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Lawsuit filed in case of teen who died after eating spicy chip
BOSTON | A lawsuit was filed Thursday against Hershey, Walgreens and several others in the case of a Massachusetts teen who died after he participated in a spicy tortilla chip challenge that was widely promoted on social media.
Harris Wolobah, a 10th grader from the city of Worcester, died Sept. 1, 2023, after eating the Paqui chip as part of the manufacturer’s “One Chip Challenge.” An autopsy found Wolobah died after eating a large quantity of chile pepper extract and also had a congenital heart defect.
Harris died of cardiopulmonary arrest “in the setting of recent ingestion of food substance with high capsaicin concentration,” according to the autopsy from the Chief Office of the Medical Examiner. Capsaicin is the component that gives chile peppers their heat. The autopsy also said Harris had cardiomegaly, meaning an enlarged heart, and a congenital defect described as “myocardial bridging of the left anterior descending coronary artery.”
“Today we filed a wrongful death lawsuit on behalf of this wonderful family for the loss of their beloved son, Harris,” said Douglas Sheff, one of the attorneys representing the family in the lawsuit filed in Suffolk Superior Court. The lawsuit seeks a judgement determined by the court that would include punitive damages.
Sheff said the parties created “a perfect storm” that led to Wolobah’s death that included Paqui producing the spicy chip and encouraging people to post videos of themselves eating the chip on social media while the lawsuit alleged Walgreens sold the “poisonous chip” to children.
“The defendants charged about $10 for each chip, $10 for the chip that killed Harris, $10 for his life,” Sheff said. “Isn’t it clear that these defendants knew full well that this chip was unreasonably dangerous? And isn’t this an obvious marketing campaign designed to attract kids to that very danger?”
Lois and Amos Wolobah, the parents of Harris, attended the news conference but did not speak. But at several points, Amos Wolobah appeared to become emotional and Lois seemed to blow a kiss to a photo that was shown of Harris.
The autopsy said Harris Wolobah had cardiomegaly, meaning an enlarged heart, and a congenital defect described as “myocardial bridging of the left anterior descending coronary artery.” But Sheff was adamant that had nothing to do with his death.
“The chip is what killed him,” he said.
Paqui, a Texas-based subsidiary of the Hershey Co., has expressed its sadness about Wolobah’s death but also cited the chip’s “clear and prominent labeling highlighting that the product was not for children or anyone sensitive to spicy foods or with underlying health conditions.”
The Paqui chip, sold individually for about $10, came wrapped in foil in a coffin-shaped box containing the warning that it was intended for the “vengeful pleasure of intense heat and pain.” The warning noted that the chip was for adult consumption only, and should be kept out of the reach of children. After seeing reports of teens and others not heeding those warnings, the company said it worked with retailers to “voluntarily remove the product from shelves in September 2023, and the One Chip Challenge has been discontinued.”
A spokesperson for Walgreens said it had no comment on the lawsuit while Hershey’s did not immediately respond to a request for comment.
Despite the warning, children had no problem buying the chips, and there had been reports from around the country of teens who got sick after taking part in the chip-eating challenge. Among them were three California high school students who were taken to a hospital and seven students in Minnesota who were treated by paramedics after taking part in the challenge in 2022.
The challenge called for participants to eat the Paqui chip and then see how long they could go without consuming other food and water. Sales of the chip seemed largely driven by people posting videos on social media of them or their friends taking the challenge. They showed people, including children, unwrapping the packaging, eating the chips and then reacting to the heat. Some videos showed people gagging, coughing and begging for water and the lawsuit cites scores of examples of people becoming sick after eating the chip.
Harris Wolobah’s death spurred warnings from Massachusetts authorities and physicians, who cautioned that eating such spicy foods can have unintended consequences. Since the chip fad emerged, poison control centers have warned that the concentrated amount could cause allergic reactions, trouble breathing, irregular heartbeats and even heart attacks or strokes.
Sheff said that the lawsuit aims to provide justice to the Wolobah family and serve as a warning “to all those who endanger our children.”
Higher costs and low base fares send Delta’s profit down
Americans are traveling in record numbers this summer, but Delta Air Lines said Thursday that it saw second-quarter profit drop 29% due to higher costs and discounting of base-level fares across the industry.
The airline is also predicting a lower profit than Wall Street expects for the third quarter.
On a call with analysts and reporters, Delta CEO Ed Bastian sent a clear message to low-cost carriers: Slow your growth to end the oversupply of seats on domestic routes.
Delta shares tumbled 6% in midday trading Thursday, and the shares of other carriers were dragged down as well. JetBlue, American, United and Southwest fell between 3% and 6%.
Delta said it earned $1.31 billion from April through June, down from $1.83 billion a year earlier.
Revenue rose 7% to nearly $16.66 billion — a company record for the quarter. That is not surprising to anyone who has been in an airport recently. The Transportation Security Administration screened more than 3 million travelers Sunday, a single-day high.
“Demand has been really strong,” Bastian said in an interview. “International, business (travel), our premium sector all outperformed.”
Delta’s results showed a continuing divide between passengers who sit in the front of the plane and those in economy class. Revenue from premium passengers jumped 10% — about $500 million — but sales in the main cabin were flat with a year earlier.
Wealthier Americans are benefiting from strong gains in stock prices and the value of their homes, according to economists, while middle-class families are more likely to be holding back on spending because high inflation over the last three years has eroded their paychecks.
Delta and United — with their focus on premium customers, a bigger share of business travel and extensive international routes — have emerged from the pandemic as the most profitable U.S. carriers. Others that cater to budget-conscious leisure travelers, including Southwest, JetBlue and Spirit, have posted losses and cut prices to fill seats.
The changing market has caused Southwest to consider adding premium seats for the first time in its half-century history.
“Our more affluent customers are contributing meaningfully to our growth, and that’s why we continue to bring more and more product to them,” Bastian said.
Bastian, however, disputed any notion that middle-class travelers are pulling back on spending. He said it is simply supply and demand — the airline industry, including low-fare carriers, is adding flights even faster than demand is growing, leading to lower fares. “The discounting is in the lower-fare bucket,” he said.
Delta’s passenger-carrying capacity grew 8% in the second quarter, but it plans to throttle back to between 5% and 6% growth in the third quarter. Bastian said other, less-profitable airlines should do the same.
“You cannot, if you are on the lower end of the industry’s food chain, continue to post losses, particularly given the health of the demand set we have all seen over these last couple of years,” he told analysts. “There is a lot of other work that others need to lift … there is only so much more we can do on our own.”
The signal to other airlines about capacity was remarkable. During the Obama administration, the Justice Department investigated whether U.S. carriers colluded by signaling each other during events such as conference calls to raise prices by reducing the number of seats for sale. That investigation ended without charges, although Southwest and American later paid to settle private lawsuits that made similar accusations.
Delta doesn’t disclose average fares, but passengers paid 2% less per mile in the second quarter, and there were a couple more empty seats on the average flight, compared with a year earlier.
Delta’s increase in revenue was more than offset by higher costs. Expenses jumped 10%, with labor, jet fuel, airport fees, airplane maintenance and even the cost of running its oil refinery all rising sharply.
Spending on labor grew 9% over last year. The airline hired thousands of new workers when travel began recovering from the coronavirus pandemic, but hiring now is mostly limited to replacing workers who leave or retire. Delta laid off an undisclosed number of nonunion office employees last fall in a sign that management considered the company overstaffed.
Atlanta-based Delta said its earnings, excluding one-time items, worked out to $2.36 per share, a penny less than the average forecast among analysts in a FactSet survey.
The airline said its adjusted profit in the third quarter will be between $1.70 and $2 per share, below analysts’ forecast of $2.04 per share. Delta repeated its previous prediction that full-year profit will be $6 to $7 per share.
IRS collects milestone $1 billion in back taxes from high-wealth taxpayers
WASHINGTON | The IRS announced Thursday that it has collected $1 billion in back taxes from high-wealth tax cheats — a milestone meant to showcase how the agency is making use of the money it received as part of the Biden administration’s signature climate, health care, and tax package signed into law in 2022.
Part of the push for public awareness of high-wealth tax collections is a growing recognition by agency officials that a potential Republican takeover of the White House and Congress could mean massive future budget cuts for the IRS. Showing the public how much work the IRS is getting done is meant to give the much-maligned agency a more sympathetic image.
As part of that effort, last year the IRS launched a series of initiatives aimed at pursuing high-wealth individuals who have failed to pay their tax debts. The IRS says the campaign is focused on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.
“President Biden’s Inflation Reduction Act is increasing tax fairness and ensuring that all wealthy taxpayers pay the taxes they owe, just like working families do,” Treasury Secretary Janet Yellen said in a statement.
In June, the Treasury proposed a rule and guidance that includes plans to essentially stop “partnership basis shifting” — a process by which a business or person can move assets among a series of related parties to avoid paying taxes. That could raise more than $50 billion in revenue over the next decade, Treasury said.
Other initiatives announced in the past year have included pursuing people and businesses that improperly deduct personal flights on corporate jets and collecting back taxes from delinquent millionaires.
Eugene Steuerle, a fellow and co-founder of the Urban-Brookings Tax Policy Center, said if the IRS “can show they’re having a positive impact and it’s not impacting average American taxpayers, there would be more public support for this activity and the agency.”
“Any increase in government investigations appears like an intrusion,” Steuerle said. He added that if the IRS can show taxpayers how it is conducting its investigations, the broader public may become less fearful of an audit.
Republicans have meanwhile threatened a series of cuts to the IRS, sometimes successfully.
House Republicans built a $1.4 billion reduction to the IRS into the debt ceiling and budget cuts package passed by Congress in the summer of 2023. The deal included a separate agreement to take $20 billion from the IRS over the next two years and divert that money to other non-defense programs.
House Republicans’ fiscal year 2025 proposal out of the Financial Services and General Government Subcommittee in June proposes further cuts to the IRS in 2025, and would cut funding to the Direct File program that is being expanded to allow Americans to file their taxes directly with the IRS.
Demian Brady, vice president of research for the National Taxpayers Union Foundation — says the IRS still targets non-high-wealth partnerships for audits.
“It should also be noted that nearly two-thirds of audits initiated in 2023 were on those making less than $200,000,” Brady said.
Fewer Americans apply for jobless claims last week
Fewer Americans filed for unemployment benefits last week as the labor market remains sturdy despite high interest rates.
The Labor Department reported Thursday that jobless claims for the week ending July 6 fell by 17,000 to 222,000 from 239,000 the previous week.
The total number of Americans collecting unemployment benefits declined for the first time in 10 weeks. About 1.85 million Americans were collecting jobless benefits for the week of June 29, around 4,000 fewer than the previous week.
Economists say that because so-called continuing claims have been on the rise in recent months, it suggests that some who are receiving unemployment benefits are finding it more challenging to land jobs.
Weekly unemployment claims are widely considered as representative of layoffs.
The four-week average of claims, which evens out some of the week-to-week volatility, fell by 5,250 to 233,500.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an attempt to extinguish the four-decade high inflation that shook the economy after it rebounded from the COVID-19 recession of 2020. The Fed’s intention was to cool off a red-hot labor market and slow wage growth, which can fuel inflation.
Many economists had expected the rapid rate hikes would trigger a recession, but so far that hasn’t happened, thanks in large part to strong consumer demand and a resilient labor market. As inflation continues to ease, the Fed’s goal of a soft-landing — bringing down inflation without causing a recession and mass layoffs — appears within reach.
The Fed’s next policy meeting comes at the end of this month, but few experts are expecting a rate cut then. However, investors are betting that there is nearly a 70% chance for a reduction at the Fed’s September meeting.
While the labor market remains historically healthy, recent government data suggest some softness creeping in.
Until last week, applications for jobless benefits were trending higher in June after mostly staying below 220,000 this year. The unemployment rate ticked up to 4.1% in June, despite the fact that America’s employers added 206,000 jobs.
Job postings in May rose slightly to 8.1 million, however, April’s figure was revised lower to 7.9 million, the first reading below 8 million since February 2021.
—From AP reports
