Kaycee Land and Livestock v. Flahive
46 P.3d 323, 2002 WY 73 (2002).
Kaycee agreed to let Flahive Oil & Gas use the surface of its property. When Flahive caused environmental damage, Kaycee sued. However, Flahive had no assets.
- Kaycee then attempted to pierce the LLC veil and hold Roger Flahive individually liable.
- Flahive argued that the Wyoming legislature intended to explicitly authorize piercing in the corporate context but, by inference, prevent its application in the LLC context.
Is a claim to pierce the LLC veil the same as it would be to pierce the corporate veil?
- The court held that since Wyoming was the first state to enact LLC statutes, it was unlikely that they took this issue into consideration at the time. However, LLC members shouldn’t be considered impermeable just because of that.
- The court noted that every state that has enacted LLC piercing legislation has chosen to follow corporate law standards.
- With that said, they decided to apply the well established common law to LLCs:
Rule: “We can discern no reason, in either law or policy, to treat LLCs differently than we treat corporations. If the members and officers of an LLC fail to treat it as a separate entity as contemplated by statute, they should not enjoy immunity from individual liability for the LLC’s acts that cause damage to third parties.”
In other words, piercing the corporate veil is the same as piercing the LLC veil.