A federal court in New York has dismissed a class-action lawsuit against Dolce & Gabbana’s U.S. unit related to the failed DGFamily NFT project. Judge Naomi Reice Buchwald ruled that Dolce & Gabbana USA Inc. cannot be held liable for the actions of its Italian parent company, as it does not function as its “alter ego.”
Lawsuit Claimed the Companies Operated as One Entity
A group of investors filed the lawsuit in May 2024, later amending it in September. The complaint alleged that Dolce & Gabbana USA and the Italian company Dolce & Gabbana S.R.L. were essentially the same entity, which had launched the DGFamily NFT project in 2022 but failed to deliver on its promises, misappropriating over $25 million raised through token sales.
The project was introduced as a series of digital assets offering special privileges to holders, including digital clothing in the Decentraland metaverse, physical fashion items, and access to offline events. Promises included quarterly bonus drops over a two-year period. However, according to the plaintiffs, most of the promised benefits were never delivered.
D&G USA Claimed No Involvement in the Project
Attorneys for Dolce & Gabbana USA filed a motion to dismiss the case in January, arguing that the U.S. entity had no role in launching, promoting, or selling the NFTs. They stated that the project was organized by the Italian headquarters in partnership with Dubai-based platform UNXD Inc. and Italian firm Bluebear Italia S.R.L., known for creating the inBetweeners collection.
The court sided with the defense. In her ruling, Judge Buchwald noted that the complaint referred to both companies simply as “Dolce & Gabbana” and failed to clearly distinguish between the actions of the Italian and U.S. entities. Even though the companies allegedly shared staff, including the CEO, COO, IT, and marketing teams, the plaintiffs did not provide concrete evidence showing these individuals were involved in the NFT initiative.
Fate of the Case in Question
Dolce & Gabbana’s U.S. office was the only named defendant officially registered in the U.S. The other companies mentioned in the suit, including UNXD and Bluebear Italia, had not been formally served by the time of the ruling. This casts doubt on the continuation of the case, as they were not formally held accountable.
Judge Buchwald emphasized that simply sharing office space or staff does not constitute a sufficient basis to consider D&G USA entirely controlled by its Italian parent. According to her, the plaintiffs failed to demonstrate “complete domination” of one structure over the other.
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