The US arm of Dolce & Gabbana has escaped a proposed class-action lawsuit over its parent company’s alleged abandonment of a non-fungible token (NFT) project.
In an order on Friday, New York federal court judge Naomi Reice Buchwald sided with Dolce & Gabbana USA Inc., dismissing the lawsuit because it wasn’t an “alter ego” of its Italy-based parent, Dolce & Gabbana SRL.
A group of NFT buyers claimed in a lawsuit filed in May 2024 and updated in September that Dolce & Gabbana and its US arm “are effectively the same company” that failed to deliver on its “DGFamily” NFT project launched in 2022 and kept over $25 million from it.
The future of the suit is in doubt as Dolce & Gabbana USA was the sole US-based defendant. The Dubai-based NFT marketplace UNXD Inc. and the Italy-based Bluebear Italia SRL — the creator of an NFT collection called “inBetweeners” — were also named as defendants, which the court noted were not served with the complaint.
Lawsuit claimed Dolce & Gabbana abandoned NFT project
The complaint alleged that Dolce & Gabbana and UNXD together made and promoted DGFamily, which would give buyers “high value” benefits to be delivered over two years at a rate of once per quarter.
Some of the allegedly promised perks were digital outfits for the Decentraland metaverse, physical clothing and live events for NFT holders.
However, the lawsuit claimed Dolce & Gabbana “failed to provide the complete set of benefits they promised” and kept millions of dollars from selling the NFTs.
US arm argued it wasn’t involved in NFTs
Dolce & Gabbana USA filed to dismiss the suit in January, arguing that it was a separate entity that couldn’t be tied to the actions of its Italian parent company.
“D&G USA has not entered into any joint venture with UNXD, or any other entity, to sell, advertise, or promote any NFTs,” it argued.
The firm argued that the complaint’s evidence had established that the NFT project originated from its parent company in Italy and that it had not sufficiently alleged ties between the US and Italian firms.
Lawsuit failed to separate Dolce & Gabbana USA and Italian firm: Judge
Judge Buchwald said the lawsuit was “plainly insufficient to withstand D&G USA’s motion to dismiss” as it referred to both the US and Italian company “as ‘Dolce & Gabbana’ and attributes all misconduct to this shared moniker, without differentiating what each entity did.”
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The amended lawsuit detailed an “overlap in ownership, officers, directors, and personnel” between the two firms, such as sharing a CEO, operating chief and IT and marketing executives, she noted.
However, the suit failed to “provide specific examples” of how those executives were involved in the NFT project.
“The Court finds that plaintiff has not adequately alleged that D&G S.R.L. completely dominated D&G USA even if D&G S.R.L. allegedly shared some employees and office space with D&G USA,” Buchwald said.
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