## Facts

- Kaycee Land and Livestock, a Wyoming partnership, contracted with Flahive Oil & Gas, LLC to allow the LLC to use the surface of Kaycee’s Johnson County, Wyoming property.
- Kaycee alleged the LLC’s operations caused environmental contamination to its property.
- Flahive Oil & Gas, LLC allegedly had no assets at the relevant time.
- Roger Flahive was the LLC’s managing member during the relevant period.
- Kaycee sought to disregard the LLC’s separate existence and hold Flahive personally liable for the alleged contamination.
- Kaycee made no allegation of fraud.
- The District Court of Johnson County certified a question of law to the Wyoming Supreme Court under W.R.A.P. 11.

## Issues

1. In the absence of fraud, may a Wyoming court pierce an LLC’s entity veil or disregard the LLC in the same manner as corporate veil-piercing under Wyoming law?
2. Does the Wyoming Limited Liability Company Act preclude veil-piercing because it does not expressly authorize it?

## Decision

- The Wyoming Supreme Court answered the certified question yes: an LLC’s entity veil may be pierced in the same manner as a corporation’s veil.
- The court held fraud is not a prerequisite to piercing an LLC’s veil.
- The court rejected the argument that legislative silence in the LLC statute bars the equitable remedy of veil-piercing.

## Legal Principles

- Veil-piercing is an equitable, judicially created doctrine used to prevent injustice or inequitable consequences when an entity’s separateness is misused.
- Wyoming courts may apply traditional corporate veil-piercing concepts to LLCs; LLCs are not categorically immune from veil-piercing.
- The absence of an express veil-piercing provision in the Wyoming LLC Act does not foreclose courts from applying equitable veil-piercing principles.
- Fraud is not required for veil-piercing; equitable grounds that justify piercing in corporate cases may justify piercing an LLC’s veil when the entity is treated as a mere instrumentality or alter ego.

## Conclusion

The Wyoming Supreme Court held that LLC limited liability is not absolute: courts may disregard an LLC’s separate existence and impose personal liability on members or managers under the same equitable veil-piercing principles used for corporations, even without an allegation of fraud.


Kaycee Land & Livestock v. Flahive, 46 P.3d 323 (Wyo. 2002)