer and provide a a rebate essentially after below the regular base price that's listed when someone pays with cash and if you look at what the plaintiffs are actually complaining about they say and each of them says this in the in the complaint that's at issue here the anti surcharge laws compelling them to set a higher regular base price than they would otherwise prefer to offer if they were allowed to surcharge and then again that just proves that what the what the regulation does is it's regulating pricing because it effectively requires them to build their cost of credit into the regular base price into instead of setting it separately from that regular base price which they'd like to do that's just quintessential pricing regulation that unlike the second circuit expressions case every plaintiff in this  simply wants to charge an additional fee above that regular base price to a customer that pays with a credit card again that that conduct plainly violates the tech the statute there's no reason to reach any more difficult statutory construction questions here because no plaintiff wants to use two separate base prices to put you know a separate regular sticker price for credit and cash that one plaintiff at least wanted to do that in the new york case but no one wants to do that here they each just want to tack on an additional surcharge above regular base price and for similar reasons the anti surcharge not the law is not void for vagueness again because it plainly restricts sellers from imposing and adding additional fees above regular base prices that are not charged tash customers  whether other hypothetical pricing conduct which is not at issue in this case might violate the statute doesn't make it unconstitutionally vague on its face so i'm now i can get now to the questions that the court asked us to address and specifically whether the court should interpret the statute to restrict all forms of dual pricing and again we were largely in agreement with plaintiffs on this question that again the plan language of the statute restricts only surcharge not that surcharge is not any other form of specifically risk allow discounts i mean if you don't restrict them they're presumably allowed and so because they're really about the opposite form of price and conduct the statute to be at like the plain language restricts attacking additional charges above that regular black possibly so but i mean again the legislative history like plaintiffs point out confirms that texas was basically following up when the federal ban on surcharges expired texas and launch of other states stepped in to enact it and federal laws always treated discounts and surcharges differently again the parties here in agreement were not adverse on this state law statutory construction question and there is the possibility for a preemption problem not only because there may be a conflict between federal and state that more but at bottom the best reason not to can construe the statute to to restrict all to a pricing is that if surcharges are actually speech then restricting discounts and other forms of dual pricing in addition to surcharge it wouldn't solve the speech problem it would still be restricting speech so the better way to look at this is that the district court was right and in the first instance the statute restricts a specific form of economic conduct that allows other forms of economic conduct that may be mathematically similar or a reverse form of the surcharge doesn't mean it doesn't create a speech problem and again it with respect to pullman abstention for the same reasons that constitutional avoidance doesn't work  you've got the argument is the plain text of the statute only restricts surcharges it's history shows that that's all texas intended to restrict and it's also not entirely clear how the state law statutory construction question would ever reach a state court because again the parties in this case are not adverse on the on the state law issue and in addition the commission who i represent has exclusive jurisdiction over this provision and there's no private right of action under the  this is an interesting appellate argument because i believe that almost every question that the panel is asked i agree with my colleague from the state about the answer and i want to start by trying to answer the question that u s troops barksdale about the citation in our brief pages seven through eight that's in the record at page two hundred fifty nine and what that cites to is a letter from the office of the consumer credit commissioner to the attorney general of texas because the attorney general head of texas had received a request for an opinion letter about the meaning of the statute and that that opinion letter i think is worth reading in full it's at two fifty eight and let me read you the relevant passage that i think answers your question but but it you know this is a letter that was produced well before this litigation and it's the consistent position the state has taken throughout and that all the other states have taken and here's what the state said read together section three three nine zero one of the texas finance code and fifteen c sixteen sixty six f stands for the proposition that a merchant may offer a tough customer of a discount but may not impose a surcharge on a credit card customer expressed another way if x is the posted price a merchant may charge a cask test customer x minus one but may not charge a cut credit customer x plus one and so you know that's that's consistent with our view and to go to the question that judge davis has asked several times about the definition of surcharge let me suggest that the panel look at fifteen u s c sixteen zero two q which says quote the term discount shall not mean a surcharge so it was understood under the federal law against which was inactive that discount and surcharge were two separate things and this was a very hard fought battle in the one nine hundred eighty s the credit card industry fought very hard once they had lost the battle over dual pricing once dual pricing became federal policy to fight over the label to fight over what merchants were allowed to call that price difference because of the big difference that that label makes in terms of consumer behavior and so it was understood throughout the battle was over the label and i think if you look at the federal definition the fact that this texas statute was enacted against that backdrop in that it's been consistently construed in this way i think and my colleagues concerns about federal preemption i agree entirely with that it is not