A federal appeals court says it is constitutional for New York state to ban merchants from passing along credit card transaction fees to their customers.

The 2nd U.S. Circuit Court of Appeals ruled Tuesday in Manhattan.

It overturned a lower-court judge who had sided with five businesses, including a hair salon, an ice cream parlor and a liquor store. They had claimed in a 2013 lawsuit that the law violated their First Amendment and due process rights.

The lawsuit pertained to a fee each merchant must pay to the credit-card issuer each time a customer charges a purchase.

Lawyers for the plaintiffs did not immediately respond to requests for comment.

Attorney General Eric Schneiderman applauded the ruling.

(AP)