Elizabeth Warren’s Days Defending Big Corporations

Elizabeth Warren had never taken on the federal government before.

But in 1995, she found herself up against the Clinton administration, representing the Cleveland-based conglomerate LTV Steel.

Even though LTV had sold off its coal mines during the 1980s, a new law required it to contribute to a health fund for retired miners.

LTV believed that it should not have to pay. Those claims, the company said, should have been handled as part of its bankruptcy reorganization.

Ms. Warren’s job was to convince the Supreme Court to hear LTV’s case.

The court declined, but for Ms. Warren, the issue would fester. Over a decade later, when she ran for the Senate from Massachusetts in 2012, the Republican incumbent, Senator Scott Brown of Massachusetts, tried to use her work for LTV against her, unleashing an ad calling her a “hired gun” who sided “against working people.” Notwithstanding the attack, Mr. Brown lost his seat to Ms. Warren.

The LTV case was part of a considerable body of legal work that Ms. Warren, one of the nation’s leading bankruptcy experts, took on while working as a law professor — moonlighting that earned her hundreds of thousands of dollars over roughly two decades beginning in the late 1980s, mostly while she was on the faculty at Harvard. Much of it involved representing big corporate clients.

Ms. Warren has ascended toward the head of the Democratic presidential pack on the strength of her populist appeal and progressive plans, which include breaking up big technology companies, free public college and a wealth tax on the richest Americans. Her political opponents, in turn, have sought to exploit a weak spot on issues of authenticity — chiefly Ms. Warren’s handling of her claim to Native American ancestry.

Against that backdrop, some of Ms. Warren’s critics have seized upon her bankruptcy work for LTV and other big corporations to question the depth of her progressive bona fides. How, they wonder, could someone whose reputation is built on consumer advocacy have represented a company seeking to avoid paying for retired miners’ health care?

Ms. Warren’s campaign did not make her available to discuss her outside legal work, though it did provide email responses to some questions. But over the years, Ms. Warren has twice released accounts of her practice — a partial list of cases during the 2012 Senate race and a fuller list of more than 50 cases posted to her presidential campaign website in May.

Among her corporate clients were Travelers insurance and the aircraft maker Fairchild, as well as one of America’s wealthiest families, the Hunts of Texas. She advocated for railroad company that wanted to avoid paying for a Superfund cleanup, and advised Dow Chemical as its subsidiary Dow Corning dealt with thousands of complaints from women who said they had been harmed by its silicone breast implants.

But she also worked on a number of cases involving consumer bankruptcy and victims’ rights in asbestos litigation, served as an expert in a lawsuit against the cigarette maker Philip Morris and represented the lawyer whose battles with polluters inspired the film “A Civil Action.”

In very brief and simplified summaries, the lists cast much of her work — even for corporate clients — in terms that align with her pro-consumer narrative. Those descriptions have themselves become a focus of some contention.

But a review by The New York Times, together with interviews with several of Ms. Warren’s former compatriots in the rarefied world of self-described bankruptcy nerds, reveals a complex picture in which many cases defy simple black or white categorization. It also offers a look at a relatively unexamined aspect of her thinking.

Her work, the scholars say, should be understood primarily as an effort to preserve the right to file for bankruptcy and the integrity of the bankruptcy system.

“As far as I can tell, the kind of positions she took were positions that were completely consistent with someone who was dedicated to the value of the bankruptcy process,” said Douglas G. Baird, a University of Chicago Law School bankruptcy expert who differs philosophically from Ms. Warren on some issues in the field and says he is not a political supporter.

Indeed, in her most recent list of cases, Ms. Warren wrote that bankruptcy “inevitably pits sympathetic interests against each other — current victims against future victims, employees against retirees and small suppliers against customers who didn’t get what they were promised.” The challenge, she concluded, is “balancing all of these interests in the fairest way possible.”

Mr. Baird also suggested that in some cases, Ms. Warren was simply advocating for clients, not necessarily with an eye toward the future popularity of her positions. Lawyers, he said, are not ideologues, but are to some extent “plumbers or mechanics trying to be zealous advocates for their clients.”

Ms. Warren has acknowledged that for much of her long and varied career she was not politically engaged and had no plan to run for public office. Until 1996, she was registered as a Republican.

In taking on outside clients, Ms. Warren augmented her salary at Harvard, where she was among the most highly paid faculty members. In 1998, the Harvard Crimson reported that she was paid $192,550 in salary plus $133,450 in “other compensation.”

It is not possible to tell how much Ms. Warren made from her legal consultancy, and she declined to reveal the amount, but it was clearly more than $500,000 and probably much more. Most of the work fell outside the period when she was required to submit financial disclosure reports.

Travelers paid her more than $200,000 over several years for advice on dealing with asbestos claims against its insured, Johns Manville.

In 2010, Ms. Warren was paid $90,000 to write two expert opinions on behalf of merchants who were suing credit card companies and banks, alleging antitrust violations in processing fees. Because she was heading up the congressional panel monitoring the bank bailout at the time, Senator Richard Shelby, Republican of Alabama, raised questions about whether the work presented a conflict of interest. Some conflict-of-interest provisions had been waived, however, because members of the panel were experts who served part-time.

For her work with Caplin & Drysdale, a firm representing plaintiffs in a number of asbestos-related cases, Ms. Warren billed $675 an hour, in line with what partners in top New York firms charged at the time.

While some law professors look askance at outside work, regarding it as impure, most schools permit it, and Harvard has encouraged it, according to Randall L. Kennedy, a law professor there and former colleague of Ms. Warren.

“The idea that you would be in government, you would be consulted, you would be a big shot in the legal profession, I think that was viewed as one of the distinctive parts of the Harvard Law School ethos,” said Mr. Kennedy, who noted out that some of his best-known colleagues maintained very active practices. “That’s how we roll.”

Credit Slips

It is an unglamorous area of law, and it rarely makes news. That’s why the bankruptcy nerds who post to a blog called Credit Slips were shocked in 2012 when a decade-old bankruptcy case became a hot political topic.

“LTV has amazingly become an issue in the U.S. Senate race in Massachusetts,” wrote John A. E. Pottow, a former Harvard student of Ms. Warren who teaches bankruptcy at the University of Michigan Law School. “A bankruptcy case!”

Ms. Warren’s record in the LTV case is a textbook example of how complex legal matters can be seen in vastly different ways. Viewed through a layman’s eyes, Ms. Warren appeared to be fighting against working people. Some bankruptcy experts, however, viewed her motivations as more far-reaching — aimed at preserving a system that ultimately offers working people some measure of protection.

The origins of the 1995 case dated back to the Truman administration. To settle a coal miners strike, the federal government forged an agreement that miners would have health care coverage when they retired, provided by their last employer. Over the years, as demand for coal declined, companies closed their mines and stopped paying these benefits.

To remedy the problem, in 1992, Congress passed the Coal Industry Retiree Health Benefit Act, to provide benefits for more than 100,000 retired miners. Each company that had operated coal mines, even those no longer in the business, would be required to pay into a fund for their retirees.

LTV objected to paying into the fund. The company had filed for bankruptcy in 1986, resolving claims from thousands of employees. The Coal Act, LTV now argued, retroactively imposed new liabilities based on events that had taken place years earlier and that therefore should have been resolved during bankruptcy.

The Second Circuit Court of Appeals disagreed, ruling that LTV’s liabilities were not technically “claims” under the bankruptcy code because they had been created by a new act of Congress.

Ms. Warren’s campaign has said she engaged in outside legal work primarily when there was a larger issue at stake, which is what Mr. Baird believed she had in mind when she agreed to represent LTV in its Supreme Court petition.

“Can Congress make that law apply retroactively even to firms that have had their day of reckoning in bankruptcy?” Mr. Baird said. “If you believe in the bankruptcy system, you can argue that you shouldn’t do this retroactive second-guessing.”

In her petition asking the Supreme Court to review the decision, Ms. Warren wrote that bankruptcy “contemplates that all legal obligations of the debtor, no matter how remote or contingent, will be dealt with by the bankruptcy case.”

“The Second Circuit,” she added, “threatens to erode that concept, with serious implications for future bankruptcies.”

This year, nearly 15 years after the Supreme Court declined to review the case, Ms. Warren’s campaign described her work this way:

“In this case, Elizabeth represented a company that was asking the Supreme Court to reverse a lower court’s ruling that limited the ability of future employees, retirees and victims to receive any compensation at all from bankrupt companies.”

A Day of Reckoning

In bankruptcy, there is a day of reckoning, the point at which a debtor’s accounts are squared.

As with LTV, several of Ms. Warren’s more prominent cases involved questions of what happens when claims arise after that day. Such claims are regarded as potentially eroding the system and undermining the chance for a “fresh start” for companies and individuals that file bankruptcy.

Ms. Warren at one point praised how the system gave a second chance to several well-known companies, including one of Donald J. Trump’s businesses.

“General Motors, Trump Enterprises, Hershey Foods and dozens of other well-known companies all survived early bankruptcies, she wrote in 2009. “Second chances opened the way for Francis Ford Coppola, Willie Nelson and Mark Twain to leave their marks on world cinema, music and literature.”

Any development that undermines that principle is “going to create a mess in the bankruptcy system,” said Adam J. Levitin, a professor at Georgetown University Law Center who studied under Ms. Warren. He added, “If all these new liabilities start appearing, the bankruptcy system doesn’t work.”

In one case that turned on these issues, Ms. Warren found herself on the same side as Kenneth Starr, who at the time was also the independent counsel leading a long-running investigation of the Clinton White House.

The case involved a company called CMC Heartland Partners and a Superfund site near Tacoma, Wash., named one of the 10 most hazardous in the country.

CMC Heartland was the successor company to the Chicago, Milwaukee, St. Paul & Pacific Railroad Company — known colloquially as the Milwaukee Road — which had filed for bankruptcy in 1977.

Union Pacific Railroad subsequently acquired the company’s old Tacoma rail yards, where it discovered an environmental disaster of oil and other industrial waste. When CMC refused to pay for the cleanup — arguing that the claims were barred by its predecessor company’s bankruptcy — Union Pacific sued.

In 1996, after a federal appeals court ruled against CMC, Ms. Warren filed a brief asking the solicitor general to support a Supreme Court review.

The implications of allowing the lower court ruling to stand, Ms. Warren argued, would be profound “for those who are trying to put the assets of those businesses back into productive use, for those who face uncompensated injuries and for those who have other claims against the business.”

The Supreme Court declined to hear the case.

Another such case, in 1995, involved Fairchild, the aircraft manufacturer. Two years before, a well-known NASCAR driver named Alan Kulwicki and three associates had been killed when their Fairchild Merlin crashed near Blountville, Tenn.

In a lawsuit, survivors of the four dead men sought compensation from Fairchild, arguing that their death was related to a defect in the aircraft and that, even though the manufacturer had filed for bankruptcy and been taken over by a newly established company, the new company should be liable.

Ms. Warren represented the new company, arguing that it had bought Fairchild’s assets free and clear of claims and should not be responsible for ongoing liabilities of planes made by the old bankrupt company.

Her campaign has said she was trying to save the new company and its 1,000 jobs. One of the opposing lawyers, James A. Hoffman of San Antonio, put it differently. “Her position in our matter was that these people are simply out of luck,” he said.

Ms. Warren lost, but the case was later settled, and the National Transportation Safety Board ultimately ruled that the crash had not been caused by an aircraft defect.

Big Cajun

In quite a few cases, Ms. Warren came down clearly on the side of the consumer.

Yet some of the case descriptions released by her campaign, seemingly written to portray Ms. Warren’s work for corporate clients in the most consumer- or victim-friendly light, have prompted criticism from lawyers on opposing sides.

In its responses to The New York Times, the campaign said the summaries were written in an effort to make “complicated cases accessible while maintaining accuracy.”

Among the cases whose summaries have provoked criticism was the long-running bankruptcy of Cajun Electric Power Cooperative, a large nonprofit utility based in Baton Rouge, La., that provided power to 12 member cooperatives.

When Cajun Electric filed for bankruptcy in 1994, a bidding war ensued for control of Cajun’s assets, notably Big Cajun, a coal-fired power plant worth an estimated $1 billion. One of the bidders was SWEPCO, a utility company based in Shreveport, La.

That was when SWEPCO, desperate to remain in the bidding for Big Cajun, called Ms. Warren, who carried the day. The Fifth Circuit Court of Appeals in New Orleans overturned the judge’s ruling, breathing new life into SWEPCO’s play.

But while she won the battle, SWEPCO ultimately did not capture the big prize. Louisiana Generating, known as LaGen, took over Big Cajun in 2000.

Matt J. Farley, a New Orleans lawyer who represented LaGen, recently said he regarded Ms. Warren as a bankruptcy “heavy hitter” who had done a good job for her client.

Mr. Farley, who describes himself as a political independent, said he saw a contradiction in 2012 when he first read her Senate campaign’s description of her work in the Cajun Electric case: “Elizabeth represented a company that offered a plan to help save a bankrupt rural power cooperative.” It is the same description given by her presidential campaign.

Ms. Warren’s client, SWEPCO, had offered lower electric rates in its proposal than the other bidders. But Mr. Farley believes that the summary is misleading.

“I can’t imagine that Warren really believes that she was helping to save a rural power cooperative,” Mr. Farley wrote in 2012 on a blog called Legal Insurrection. He added, “This was nothing more or less than high-stakes corporate litigation.”

The campaign’s synopsis of Ms. Warren’s work on the Dow Corning breast-implant case has also raised some eyebrows.

“Thanks in part to Elizabeth’s efforts, Dow Corning created a $2.35 billion fund to compensate women claiming injury,” the description said.

The exact nature of Ms. Warren’s work for Dow is not clear. Ms. Warren’s campaign said she advised Dow Chemical, the parent company, as it worked with most of the plaintiffs to defend the victims’ trust fund. Some of the plaintiffs had objected to the trust.

But Sybil Goldrich, a breast-implant victim and trustee for claimants in the 1995 bankruptcy case, has said Ms. Warren was “on the wrong side” of the litigation as the company worked to contain corporate damage related to the claims.

Other summaries released by the campaign omitted key details.

Describing Ms. Warren’s work in a 1989 Internal Revenue Service case, the summary says she worked to “help the tax court.” The summary does not specify that she was retained by one of Texas’s wealthiest families, the Hunts, in a tax dispute about how much various members owed to the I.R.S. after they tried to corner the silver market.