Asociacion de Detallistas de Gasolina de PR Inc. v. Commonwealth of Puerto Rico

U.S. Court of Appeals for the First Circuit
Asociacion de Detallistas de Gasolina de PR Inc. v. Commonwealth of Puerto Rico, 138 F.4th 686 (1st Cir. 2025)

Asociacion de Detallistas de Gasolina de PR Inc. v. Commonwealth of Puerto Rico

Opinion

            United States Court of Appeals
                        For the First Circuit


No. 24-1188

ASOCIACIÓN DE DETALLISTAS DE GASOLINA DE PUERTO RICO, INC.; A&E
      SERVICE STATION, INC.; ANTONIO A. JUAN LEON; BAJURAS
  DEVELOPMENT, INC.; SAMI DAVIS SULEIMAN ABDELMAJED; Q&P FUEL
MANAGEMENT, LLC; MEGA PUMA 129, INC.; MEGA JL, INC.; L&F SERVICE
 STATION, INC.; JOSÉ J. ARROYO NOVOA, d/b/a Garage Arroyo; WCL
   CORPORATION; MARACAIBO PETROLEUM, CORP.; ORLANDO GONZÁLEZ
   HERNÁNDEZ, d/b/a Raholisa Service Station; MATILDE COLLAZO
VIERA, d/b/a Green Valley Service Station; JOSÉ A. COLÓN ALONSO,
  d/b/a Mobil Orocovis, Shell Utuado, and Gulf Utuado; ONCE 11
  CORP.; JANET TORRES PAGÁN, d/b/a Gulf Aibonito; R2 BUSINESS,
  INC.; LUIS C. CRESPO ORTIZ, d/b/a Apolo Texaco; COOPERATIVA
              GASOLINERA Y SERVICIOS BUENA VISTA,

                       Plaintiffs, Appellants,

                                  v.

    COMMONWEALTH OF PUERTO RICO, represented by its Governor Hon.
    Jenniffer González-Colón; HON. JANET PARRA MERCADO, as Interim
      Attorney General of the Commonwealth of Puerto Rico; HON.
      VALERIE RODRÍGUEZ ERAZO, as Secretary of the Department of
                   Consumer Affairs of Puerto Rico,

                       Defendants, Appellees.


            APPEAL FROM THE UNITED STATES DISTRICT COURT
                  FOR THE DISTRICT OF PUERTO RICO

         [Hon. Raúl M. Arias-Marxuach, U.S. District Judge]


                                Before


    Public   officers' successors  have  been   automatically
substituted as parties pursuant to Federal Rules of Appellate
Procedure 43(c)(2).
                       Barron, Chief Judge,
              Gelpí and Montecalvo, Circuit Judges.


     Andrés C. Gorbea-Del Valle for appellants.

     Omar J. Andino-Figueroa, Deputy Solicitor General, with whom
Fernando Figueroa-Santiago, Solicitor General of Puerto Rico, and
Mariola Abreu-Acevedo, Assistant Solicitor General, were on brief,
for appellees.


                          May 29, 2025
           GELPÍ,      Circuit     Judge.             Plaintiffs-Appellants           are

organizations and individuals who own or operate gasoline service

stations throughout Puerto Rico, as well as a nonprofit corporation

that represents more than 450 such businesses.                        To reduce the

transaction     fees    they      owed     to    card       companies,       Appellants

incentivized consumers to pay in cash by offering two different

prices: a higher posted price for consumers using credit or debit

cards and a lower price for those paying with cash.                            In 2013,

however, Puerto Rico's legislature enacted Law 152-2013, which

amended   Law   150-2008     by    removing       a   provision       that   expressly

permitted merchants to offer discounts to consumers who paid for

goods and services in cash.              Since then, Appellants have ceased

offering the lower posted price because of the threat of fines and

criminal prosecution.        Appellants sued the Commonwealth of Puerto

Rico ("the Commonwealth")1 to enjoin Law 150, arguing first that

it   is   preempted     by     federal      law       and    second     that     it   is

unconstitutionally      vague.       The    district        court     rejected    those

arguments and granted the Commonwealth's motion to dismiss for

failure to state a claim.           Appellants challenge that ruling on

appeal, advancing the same arguments.


1    The Commonwealth is represented by the following individuals
in their official capacity: Hon. Jenniffer González-Colón,
Governor of Puerto Rico; Hon. Janet Parra Mercado, Interim Attorney
General of Puerto Rico; and Hon. Valerie Rodríguez Erazo, Secretary
of the Department of Consumer Affairs of Puerto Rico ("DACO," by
its Spanish acronym).


                                         - 3 -
          For the reasons stated below, we affirm.

                             I. BACKGROUND

          We begin with a summary of the facts, taking               "the

complaint's   well-pleaded    facts   as     true"   and   drawing   "all

reasonable inferences in [Appellants'] favor."       Frese v. Formella,

53 F.4th 1, 5
 (1st Cir. 2022) (quoting Barchock v. CVS Health

Corp., 
886 F.3d 43, 48
 (1st Cir. 2018)).

                       A. Relevant Statutes

          To place Appellants' preemption argument "in context, we

provide a brief overview of applicable federal and state regulation

and then trace the interaction of the two schemes."              Grant's

Dairy-Me., LLC. v. Comm'r of Me. Dep't of Agric., Food & Rural

Res., 
232 F.3d 8, 11
 (1st Cir. 2000).

                    i. Puerto Rico Regulation

          Merchants generally pay a transaction fee to the card

issuer every time a consumer uses a debit or credit card to pay

for their goods and services.    This "swipe fee," as it is commonly

known within the credit card industry, typically ranges from 2% to

3% of the transaction total.     To reduce the impact of the "swipe

fee" expense, merchants sought to discourage customers from paying

with a debit or credit card by charging a surcharge for card

transactions or offering a discount for paying with cash.

          The Puerto Rico legislature enacted Law 150-2008 ("Law

150") in 2008.   
P.R. Laws Ann. tit. 10, § 11
 (2008).          Article 1


                                - 4 -
provided, in relevant part, "[n]o merchant may impose a surcharge

on   a   consumer    who    chooses     to    use    a    credit      card   instead   of

cash . . . ."        
Id.
     Article 2 stated, in relevant part, "[t]he

merchant may, however, offer discounts for the purpose of promoting

the payment in cash . . . ."                 
Id.
     While Article 1 prohibited

merchants     from    imposing        credit       card    surcharges,       Article   2

recognized a merchants' right to provide discounts to consumers

who choose to pay for services in cash.                   
Id.
   According to Article

4, merchants in violation of Law 150 "shall be penalized with" a

fine of up to five hundred dollars ($500) or up to six months in

prison, or both.       
Id.

            Five years later, in 2013, the Puerto Rico legislature

amended Law 150 with the enactment of Law 152-2013 ("Law 152").

P.R. Laws Ann. tit. 10, § 11
 (2013).                 That law eliminated Article

2 of Law 150.         
Id.
       In repealing Article 2, the Puerto Rico

legislature stated that its purpose was "to eliminate the duality

and coexistence of parallel markets" and that it was fulfilling

its duty to "protect the weakest party in a commercial transaction,

the consumer."       
Id.

            Pursuant       to   Law    152's       amendment     to    Law    150,   DACO

promulgated    Administrative          Order       2014-002     ("Order      2014-002").

Aff.,         Order             2014-002             (Jan.            21,        2014),

https://www.daco.pr.gov/orden/orden-2014-002/




                                        - 5 -
[https://perma.cc/7EUM-4CR8].2          That order interpreted Law 152 as

having eliminated "the use of discounts as an incentive to pay in

cash" and, in turn, repealed or amended previous DACO orders

pursuant to that interpretation.          
Id.
 § II.

               Appellants represent more than 450 retailers who own or

operate over 600 gasoline stations in Puerto Rico.                   The "swipe

fee" is the fourth largest business expense for most Appellants.

To encourage cash payments, Appellants displayed dual prices for

their goods and services: one price for costumers paying with a

debit or credit card and a discounted price for those paying in

cash.   Appellants subsequently sued the Commonwealth to prevent

the enforcement of Law 150, as amended by Law 152.3

                          ii. Federal Regulation

                           a. TILA and the CDA

           In    1968,   Congress   passed       the   Truth   in   Lending   Act

("TILA"), 
Pub. L. No. 90-321, 82
 Stat. 146 (1968) (codified as

amended at 
15 U.S.C. § 1601
 et seq.), to promote the "informed use

of   credit"    by   consumers   and,    among    other   things,    "assure   a



2    Appellants have filed certified translations of all
supporting materials originally produced in Spanish as required by
the Jones Act, 
48 U.S.C. § 864
.           See United States v.
Rivera-Rosario, 
300 F.3d 1, 5
 (1st Cir. 2002) ("It is clear, to
the point of perfect transparency, that federal court proceedings
must be conducted in English.").
3    Henceforth, we refer to Law 150 to mean Law 150 as amended by
Law 152 unless otherwise noted.


                                    - 6 -
meaningful disclosure of credit terms so that the consumer will be

able to compare more readily the various credit terms available to

him and avoid the uninformed use of credit."       
Id.
 § 102.

          Six years later, Congress amended the TILA through the

Fair Credit Billing Act, 
Pub. L. No. 93-495, 88
 Stat. 1511 (1974)

(codified as amended at 
15 U.S.C. § 1601
 et seq.), to continue

protecting   "consumer[s]   against   inaccurate   and   unfair   credit

billing and credit card practices," 
id.
 § 102.      A key provision of

the Fair Credit Billing Act provided that "card issuer[s] may not,

by contract or otherwise, prohibit any [seller other than the card

issuer] from offering a discount to a cardholder to induce the

cardholder to pay by cash, check, or similar means rather than use

a credit card."    Id. sec. 306, § 167(a).    The TILA defines "card

issuer" as "any person who issues a credit card, or the agent of

such person with respect to such card."      
15 U.S.C. § 1602
(o).

          Later, in 1981, Congress amended the TILA once again

with the passage of the Cash Discount Act ("CDA"), 
Pub. L. No. 97-25, 95
 Stat. 144 (1981).     The CDA's stated purpose was "[t]o

amend [the TILA] to encourage cash discounts, and for other

purposes."   
Id.
   As relevant to this case, the CDA provides that

any discount sellers offered to induce consumers to pay in cash

does not "constitute a finance charge" if the discount is "offered

to all prospective buyers and its availability is disclosed clearly

and conspicuously." 
Id.
 § 101(b) (codified as amended at 15 U.S.C.


                                - 7 -
§ 1666f(b)).    A "finance charge," as defined in the TILA, is "the

sum of all charges, payable directly or indirectly by the person

to whom the credit is extended, and imposed directly or indirectly

by the creditor as an incident to the extension of credit."                 
15 U.S.C. § 1605
(a).      Section 1666f(b) complemented other sections

throughout the TILA which specify finance charges, among things

like annual percentage rate, as information that creditors must

"clearly and conspicuously" disclose to consumers.            
Id.
 § 1632(a);

see also id. §§ 1637, 1638 (disclosure requirements).

                           b. Durbin Amendment

          In 2010, Congress passed the Dodd-Frank Wall Street

Reform and Consumer Protection Act ("Dodd-Frank"), 
Pub. L. No. 111-203, 124
 Stat. 1376 (2010), to enhance accountability and

transparency    in   the   nation's   financial     system.     As   part    of

Dodd-Frank,    Congress    also   passed    the   Durbin   Amendment,   which

modified the Electronic Fund Transfer Act, 
Pub. L. 95-630, 92
 Stat.

3641 (1978) (codified as amended at 15 U.S.C. 1693 et seq.).

          The Durbin Amendment contains two key provisions related

to cash discounts. The first provides that a "payment card network

shall not . . . inhibit the ability of any person to provide a

discount or in-kind incentive for payment by the use of cash."              15

U.S.C. § 1693o-2(b)(2)(A).        The second provides that "the network

may not penalize any person for the providing of a discount that

is in compliance with Federal law and applicable State law."                Id.


                                    - 8 -
§ 1693o-2(b)(2)(B).      The statute defines "payment card network" as

"an   entity      that . . . provides       the     proprietary       services,

infrastructure, and software that route information and data to

conduct   debit   card   or   credit    card   transaction     authorization,

clearance, and settlement."       Id. § 1693o-2(c)(11).

                          B. Procedural History

           Appellants first challenged Law 150 and Order 2014-002

in federal court on January 30, 2014.             Asociación de Detallistas

de Gasolina de P.R., Inc. v. Commonwealth of Puerto Rico, 
18 F.Supp.3d 99
 (D.P.R. 2014).       At the time, Appellants argued that

Law 150 was preempted by federal law and unconstitutionally vague

under constitutional due process.          
Id. at 100
.     The Commonwealth

moved to dismiss, arguing that the court should abstain from

considering    Appellants'     vagueness       claim   under    the     Pullman

abstention doctrine, which advises a federal court to abstain from

considering a federal constitutional claim when it is based on an

unsettled question of state law.           
Id.
 at 101 (citing Texas v.

Pullman, 
312 U.S. 496
 (1941)).         The district court agreed with the

Commonwealth, finding the intent of the Puerto Rico legislature to

be unclear "regarding the offering of cash discounts in repealing

Article 2" since its stated goal in doing so "was to correct

pricing disparity but also 'to protect the weakest party in a

commercial transaction, the consumer.'"            
Id.
 at 103 (quoting 
P.R. Laws Ann. tit. 10, § 11
 (2013)).         So the district court concluded


                                   - 9 -
that the Puerto Rico legislature's motive in amending Law 150 "must

be subject to the interpretation of the state courts, as a federal

judge should be hard-pressed to trailblaze undetermined state law,

especially      declaring       the     same     unconstitutional."         
Id.

Accordingly, the district court dismissed                 Appellants'   claims,

without prejudice.      
Id. at 105
.

           Following the district court's ruling, Appellants filed

suit   before   the    Puerto    Rico   Court    of   First   Instance.     See

Asociación de Detallistas de Gasolina de P.R., Inc., et al. v.

Estado Libre Asociado de P.R., et al., No. KAC2014-0539, 
2016 WL 6471328
, at *1 (P.R. Cir., Sept. 30, 2016), cert. denied, P.R.

Supreme   Court,      No.   CC-2017-0239.         That    court   agreed   with

Appellants, holding that Law 150 did not prohibit the use of

discounts as incentives for cash payments, if Appellants complied

with the applicable signage requirements and/or regulations.                
Id.

Accordingly,    the    court    enjoined   DACO    from   "impeding     gasoline

retailers from offering discounts on the price of gasoline when

the payment method is in cash."            
Id.
     However, the Puerto Rico

Court of Appeals reversed said judgment on September 30, 2016,

finding that the Puerto Rico legislature "clearly intended to

eliminate the possibility that two different prices for the same

good or service could be imposed based solely on the method of




                                      - 10 -
payment."    
Id., at *6
.          The Supreme Court of Puerto Rico declined

to consider Appellants' appeal.

            On April 11, 2023, Appellants renewed their federal suit

to halt the enforcement of Law 150.                    Before the district court,

Appellants    argued       that    the   CDA    and     the    Durbin   Amendment    to

Dodd-Frank recognized the right of retailers to offer discounts to

customers who decide to pay for their products and services in

cash.      Thus,    they    argued,      Law    150     presents   an    obstacle   to

accomplish the objectives of both federal laws and is accordingly

preempted.        The Commonwealth, in turn, moved to dismiss the

complaint, contending that no conflict preemption exists between

the CDA and the Durbin Amendment, on the one hand, and Law 150, on

the other hand, since those federal statutes only regulate the

relationship       between        card   issuers        and    retailers    and     the

relationship between payment card networks and retailers, not the

relationship between retailers and consumers.

            The     district       court       sided    with     the    Commonwealth,

concluding that the CDA and the Durbin Amendment do not preempt

Law 150.    In so ruling, the district court noted that although the

CDA's stated purpose is to "encourage cash discounts," a purpose

statement     cannot       override      a     statute's       operative    language.

Regarding the Durbin Amendment, the district court noted that its

relevant provisions are directed at "payment card networks," not

the states.        Accordingly, the district court held that "neither


                                         - 11 -
the plain language nor the objective of either the CDA or Durbin

Amendment support[ed] Plaintiffs' theory of conflict preemption as

to Law 150."      The district court further declined to address

Appellants' constitutional vagueness argument, finding that the

complaint did not allege that Law 150 is unconstitutionally vague.

In accordance with these findings, the district court granted the

Commonwealth's motion to dismiss.             Appellants timely appealed the

district court's decision.          This court has jurisdiction pursuant

to 
28 U.S.C. § 1291
.

                           II. STANDARD OF REVIEW

            "We   review    de    novo    a    dismissal    pursuant   to     Rule

12(b)(6)." Thornton v. Ipsen Biopharmaceuticals, Inc., 
126 F.4th 76, 80
 (1st Cir. 2025) (citing Lowe v. Mills, 
68 F.4th 706, 713

(1st Cir. 2023)).     When reviewing a district court's grant of a

motion to dismiss for failure to state a claim, "we may affirm on

any independently sufficient grounds made manifest by the record."

Bower v. Egyptair Airlines Co., 
731 F.3d 85, 92
 (1st Cir. 2013).

                                 III. DISCUSSION

            Appellants press two arguments on appeal.               First, they

argue that Law 150 frustrates the purposes of the CDA and the

Durbin   Amendment:    namely,       to       encourage    cash   discounts     by

conferring upon merchants a right to offer discounts for cash

payments.     Because Puerto Rico law prohibits a practice that

federal law encourages, Appellants assert, Law 150 conflicts with


                                     - 12 -
federal law and thus is preempted.           Second, Appellants argue that

Law 150 is unconstitutionally vague because it is not clear on the

legality of cash payments.          We first consider their preemption

argument.

                             A. Preemption

            The Supremacy Clause of the U.S. Constitution bestows

upon Congress the power to preempt state laws.                 See U.S. Const.

art. VI, cl. 2 ("This Constitution, and the Laws of the United

States . . . shall be the supreme Law of the Land . . . ."); see

also Me. Forest Prods. Council v. Cormier, 
51 F.4th 1, 6
 (1st Cir.

2022).   "For preemption purposes, the laws of Puerto Rico are the

functional equivalent of state laws."             Antilles Cement Corp. v.

Fortuño, 
670 F.3d 310, 323
 (1st Cir. 2012) (citing P.R. Dep't of

Consumer Affs. v. Isla Petroleum Corp., 
485 U.S. 495, 499
 (1988)).

            Preemption can be "expressed or implied."                 Medicaid &

Medicare    Advantage   Prods.     Ass'n    of   P.R.,   Inc.    v.    Emanuelli

Hernández, 
58 F.4th 5, 11
 (1st Cir. 2023) (quoting Gade v. Nat'l

Solid Wastes Mgmt. Ass'n, 
505 U.S. 88, 98
 (1992)).                       Implied

preemption can take one of two forms: field preemption or obstacle

preemption.    Obstacle preemption occurs "either when compliance

with both state and federal regulations is impossible or when state

law   interposes   an   obstacle    to     the   achievement    of    Congress's

discernible objectives."      Grant's Dairy-Me., LLC, 
232 F.3d at 15

(citing Gade, 
505 U.S. at 98
). "Cases of obstacle preemption (like


                                   - 13 -
all forms of preemption) fit into the following mold: 'Congress

enacts a law that imposes restrictions or confers rights on private

actors; a state law confers rights or imposes restrictions that

conflict with the federal law; and therefore the federal law takes

precedence and the state law is preempted.'"   Cormier, 
51 F.4th at 6
 (quoting Murphy v. Nat'l Collegiate Athletic Ass'n, 
584 U.S. 453, 477
 (2018)).   "What is a sufficient obstacle is a matter of

judgment, to be informed by examining the federal statute as a

whole and identifying its purpose and intended effects . . . ."

Crosby v. Nat'l Foreign Trade Council, 
530 U.S. 363, 373
 (2000)

(emphasis added).

          Here, Appellants argue only that Law 150 frustrates the

objectives of both the CDA and the Durbin Amendment, which in

Appellants' view is to encourage discounts for cash payments.

Thus, only obstacle preemption is implicated here.       With that

framework in mind, we now turn to the text and purpose of the

federal statutes, beginning with the CDA.

                              i. CDA

          Appellants first argue that the purposes of the CDA and

Law 150 are obviously in conflict, pointing to the expressly stated

purpose of the CDA as proof of Congress's unambiguous intent to

preempt any laws that prohibits discounts for cash payments.   See

Cash Discount Act, 
Pub. L. No. 97-25, 95
 Stat. 144, 144 (1981)

("To amend the Truth in Lending Act to encourage cash discounts,


                              - 14 -
and for other purposes." (emphasis added)).                But our inquiry into

congressional intent does not end with a statute's statement of

purpose.      See   Sturgeon   v.    Frost,    
587 U.S. 28
,    56–57   (2019)

(explaining    that   statements      of   purpose        "cannot     override   [a

statute's]    operative   language"        (alteration         in    the   original)

(quoting A. Scalia & B. Garner, Reading Law: The Interpretation of

Legal Texts 220 (2012)).            Thus, we must analyze the operative

language of the statute.

           The CDA, by amending the TILA, seeks to "encourage cash

discounts" by, among other things, clarifying that any discount

sellers offered to induce consumers to pay in cash would not

"constitute a finance charge" if certain conditions were met.                     15

U.S.C. § 1666f(b).      The TILA requires creditors to disclose the

"finance charge"      to consumers.         Id.    § 1632(a); see also           id.

§§ 1637, 1638 (disclosure requirements).                By amending the TILA to

allow any cash discount to be excluded from the "finance charge"

if "such discount is offered to all prospective buyers and its

availability    is    disclosed      clearly      and    conspicuously,"       Cash

Discount Act, § 101, the CDA relieves credit card issuers of the

obligation to disclose -- as part of the "finance charge" -- any

price differential between the cash price and the credit card price

that results from such cash discounts.                  The CDA thereby allows




                                     - 15 -
sellers to offer cash discounts that they previously would not

have been able to offer.        See S. Rep. No. 97-23, at 1-2 (1981).

              Read in context and in relevant part, it is evident that

Congress intended for the TILA, the statute which the CDA amended,

to regulate the conduct of credit card issuers and entities like

them with respect to cash discounts -- not merchants, states, or

territories.        Congress's intent is evidenced by section 1666f(a),

which clearly identifies card issuers, and section 1666f(b), which

regulates what is and is not a finance charge, a matter most

relevant to credit issuers.           As the Commonwealth is not a credit

card issuer as defined in section 1602(o), nothing in the TILA (or

the CDA) prevents it from prohibiting merchants to offer discounts

to consumers who pay in cash.          Hence, insofar as those provisions

are relevant to assessing Congress's objectives in enacting the

CDA,   they    at    most   provide    support   for   the   conclusion   that

Congress's purpose was to encourage cash discounts by regulating

the conduct of card issuers.          And Law 150 does not pose an obstacle

to the accomplishment of that objective.

              Appellants also aver that the CDA creates a right for

merchants to offer discounts in exchange for cash payments.                 If

so, Law 150 would be clearly preempted by denying a right conferred

in federal law.       Appellants point to Section 1666f(b) of the TILA,

as amended by section 101(b) of the CDA, to support their claim.

That section of the CDA, however, simply clarified that any


                                      - 16 -
discount sellers offered to induce consumers to pay in cash would

not "constitute a finance charge" if certain conditions were met.

Cash Discount Act, § 101(b).           Thus, the operative language of the

CDA does not support Appellants' contention that it conferred upon

merchants an absolute right to offer cash discounts.                    Since the

CDA did not create such a right, the federal statute can coexist

with Law 150.         For these reasons, the CDA does not preempt Law

150.

                              ii. Durbin Amendment

            Next, we consider whether the Durbin Amendment preempts

Law 150, beginning with its text.              The Durbin Amendment provides

that "[a] payment card network shall not . . . inhibit the ability

of any person to provide a discount or in-kind incentive for

payment    by   the    use   of    cash."      15    U.S.C.   § 1693o-2(b)(2)(A)

(emphasis added).       A "payment card network" is statutorily defined

as   "an   entity     that . . . provides           the   proprietary   services,

infrastructure, and software that route information and data to

conduct    debit    card     or   credit    card    transaction   authorization,

clearance, and settlement."                15 U.S.C. § 1693o-2(c)(11).        The

operative statutory language thus makes clear that Congress did

not intend for the Durbin Amendment to grant merchants an absolute

right to offer cash discounts.                 Rather, Congress intended to

regulate the conduct of payment card networks -- i.e., to prohibit

such networks from preventing merchants from offering a discounted


                                      - 17 -
price to customers who paid in cash for their services.                     Because

the text of the statute is clear as to the identity of the party

it is meant to regulate, that is where our inquiry ends.               See Nat'l

Ass'n    of    Mfrs.   v.   Dep't   of   Def.,   
583 U.S. 109, 127
    (2018)

(affirming that our inquiry begins and ends with the statutory

text if a provision is unambiguous).              The Durbin Amendment does

not preempt Law 150.

               Still, Appellants insist that Law 150 undermines the

"objective and purpose" of the Durbin Amendment.               Appellants point

to statements from Senator Durbin to suggest that Congress adopted

the Durbin Amendment to "give small businesses and merchants and

their customers across America a real chance in the fight against

the outrageously high swipe fees charged by Visa and Mastercard

Credit card companies."         156 Cong. Rec. S4977 (daily ed. June 16,

2010) (statement of Sen. Durbin); 156 Cong. Rec. S4839 (daily ed.

June 10, 2010) (statement of Sen. Durbin).                Inasmuch as Law 150

prohibits cash discounts, Appellants argue, the law constitutes an

obstacle       to   accomplishing    Congress's        objectives.      But,     as

explained above, the Durbin Amendment regulates the conduct of

credit card payment networks, not the states.                  Thus, we see no

basis to conclude that the Durbin Amendment evinces Congress's

intent    to    encourage    cash   discounts     by    preempting    any    state




                                     - 18 -
legislation that restricts the ability of merchants to offer such

discounts.

                       B. Constitutional Vagueness

            Last,      Appellants           argue        that        Law        150    is

unconstitutionally      vague       in    violation      of     constitutional        due

process.     The district court declined to consider this argument,

however, concluding that Appellants failed to properly allege in

its   complaint      that     Law    150    was     unconstitutionally            vague.

Appellants     now     contend       that     they       plausibly          pleaded     a

constitutional       vagueness      argument        in   paragraph         41    of   the

complaint.        Paragraph    41 asserts         in relevant part           that "Law

152-2013 did not prohibit retailers from offering discounts to

consumers who chose to pay in cash; the law simply eliminated the

article    that    established      said     right."          Such   a     pleading    is

insufficient to preserve the issue on appeal.                   As we have repeated

with regularity, "litigants must spell out their legal theories

face-up and squarely in the trial court" to preserve the issue.

Massó-Torrellas v. Mun. of Toa Alta, 
845 F.3d 461, 466
 (1st Cir.

2017) (quoting Thomas v. Rhode Island, 
542 F.3d 944, 949
 (1st Cir.

2008)).    Because Appellants did not properly plead a vagueness

claim in their complaint, that claim is deemed unpreserved for

purposes of appellate review.




                                         - 19 -
                          IV. CONCLUSION

         For   the   foregoing    reasons,   we   affirm   the   district

court's grant of the Commonwealth's motion to dismiss.




                                 - 20 -


Reference

Cited By
1 case
Status
Published