Dolce & Gabbana's U.S. subsidiary has escaped a class-action lawsuit regarding its parent company's alleged abandonment of a non-fungible token (NFT) project.
In a ruling on Friday (July 11), U.S. District Judge Naomi Reice Buchwald supported Dolce & Gabbana USA Inc., dismissing the lawsuit because it was not a "mere alter ego" of its Italian parent company, Dolce & Gabbana SRL.
A group of NFT buyers filed the lawsuit in May 2024, claiming that Dolce & Gabbana and its U.S. subsidiary "are essentially the same company," failing to deliver on their "DGFamily" NFT project launched in 2022 and retaining over $25 million from it.
With Dolce & Gabbana USA being the only U.S. defendant, the future of the lawsuit is uncertain. Dubai's NFT marketplace UNXD Inc. and Italy's Bluebear Italia SRL—creators of an NFT series called "inBetweeners"—were also named as defendants, but the court noted they had not been served with the complaint.
The complaint alleges that Dolce & Gabbana and UNXD jointly created and promoted DGFamily, promising buyers "high-value" benefits quarterly for two years.
Some of the promised benefits reportedly included digital clothing for the Decentraland metaverse, physical clothing, and live events for NFT holders.
However, the lawsuit claims that Dolce & Gabbana "failed to provide the full benefits they promised" and retained millions of dollars from NFT sales.
Dolce & Gabbana USA filed a motion to dismiss the lawsuit in January, arguing that it is an independent entity and cannot be linked to the actions of its Italian parent company.
"D&G USA did not enter into any joint venture with UNXD or any other entity to sell, promote, or market any NFTs," it argued.
The company contended that the evidence in the complaint indicates that the NFT project originated from its Italian parent company and that there was insufficient evidence to implicate the U.S. and Italian companies.
Judge Buchwald stated that the lawsuit "clearly fails to withstand D&G USA's motion to dismiss," as it referred to both the U.S. and Italian companies as "Dolce & Gabbana" and attributed all wrongdoing to this shared name without distinguishing the actions of each entity.
The amended complaint detailed the "overlap in ownership, management, directors, and employees" between the two companies, such as sharing a CEO, operations head, and IT and marketing executives, she noted.
However, the lawsuit failed to "provide specific examples" of how these executives were involved in the NFT project.
"The court finds that the plaintiffs have not sufficiently alleged that D&G S.R.L. completely controls D&G USA, even if D&G S.R.L. allegedly shares some employees and office space with D&G USA," Buchwald stated.
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Original article: “Dolce & Gabbana NFT Lawsuit Takes a Turn, U.S. Subsidiary Cleared of Liability”
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