Judge blocks New York credit card surcharge law

A federal judge on Thursday blocked enforcement of a New York state law that subjects retailers to criminal penalties if they impose surcharges on customers who choose to pay by credit card rather than cash.

U.S. District Judge Jed Rakoff in Manhattan ruled in favor of several retailers who challenged the law on various grounds, including that it violated their free speech rights by prohibiting them from alerting customers to the extra costs of paying with credit cards.

Rakoff said the law violated the First Amendment of the U.S. Constitution, saying it "perpetuates consumer confusion by preventing sellers from using the most effective means at their disposal to educate consumers about the true costs of credit-card usage."

(Reporting by Jonathan Stempel in New York; Editing by Lisa Von Ahn)