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Commercial anti-discrimination measure debated in Puerto Rico

By on February 27, 2018

SAN JUAN — During the second public hearing over the bill that seeks to create the Commercial Anti-Discrimination Act, several agencies questioned the measure’s jurisdiction over U.S. companies, in addition to explaining that the difference in prices could be due to business reasons rather than discrimination.

The Puerto Rico Restaurants Association (Asore by its Spanish acronym) stressed that doing business on the island is harder for foreign companies, including those on U.S. soil, due to import costs, the island’s geographical position, and the cabotage law.

Consumer Affairs Secretary Michael Pierluisi expressed himself in favor of the proposed Commercial Anti-Discrimination bill. (Jaime Rivera/CB)

“It is for these reasons that the price a company offers in the U.S. [mainland], it could not offer in Puerto Rico, even though we are American citizens, because the price is not related to citizenship, nor is it due to a discriminatory reason, but rather a business reason,” the presentation reads.

Asore Chairman José Salvatella added that his association has been against the Commercial Anti-Discrimination Office ascribed to the Consumer Affairs Department (DACO by its Spanish acronym) since 2011 because they believe the agency does not have the power to demand domestic and multinational companies the same treatment consumers receive stateside.

“In our opinion, these bills [H.B. 1186 and H.B. 1217] interfere with the Interstate Commerce Clause of the U.S. Constitution and, therefore, could violate it,” Salvatella added.

The Justice Department presented an analysis in which it also pointed out that Rep. José Aponte’s bill could “in some way” violate the “dormant” Commerce Clause, referring to the prohibition against states passing legislation that burdens interstate commerce.

Attorney Juan Carlos Ramírez said the bill contains vague language, specifically in practices considered “discriminatory actions.” Since the proposal would allow DACO to impose a $10,000 fine per violation, Justice said the three definitions of discrimination included in the measure were not sufficient.

In the bill, discriminatory practices include differences in “access, sale, products, goods, services, guarantees and delivery”; selling more expensive products in Puerto Rico; and not offering residents benefits such as gift cards.

“The determination, as to whether H.B. 1217 violates the Commerce Clause in its dormant state, would have to be made by a state or federal court based on its interpretation of the statute and its effects on interstate commerce,” Ramírez said.

Faced with opposition from  Justice, Aponte stressed that DACO already has the power to impose fines and that “we have to give [DACO] claws to defend Puerto Rican consumers.”

“We have to enforce [in Puerto Rico] what is a given in any of the 50 states,” the lawmaker said. “We have to finish breaking that [practice], it’s not politics, it’s civil rights, it’s the equality for American citizens, regardless of whether they live in Puerto Rico, the [U.S.] Virgin Islands, Hawaii or Alaska, wherever.”

The Puerto Rico Retail Trade Association also opposed the measure on the grounds that it would not benefit consumers and could “serve as a deterrent for companies to offer their goods or services in Puerto Rico.”

No complaints filed

At the House Consumer Affairs, Banking & Insurance Committee hearing, DACO Secretary Michael Pierluisi said his agency has not received “formal complaints” against businesses that exercise commercial discrimination, “but rather some informal complaints the Department was receiving.”

Pierluisi was in favor of the proposal to create the Commercial Anti-Discrimination Act, as well as H.B. 1186, which essentially proposes to lawfully empower the Commercial Anti-Discrimination Office created by former DACO secretary and current Secretary of State Luis Rivera Marín.

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