that Dominick U.S. is the sole shareholder of Dominick Canada.
There has been disagreement and, to some extent, confusion
in this circuit regarding the necessary allegations and the
burden of proof for controlling person liability.*fn14 Some
district courts have required the plaintiff to allege and
prove culpable participation, Ruiz v. Charles Schwab & Co.,
736 F. Supp. 461, 464 (S.D.N.Y. 1990) (Owen, J.); Index Fund, Inc.
v. Hagopian, 609 F. Supp. 499, 506 (S.D.N.Y. 1985) (Tenney, J.);
O'Connor & Assoc. v. Dean Witter Reynolds, Inc., 529 F. Supp. 1179,
1194-95 (S.D.N.Y. 1981) (Lasker, J.),*fn15 while other
district courts have only required that the plaintiff allege
and prove control, leaving it to the defendant to plead and
prove good faith and lack of participation. In re Citisource,
Inc. Securities Litigation, 694 F. Supp. 1069, 1076-77
(S.D.N.Y. 1988) (Goettel, J.); Terra Resources I i v. Burgin,
664 F. Supp. 82, 88 (S.D.N.Y. 1987) (Sweet, J.); Drobbin v.
Nicolet Instrument Corp., 631 F. Supp. 860, 884-885 (S.D.N Y
1986) (Haight, J.); Savino v. E.F. Hutton & Co., Inc.,
507 F. Supp. 1225, 1242 (S.D.N.Y. 1981) (Ward, J.).*fn16
Although the position of the Second Circuit on this issue is
not entirely clear, it appears to this court that the Second
Circuit at one time required the plaintiff to allege and prove
culpable participation, Gordon v. Burr, 506 F.2d 1080, 1086 (2d
Cir. 1974), but now only requires that the plaintiff allege and
prove control, leaving it to the defendant to plead and prove
good faith and lack of participation.*fn17 Marbury Management,
Inc. v. Kohn, 629 F.2d 705, 716 (2d Cir.), cert. denied sub
nom. Wood Walker & Co. v. Marbury Management, Inc.,
449 U.S. 1011, 101 S.Ct. 566, 66 L.Ed.2d 469 (1980). This interpretation
comports with a plain reading of the statutes as well as
established principles of pleading which do not require that a
plaintiff anticipate and negate a defendant's good faith
defense. See Terra Resources I, supra, 664 F. Supp. at 88.
In conclusion, disputed issues of fact which are relevant
and material to the case preclude summary judgement on any of
the claims. Dominick U.S. is appropriately named as a party to
this action. Accordingly,
defendants' motion is denied. This case will be added to the
end of the civil ready calendar and the parties are directed
to file a pre-trial order on or before May 11, 1990.
IT IS SO ORDERED.