Tuesday, May 17, 2016

Forced supermarket pricing laws are constitutional

When I worked at a supermarket many years ago, we would take the pricing sticker rolls and throw them into the night sky at Shea Stadium and watch them unravel against the stadium lights. A couple of times the stickers landed on the field, in foul territory, but the Mets in the 1980s were bad boys of baseball, and no one raised an eyebrow over what we were doing. Except for the customers at the supermarket who for the next week did not know what anything cost. This was before the days of computer scanners, and if an item had no price sticker, then all hell broke loose at the register. That was not my problem; I was packing out groceries in the aisles. This is probably why some municipalities require supermarkets to put price stickers on consumer goods.

The case is Poughkeepsie Supermarkets v. County of Dutchess, a summary order decided on May 13. The County passed a law in 1991 that requires that price stickers be placed on individual items. Plaintiff says this law constitutes commercial speech in violation of the First Amendment. Now, certain First Amendment protections apply in the commercial context, but the government has more leeway in regulating commercial speech than political or personal speech. It's quite difficult to regulate political speech, but the government has more leeway in justifying restrictions on commercial speech. The Court of Appeals (Carney, Livingston and Pooler) says "an informational disclosure law . . . [is] subject to rational review, that is, a determination of whether the required disclosure is reasonably related to the state’s interest." This "rational basis review" is the kiss of death for plaintiffs who challenge the constitutionality of governmental practices; the government can advance almost any reason to justify the restriction.

The law reads like this:

This Legislature hereby finds and determines that the Consumers in Dutchess County are entitled to clear information, setting forth the prices of consumer commodities which they purchase from retail supermarkets. A clear, easily enforceable item-pricing statute will promote the Dutchess County consumers' right to all reasonable information in order that these consumers are able to make informed choices about their purchases.
The Legislature also finds and declares that there is technology utilizing a laser scanning device offering numerous efficiencies and economies to the operation of the retail food industry. The Legislature further finds that price marking constitutes an indispensable [sic] ingredient to a consumer's right to all reasonable information in order to make an informed purchase choice.
The purpose of this Legislation is to require item pricing to protect the interest of the Consumer public, and to promote useful technology by permitting continued testing and development of the UNIVERSAL PRODUCT CODE CHECK-OUT SYSTEM without the removal of ITEM PRICE.

Under this deferential standard of review, the Second Circuit agrees that plaintiff cannot win the case. The Court reasons as follows:

Although Poughkeepsie Supermarket alleges facts seeking to show that some of the reasons for implementing the law are no longer valid, it failed to allege sufficient facts to demonstrate that the law was not reasonably related to the state’s valid interest in providing complete price information to consumers. The district court therefore correctly granted Dutchess County’s motion to dismiss for failure to state a claim.

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