In a significant ruling, the Appellate Division of the Supreme Court of the State of New York addressed the case of Susan Rosenthal v. State of New York, docket number CV-25-1354. The court's decision, issued on November 5, 2026, impacts public employees and whistleblower protections in New York. The ruling primarily focused on Rosenthal's claims regarding her termination from the Roosevelt Island Operating Corporation (RIOC) and her allegations of retaliation for raising safety concerns.

Susan Rosenthal, the appellant, served as the President and CEO of RIOC. She claimed that her termination in June 2020 was a direct result of her whistleblower actions, specifically her repeated warnings about safety issues related to steam tunnels on Roosevelt Island. Following her termination, Rosenthal faced public accusations of using “racially and sexually offensive” language, which she argued were defamatory and damaging to her reputation.

The case began when Rosenthal filed various claims against RIOC and the State of New York after her termination. She initially pursued her claims through a CPLR article 78 proceeding and a plenary action. Ultimately, she filed a new action in February 2023, alleging retaliatory termination under New York's whistleblower statute and common-law defamation. The Court of Claims dismissed her claims, leading to her appeal.

The Appellate Division's ruling addressed several key points in Rosenthal's case. The court found that the Court of Claims had the authority to hear her whistleblower claim, as there was a factual question regarding whether the State was her de facto employer. The court noted, “the claimant sufficiently alleged a cause of action for a whistleblower retaliation claim pursuant to Civil Service Law § 75-b.” This section protects public employees from retaliation for reporting safety violations or improper governmental actions.

Judge Mackey, along with Justices Reynolds Fitzgerald, McShan, and Corcoran, concurred in the decision. The court acknowledged that Rosenthal had raised legitimate concerns about public safety regarding the steam tunnels, which had been documented in engineering studies. Her persistent efforts to alert the State about these issues were deemed sufficient to support her whistleblower claim.

However, the court upheld the dismissal of Rosenthal's defamation claim, stating that it was untimely. The court emphasized the importance of following procedural rules, noting that her earlier CPLR article 78 petition did not adequately inform the State of her intention to file a defamation claim. The court stated, “Claimant's CPLR article 78 petition failed to adequately apprise defendant of the possibility that an action for defamation would be brought.”

The court's decision has significant implications for public employees in New York. By allowing Rosenthal's whistleblower claim to proceed, the ruling reinforces the protections available to employees who report safety concerns. It highlights the importance of addressing governmental inaction regarding public safety issues and affirms that retaliation against whistleblowers can lead to legal consequences for employers.

Going forward, this ruling may encourage other public employees to come forward with their concerns about safety and misconduct without fear of retaliation. It also sets a precedent for how whistleblower claims are evaluated in New York, particularly in cases where the employer's inaction poses a risk to public health and safety.

As for the next steps, Rosenthal's whistleblower claim will proceed in the lower court. The court's ruling allows her to seek legal remedies for her termination and the alleged retaliation she faced. Details regarding whether Rosenthal plans to appeal the dismissal of her defamation claim were not available in the court filing. Additionally, it is unclear if there are any related cases pending that may further influence this matter.