New York—A federal court ruling has cleared Dolce & Gabbana USA Inc. of claims tied to a class-action lawsuit involving the luxury brand’s non-fungible token (NFT) project, which has been at the center of controversy over alleged unmet promises to buyers. On Friday, U.S. District Judge Naomi Reice Buchwald determined that the U.S. subsidiary is not an “alter ego” of its Italian parent company, Dolce & Gabbana SRL, and therefore cannot be held liable under the allegations set forth by NFT purchasers.
The legal action was initiated in May 2024 and later updated in September, with plaintiffs asserting that both Dolce & Gabbana Italy and its U.S. branch should be treated as a single entity. The buyers contend that there was a failure to deliver on the “DGFamily” NFT project, which was launched in 2022, and they claim the companies retained over $25 million from the initiative. With the dismissal of Dolce & Gabbana USA as a defendant, the future viability of the lawsuit remains uncertain, particularly since the other defendants—UNXD Inc. in Dubai and the Italian company Bluebear Italia SRL—were not formally served the complaint.
According to the lawsuit, Dolce & Gabbana and UNXD had collaborated to launch the DGFamily project, pledging buyers access to exclusive benefits over two years. These perks, which were highlighted at the project’s inception, included virtual outfits for the Decentraland metaverse, physical garments, and entry to live events for NFT holders. The complaint alleges that the luxury brand fell short in fulfilling these commitments and continued to profit from the sales of the NFTs without delivering the promised value.
Dolce & Gabbana USA’s defense emphasized its independence from the parent company, asserting that it had not participated in any partnership with UNXD or other entities concerning NFT sales or promotions. They stated that the NFT initiative was spearheaded by the parent company, and the accusations lacked sufficient evidence to establish a connection between the two companies in this context.
Judge Buchwald ruled in favor of Dolce & Gabbana USA, commenting that the plaintiffs did not adequately differentiate the roles of the two companies in the complaint. The judge noted that the lawsuit generically referred to both entities as “Dolce & Gabbana” without clarifying the specific actions each firm took. While the amended complaint did detail shared ownership and executive personnel, including a shared CEO and marketing executives, it failed to provide concrete examples of how these individuals were involved in the NFT project.
The judge pointed out that the plaintiffs had not proven that Dolce & Gabbana SRL had complete control over Dolce & Gabbana USA, even if some shared resources existed. This ruling illustrates a critical principle in corporate litigation, particularly when dealing with complex international networks and digital asset projects. The decision emphasizes the challenges presented when attempting to hold multinational corporations accountable for the business practices of their subsidiaries, especially in the fast-moving arena of digital goods and NFTs.
This development brings into focus the intricate nature of legal accountability in the rapidly evolving digital marketplace. The complexities surrounding corporate structures and the digital landscape pose significant hurdles for consumers seeking recourse in cases where promised benefits are not delivered.
This article was automatically written by Open AI, and the people, facts, circumstances, and story may be inaccurate. Any article can be requested for removal, retraction, or correction by writing to contact@publiclawlibrary.org.