Are corporations people? Warren pondered the issue as bankruptcy specialist

By Noah Bierman, Globe Staff

Elizabeth Warren drew her biggest applause Wednesday night with a stinging retort to Mitt Romney’s assertion that “corporations aren’t people.”

“No, Governor Romney, corporations are not people. People have hearts, they have kids, they get jobs, they get sick, they cry, they dance. They live, they love, and they die,” she said.

It was a line Warren has used before to great effect.

Warren, a Harvard Law School bankruptcy specialist, has, in fact, been looking at this issue from a legal perspective for three decades, reaching somewhat ambiguous conclusions on where the law stands.

The Warren campaign said Thursday that Romney was addressing tax policy, not bankruptcy law. And it said Warren has consistently said that bankruptcy law maintains a clear distinction between how corporations and people are treated — even if that treatment can vary under differing circumstances.

In 1984, a paper published as part of a roundtable discussion involving Warren and three other bankruptcy specialists included a reference to the legal definition of personhood. In this instance, the bankruptcy panel appeared to agree that the law then treated corporations as “people” for the purposes of bankruptcy.

“American law recognizes two types of ‘persons’ – corporations and ‘actual persons,’ and both types of ‘person’ may declare bankruptcy,” the panel said, according to the summary paper.

In 2005, she wrote a paper for the American Bankruptcy Institute Journal with Jay Westbrook of the University of Texas Law School, a frequent collaborator. In the paper, they reviewed three bankruptcy cases where the owners of small businesses were at risk of owing debts owed by their businesses.

“Over time, the identity between the corporation and the individual merge — at least in the mind of the owner,” they write. “But the law takes a very different view when the business gets in trouble.”

The authors do not offer their personal opinion on the nexus between a person and a business he or she owns, but instead interpret the meaning of judicial rulings.

“In these and other cases,” they write, “the fusion of owner and corporation seem to swim in and out of focus, merged or separated in the dynamic interaction of economic turmoil.”