Dolce & Gabbana Avoids NFT Lawsuit
The US arm of Dolce & Gabbana has successfully avoided a class-action lawsuit concerning its parent company's purported abandonment of a non-fungible token (NFT) project. A New York federal judge, Naomi Reice Buchwald, dismissed the case, ruling that Dolce & Gabbana USA Inc. is not an "alter ego" of its Italian parent company, Dolce & Gabbana SRL.
Lawsuit Details
The lawsuit, filed in May 2024 and amended in September, alleged that Dolce & Gabbana and its US subsidiary failed to deliver on promises made regarding their 2022 "DGFamily" NFT project. Plaintiffs claimed that over $25 million was collected from NFT sales but benefits, including digital assets and physical goods, were not fully provided. Along with Dolce & Gabbana and its US arm, the Dubai-based NFT marketplace UNXD Inc. and Bluebear Italia SRL (creator of the "inBetweeners" NFT collection) were named as defendants, but were not served with the complaint.
The Alleged Failures
- Unfulfilled Promises: The lawsuit claimed Dolce & Gabbana failed to deliver promised benefits, such as digital outfits for Decentraland and physical clothing.
- Financial Concerns: Plaintiffs alleged that millions of dollars from NFT sales were retained without providing the promised deliverables.
Dolce & Gabbana USA's Defense
Dolce & Gabbana USA argued it was a separate entity and not involved in the NFT project's development or marketing. The company stated that it had not entered into any joint venture with UNXD or other entities related to NFT sales. They asserted that the lawsuit's evidence demonstrated the project originated from the Italian parent company and lacked sufficient evidence of involvement from the US branch.
Judge's Ruling
Judge Buchwald's decision emphasized the lawsuit's failure to adequately distinguish between Dolce & Gabbana USA and the Italian parent company. While acknowledging an overlap in some personnel, the suit lacked specific evidence demonstrating these individuals' roles in the NFT project's alleged failures. The judge concluded that the plaintiffs had not sufficiently demonstrated that Dolce & Gabbana SRL completely dominated its US subsidiary.
Implications
This case highlights the complexities of legal jurisdiction and corporate liability in the rapidly evolving NFT landscape. It underscores the importance of clear contractual agreements and distinct legal structures when engaging in international NFT projects. The dismissal of the US-based portion of the lawsuit leaves the future of the case uncertain, given the lack of service to the other named defendants.
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