US Dolce & Gabbana Unit Dismissed From NFT Project Lawsuit
A proposed class-action lawsuit alleging Dolce & Gabbana’s (D&G) abandonment of its “DGFamily” NFT project and misappropriation of funds was dismissed Friday for the US subsidiary, Dolce & Gabbana USA Inc.
Federal Judge Naomi Reice Buchwald issued an order finding Dolce & Gabbana USA is not the “alter ego” of its parent company, Dolce & Gabbana SRL, a prerequisite for piercing the corporate veil in corporate law.
NFT buyers filed the May 2024 lawsuit, updated in September, claiming D&G USA acted as the “alter ego” of the Italian firm regarding the failed project. They contended the company presented an NFT promotion that would deliver “high value” benefits over two years, with proceeds totaling over $25 million allegedly retained.
D&G USA submitted a motion to dismiss in January, successfully arguing it is a separate legal entity and lacked involvement in the NFT venture. This argument prompted the court dismissal.
Lawsuit Claims Parent Company Abandoned NFT Project
The complaint alleged that D&G parent company and NFT marketplace UNXD Inc. created the DGFamily project. Buyers were promised benefits like Decentraland digital wearables and physical products, supposedly delivered quarterly for two years. The lawsuit stated the company failed to provide all promised perks and withheld sale proceeds.
Third Defendant Also Removed from Case
Judge Buchwald’s ruling also determined that Bluebear Italia SRL, creator of the “inBetweeners” NFT collection, was wrongly named as a defendant and was never officially served with the lawsuit.
Judge Finds Insufficient Allegations Connecting US & Italian Entities
Buchwald dismissed D&G USA from the case. The court found the plaintiff’s arguments blaming both firms simultaneously failed to demonstrate control or direction by the Italian entity over the US subsidiary. Specifically, the lawsuit “did not properly allege that D&G SRL completely dominated D&G USA.”
“Plaintiff has not adequately alleged that D&G SRL completely dominated D&G USA even if D&G SRL allegedly shared some employees and office space with D&G USA,” the judge wrote.
The case record included listing overlapping executive roles between the entities, including shared CEO, operating chief, and some marketing and IT staff. However, Judge Buchwald cited the absence of specific examples detailing the US parent’s hand in the project.
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The Court finds that plaintiff has not adequately alleged that D&G SRL completely dominated D&G USA even if D&G SRL allegedly shared some employees and office space with D&G USA.
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The future of the lawsuit is now uncertain, as D&G USA remains the sole defendant still properly sued in the case.
