When Government Inaction Becomes the Violation

Rosenthal v. State of New York: The Third Department Recognizes That Public Officials Cannot Evade Whistleblower Accountability Simply by Refusing to Act

I. The Government’s Decision to Do Nothing Is Still a Decision

Government misconduct is not confined to affirmative acts of corruption, discrimination, retaliation, or abuse of authority. Sometimes, the most consequential governmental decision is the deliberate refusal to address a known danger. Public officials receive warnings, review reports, attend meetings, and acquire information identifying risks to public health and safety. Yet the existence of that information does not guarantee that anyone with authority will act upon it. When an employee repeatedly challenges that institutional indifference, the government may respond not by addressing the underlying problem, but by removing the person who continues to raise it.

That distinction lies at the center of Rosenthal v. State of New York, 2026 N.Y. Slip Op. 06504 (3d Dep’t Nov. 5, 2026), a significant decision concerning the scope of New York’s public-employee whistleblower protections under Civil Service Law § 75-b. The Appellate Division, Third Department, held that governmental inaction, no less than affirmative governmental misconduct, may constitute the underlying violation supporting a whistleblower retaliation claim. The Court rejected the State’s effort to distinguish between active misconduct and a governmental decision to leave a potentially dangerous condition unaddressed.

The significance of that holding extends well beyond the circumstances of Susan Rosenthal’s termination as President and Chief Executive Officer of the Roosevelt Island Operating Corporation (RIOC). It addresses a recurring problem throughout public employment: employees who identify potential dangers, challenge institutional practices, or disclose suspected legal violations frequently confront governmental employers that characterize their objections as disagreements over policy, management, or administrative discretion. That characterization can obscure the fundamental statutory question of whether the employee disclosed information protected by law and subsequently suffered retaliation because of that disclosure.

Writing for a unanimous panel, Justice Christine M. Mackey rejected the State’s argument that inaction could not support the underlying whistleblower claim. The Court explained:

“It is axiomatic that government inaction may have as profound adverse effects to public safety and health as that of an active response. Indeed, whether to respond actively or passively to a safety concern is an affirmative choice taken.”

That reasoning is the decision’s most consequential contribution. Government cannot necessarily escape the reach of whistleblower protection by transforming an alleged failure to comply with legal responsibilities into a supposedly neutral exercise of administrative discretion. When credible safety concerns are disclosed, the distinction between acting and declining to act does not automatically determine whether the employee’s disclosure receives statutory protection.

The Court did not determine that the State actually violated the law, that the steam tunnels presented the alleged danger, or that Rosenthal was terminated for engaging in protected activity. Those questions remain unresolved. Instead, it held that her allegations were sufficient to withstand a motion to dismiss. That procedural distinction is essential, but it does not diminish the decision’s importance.

A public employee asserting retaliation does not have to establish the ultimate merits of the underlying claim merely to obtain access to discovery. Where a pleading sufficiently alleges protected disclosures, governmental misconduct, and retaliatory termination, the courts must apply the governing pleading standard rather than prematurely resolve disputed factual questions.

The distinction is particularly important because whistleblower retaliation often involves information that remains within the exclusive possession of the governmental employer. Communications concerning the reported danger, discussions among supervisory personnel, internal assessments, and records explaining the termination may all be unavailable to the employee without discovery. Requiring the employee to conclusively establish those matters before discovery would undermine the protection the Legislature created.

Rosenthal recognizes that limitation while establishing a broader principle: governmental accountability cannot depend exclusively upon whether officials affirmatively created a dangerous condition or allegedly allowed it to persist.

II. The Steam Tunnels, the Warnings, and the Termination

The underlying allegations involve a public-safety concern that Rosenthal contended had gone unaddressed for years. According to her claim, engineering studies conducted in 2012 and 2017 identified deteriorating conditions within abandoned steam tunnels associated with Roosevelt Island. Those studies allegedly raised the possibility of catastrophic consequences in the event of a significant weather event.

Between 2017 and June 2020, Rosenthal asserted that she repeatedly attempted to bring those concerns to the attention of State officials and develop measures to mitigate the potential danger. Her efforts allegedly included preparing a memorandum and raising the issue with the then-deputy secretary for economic development approximately every other week over a period of many months.

According to Rosenthal, those efforts produced no meaningful corrective action. Her claim alleged that the State continued to disregard the warnings notwithstanding the potential consequences for public safety.

In June 2020, Rosenthal was terminated from her position as RIOC’s President and CEO. Shortly afterward, a senior advisor to then-Governor Andrew M. Cuomo reportedly informed the New York Post that her termination followed a complaint and investigation finding that she had used racially and sexually offensive language.

The ensuing litigation became procedurally complicated, involving a CPLR article 78 proceeding, a separate plenary action, a Court of Claims action, and federal litigation asserting constitutional claims. The parties disputed not merely whether Rosenthal’s termination was retaliatory, but which governmental entity qualified as her employer, which causes of action could be pursued in particular courts, and whether earlier proceedings precluded subsequent claims.

Those issues are not interchangeable. An employer may dispute the factual basis for an employee’s retaliation allegations while simultaneously arguing that the wrong governmental entity has been sued or that the selected forum lacks jurisdiction. Each question requires independent legal analysis.

In the Court of Claims, Rosenthal alleged that her termination resulted from her persistent disclosures concerning the steam tunnels. She also alleged that the State’s failure to address the dangerous condition constituted criminal nuisance in the second degree under Penal Law § 240.45(1), based upon the claimed knowing or reckless maintenance of a dangerous condition.

The Court of Claims dismissed the retaliation claim after determining that RIOC, rather than the State, was Rosenthal’s employer and that the court lacked jurisdiction over RIOC. The lower court also dismissed her state constitutional due process claim and defamation claim on separate grounds.

The Third Department reversed the dismissal of the retaliation claim while affirming the dismissal of the constitutional and defamation claims.

That result matters because it separates the potentially viable employment-retaliation theory from claims that encountered independent remedial and procedural obstacles. The appellate court did not treat the entire controversy as a single undifferentiated dispute simply because the claims originated from the same termination. It examined the statutory and jurisdictional requirements applicable to each cause of action.

For public employees who report wrongdoing, that distinction can determine whether a claim survives long enough to permit meaningful examination of the employer’s conduct.

III. Civil Service Law § 75-b Protects Disclosures Concerning Governmental Failures to Act

Civil Service Law § 75-b establishes important protections for public employees who disclose certain governmental violations and improper governmental actions. Unlike Labor Law § 740, which addresses private-sector whistleblower protections, Civil Service Law § 75-b specifically governs public employment.

Under Civil Service Law § 75-b(2)(a), a public employer may not dismiss or otherwise take prohibited personnel action against an employee because the employee discloses information to a governmental body concerning a violation of law, rule, or regulation that creates and presents a substantial and specific danger to public health or safety, or information the employee reasonably believes to be true and reasonably believes constitutes an improper governmental action.

The statutory language requires careful attention to the nature of the disclosure, the governmental conduct at issue, and the relationship between the disclosure and the challenged personnel action.

The State attempted to defeat Rosenthal’s retaliation claim by arguing that the allegations concerning its failure to address the steam tunnels were insufficient to support liability. The argument depended, in substantial part, upon distinguishing governmental inaction from the affirmative misconduct contemplated by the whistleblower statute.

The Third Department rejected that distinction.

In doing so, the Court relied upon the broader protective purpose of New York’s whistleblower legislation and an analogous private-sector decision, Villarin v. Rabbi Haskel Lookstein School, 96 A.D.3d 1, 8 (1st Dep’t 2012). In Villarin, the First Department recognized that discouraging the reporting of suspected child abuse could support a whistleblower claim under Labor Law § 740 because the alleged failure to act could expose children to additional abuse or maltreatment.

The Third Department found the underlying reasoning applicable to public employment. It explained that governmental failures to address credible threats may have consequences every bit as serious as affirmative misconduct.

The Court illustrated its reasoning by considering a governmental employee who disclosed an agency’s failure to investigate a credible threat to the life or safety of a public figure. Denying whistleblower protection merely because the underlying misconduct involved a failure to investigate would produce an untenable distinction.

That example captures the flaw in the State’s argument. Governmental responsibilities frequently require officials to investigate, evaluate, prevent, or respond to known risks. An agency’s decision not to perform a legally required responsibility may itself constitute actionable misconduct. The fact that the resulting harm arises through omission rather than commission does not necessarily place the conduct beyond statutory scrutiny.

The Court therefore announced an express holding:

“Accordingly, we now hold that government action, whether passive inaction or an affirmative step taken, may support a Civil Service Law § 75-b claim.”

This holding must be understood precisely. It does not convert every unanswered complaint, unresolved workplace grievance, or disputed administrative decision into a whistleblower violation. Nor does it establish that every governmental failure to address a reported condition independently constitutes a violation of law.

The employee must still plead and ultimately establish the applicable statutory elements. A legally protected disclosure must be distinguished from an ordinary disagreement concerning governmental priorities. The alleged governmental conduct must satisfy the relevant statutory requirements, and the employee must establish the necessary causal relationship between protected activity and adverse personnel action.

But the government cannot obtain dismissal simply by asserting that its alleged misconduct consisted of declining to act.

That is an important limitation upon an argument frequently available to institutional defendants. Government agencies exercise substantial discretion in allocating resources, prioritizing investigations, and responding to operational concerns. That discretion, however, does not automatically insulate every omission from scrutiny when an employee alleges an underlying violation of law and retaliation for disclosing it.

The distinction between administrative discretion and unlawful governmental inaction depends upon the actual circumstances and governing legal duties. It cannot be resolved merely by describing the alleged misconduct as passive.

For police departments, correctional institutions, public hospitals, transportation authorities, schools, and regulatory agencies, the practical implications are substantial. Employees may disclose dangerous conditions, failures to enforce mandatory safety requirements, breakdowns in investigative procedures, or other alleged improper governmental actions. Where those disclosures satisfy Civil Service Law § 75-b, an agency’s refusal to address the underlying allegations does not defeat whistleblower protection as a matter of law.

Indeed, the failure to act may be the very conduct that makes the disclosure legally significant.

IV. The Motion to Dismiss Is Not a Trial, and the Employer’s Identity Is a Factual Question

The Third Department’s analysis is also important for its treatment of the pleading standard and the State’s attempt to avoid liability through the corporate structure of RIOC.

The Court of Claims had dismissed Rosenthal’s retaliation claim after determining that RIOC was her employer. Because the Court of Claims lacks jurisdiction over RIOC, that determination effectively terminated her whistleblower claim against the State.

On appeal, however, the State conceded that a factual question existed concerning whether it was Rosenthal’s de facto employer.

That concession undermined the basis for dismissal.

The Third Department agreed that the employer-identification issue could not properly be resolved against Rosenthal at the pleading stage. Citing Griffin v. Sirva, Inc., 29 N.Y.3d 174, 186 (2017), and Cain v. North Country Community College, 249 A.D.3d 1430, 1432–33 (3d Dep’t 2026), the Court recognized that the relationship between the State and the employing entity presented a factual question inappropriate for resolution on the existing motion.

This aspect of the decision deserves attention because governmental employment relationships are not always as straightforward as their formal organizational structures suggest.

Public authorities, public-benefit corporations, governmental subsidiaries, and other entities may operate with varying degrees of supervisory involvement, administrative oversight, and control by public officials. A governmental defendant may rely upon the formal distinction between those entities to argue that it did not employ the individual who suffered the adverse personnel action.

The formal identity of an employing entity is relevant, but it does not necessarily resolve every question concerning the actual employment relationship.

Where the facts adequately raise a question concerning de facto employment, the court must evaluate that issue under the governing legal standard rather than treat the formal structure as dispositive without an adequate factual record.

The decision does not establish that the State was Rosenthal’s employer. It establishes that the question remained open and could not be decided against her on the motion to dismiss.

The same procedural discipline governed the sufficiency of the retaliation allegations.

The Third Department relied upon A.J. v. State of New York, 231 A.D.3d 237, 238–39 (3d Dep’t 2024), for the established rule that a pleading receives liberal construction, its factual allegations are accepted as true, and the claimant receives every possible favorable inference.

The Court further invoked Draina v. Town of Ballston, 250 A.D.3d 1429, 1430 (3d Dep’t 2026), emphasizing that the judiciary’s function on a motion to dismiss is not to determine the ultimate merits, but to decide whether the allegations state a legally cognizable claim.

That rule is elementary. Its consistent application is nevertheless indispensable to civil-rights and employment litigation.

There is a fundamental difference between determining whether alleged facts establish a viable claim and deciding whether those allegations will ultimately be believed. The former is a pleading inquiry; the latter ordinarily requires an evidentiary record and, where material factual disputes persist, resolution by the appropriate factfinder.

Rosenthal alleged that engineering studies identified dangerous conditions, that she repeatedly disclosed those concerns, that the State failed to respond, and that she was terminated because of her persistent efforts to obtain corrective action.

Whether the studies actually established the asserted danger, whether the State’s conduct violated the applicable law, and whether the termination resulted from the disclosures are matters requiring evidentiary examination. Those questions were not finally resolved by accepting the allegations as sufficient to proceed.

By reversing dismissal, the Third Department preserved the distinction between alleging a claim and proving it.

The practical consequence is that the retaliation claim may proceed beyond the pleading stage. It is not a determination of liability, but neither is it a procedural victory without consequence. It prevents the State from avoiding further examination of the allegations on the two grounds rejected by the appellate court.

V. The Constitutional and Defamation Claims Reveal the Limits of Available Remedies

Although Rosenthal prevailed on her whistleblower retaliation claim, the Third Department affirmed dismissal of her state constitutional due process and common-law defamation claims. These rulings illustrate how a potentially substantial underlying grievance can encounter different legal barriers depending upon the remedy pursued and the procedural vehicle selected.

Rosenthal’s state constitutional claim rested upon a stigma-plus theory. She alleged that the State’s public dissemination of accusations concerning her conduct, combined with the failure to provide a name-clearing hearing, violated her due process rights under article I, § 6 of the New York Constitution.

A stigma-plus claim is not simply a defamation claim expressed in constitutional language. It concerns the circumstances under which governmental dissemination of stigmatizing allegations, together with an additional legally cognizable deprivation, may implicate procedural due process.

Nevertheless, a separate question arises when an individual seeks monetary damages directly under the New York Constitution: whether a constitutional tort remedy is available despite other avenues for relief.

The Third Department applied the restrictive framework governing state constitutional damages claims, citing Alsaifullah v. State of New York, 166 A.D.3d 1426, 1426–27 (3d Dep’t 2018), and Gomez v. State of New York, 249 A.D.3d 1286, 1287 (3d Dep’t 2026).

Under that framework, a damages remedy directly under the State Constitution remains limited and generally unavailable when an adequate alternative remedy exists.

The Court identified several potential alternatives, including a CPLR article 78 proceeding seeking a name-clearing hearing, a common-law tort action, and federal civil-rights litigation under 42 U.S.C. § 1983. It also emphasized that an alternative remedy may be considered available even when the claimant did not pursue it.

The Third Department further rejected Rosenthal’s contention that her constitutional claim was sufficiently distinct from her defamation claim, emphasizing that both arose from the same underlying circumstances and sought identical damages.

The result was dismissal of the state constitutional damages claim, not a merits determination that the alleged public statements were true or that Rosenthal had received constitutionally adequate process.

The distinction matters. The court resolved the availability of a particular remedy rather than determining the truth of the government’s accusations.

The defamation claim encountered a separate obstacle: the jurisdictional filing and notice requirements of the Court of Claims Act.

Under Court of Claims Act §§ 10(3-b) and 11(b), an intentional-tort claim against the State must satisfy specific timing and content requirements. A timely notice of intention may extend the time for filing and serving the claim, but the notice must adequately identify the nature and circumstances of the alleged wrongdoing.

Rosenthal attempted to rely upon her earlier CPLR article 78 petition as the functional equivalent of a notice of intention to file a defamation claim.

The Third Department rejected that argument.

Although the earlier petition addressed circumstances arising from the termination and the State’s public statements, it did not expressly assert defamation, identify resulting reputational damages, seek the monetary relief pursued in the Court of Claims, or otherwise adequately notify the State that a defamation action would follow.

The Court therefore concluded that the earlier petition did not satisfy Court of Claims Act § 11(b), leaving the defamation claim untimely under § 10(3-b).

That determination illustrates a recurring distinction between factual overlap and statutory notice. A governmental defendant’s awareness of a dispute does not necessarily satisfy the statutory requirements for presenting a particular claim. The nature of the asserted injury, the relief sought, and the content of the required notice remain independently significant.

The combined effect of these rulings was to narrow the Court of Claims litigation to the surviving whistleblower retaliation theory.

The opinion thus presents two different principles operating simultaneously. Its whistleblower analysis rejects an unduly restrictive interpretation that would exclude governmental inaction from statutory protection. Its constitutional and defamation analyses enforce established limitations upon the availability of remedies against the State.

Those holdings are not necessarily inconsistent. They concern different legal questions. But they demonstrate why the substantive viability of an allegation does not eliminate the need to identify the proper defendant, forum, statutory vehicle, and remedy.

VI. The Parallel Federal Litigation Exposes the Importance of Preserving Distinct Claims

An additional feature of Rosenthal makes the decision especially noteworthy: the Third Department expressly acknowledged the separate federal litigation and the Second Circuit’s reversal of a prior dismissal based on claim preclusion.

In Rosenthal v. Roosevelt Island Operating Corp., 185 F.4th 48 (2d Cir. 2026), the Second Circuit vacated the federal district court’s dismissal of Rosenthal’s federal constitutional claim and remanded the matter for further proceedings.

The district court had dismissed the federal action under principles of res judicata, reasoning that Rosenthal could have asserted the due process theory during her earlier state-court proceedings.

The Second Circuit rejected that disposition because the relevant federal civil-rights claim had previously been dismissed without prejudice rather than adjudicated on the merits.

The Third Department acknowledged that result in footnote three of its November 5, 2026 decision, explaining that the Second Circuit had determined Rosenthal’s § 1983 claim had not received a merits adjudication.

The significance is not that the federal and state appellate courts reached competing conclusions concerning the same claim. They addressed separate causes of action, involving different remedial questions and procedural histories.

The Third Department concluded that Rosenthal could not pursue a direct state constitutional damages remedy in the Court of Claims where adequate alternative remedies existed. The Second Circuit, meanwhile, determined that the earlier state-court disposition did not preclude the federal constitutional litigation on the ground adopted by the district court.

There is no inherent contradiction between those conclusions.

Indeed, the interaction between the decisions demonstrates why the exact language of prior dismissals matters.

A dismissal without prejudice is not automatically a license to relitigate every issue in every forum. Nor does it invariably eliminate all possible preclusion defenses. But when a court expressly dismisses a claim without prejudice and has not adjudicated its merits, subsequent courts must accurately account for that disposition before invoking claim preclusion.

The Second Circuit’s ruling preserved the federal action from the particular preclusion determination that had ended it. It did not establish the merits of Rosenthal’s due process theory.

Similarly, the Third Department’s reinstatement of the whistleblower claim did not decide the federal constitutional allegations.

These distinctions are especially important when public-employment disputes produce overlapping Article 78, statutory retaliation, common-law, and constitutional claims. The remedies available in one forum may differ materially from those available in another, and the scope of a prior judgment must be evaluated with reference to what was actually decided.

The judicial obligation is not to collapse those proceedings into a generalized conclusion that the employee has already litigated enough. It is to determine whether the particular claim is legally barred under the governing rules.

Rosenthal illustrates the consequences of that distinction. The claimant’s litigation has traveled through multiple courts, and some of her claims have been dismissed. Yet neither the number of proceedings nor the existence of prior adverse rulings eliminated the legal obligation to examine the remaining claims under their applicable standards.

VII. Institutional Accountability Must Extend to the Decision Not to Protect the Public

The most important consequence of the Third Department’s decision is its recognition that governmental inaction cannot be treated as categorically harmless or legally irrelevant.

Public institutions are entrusted with responsibilities that extend beyond refraining from affirmative misconduct. Their obligations may include investigating reported dangers, maintaining safe facilities, enforcing legal requirements, correcting known deficiencies, and responding to conditions threatening public health or safety.

When an employee raises concerns about a potentially dangerous condition, the government’s response may become central to the eventual retaliation claim.

The legal significance of that response does not depend exclusively upon whether officials ordered an unlawful act. A refusal to take legally required action may produce consequences comparable to those resulting from affirmative misconduct.

That does not mean every governmental omission is unlawful. Public administration necessarily involves competing responsibilities, limited resources, and decisions about how best to respond to identified risks. Courts must distinguish between legitimate discretionary judgments and conduct that satisfies the statutory definition of improper governmental action or violates an applicable legal duty.

But that distinction requires analysis, not an automatic exemption for governmental passivity.

The troubling institutional dynamic arises when an employee identifies a serious concern, supervisors decline to address it, and the employee subsequently becomes the subject of adverse employment action. In that circumstance, the retaliation inquiry cannot properly be diverted into a debate about whether the government physically created the underlying danger.

The questions are more direct: What did the employee disclose? To whom was the information communicated? What legal duties governed the alleged danger? What did the responsible officials know? How did they respond? Who participated in the adverse personnel decision? And what evidence establishes the actual reason for that decision?

Those questions bear upon protected activity, the alleged governmental violation, causation, and liability. They also identify the evidence necessary to distinguish legitimate personnel action from unlawful retaliation.

In Rosenthal’s case, the State may ultimately establish that the reported condition did not constitute the alleged violation, that her disclosures did not satisfy the statutory requirements, or that her termination resulted from legitimate reasons unrelated to protected activity. The allegations concerning offensive language and the investigation preceding her termination plainly remain relevant to that dispute.

But the existence of an asserted alternative explanation does not itself establish that her whistleblower allegations fail as a matter of law at the pleading stage.

The Third Department correctly separated those questions.

Its decision permits the statutory retaliation claim to proceed without presuming that Rosenthal’s factual allegations are ultimately true. At the same time, it prevents the State from obtaining dismissal merely by characterizing its alleged failure to address the steam tunnels as inaction rather than misconduct.

That is the proper judicial function.

Government employees who disclose potential dangers cannot be guaranteed protection against every adverse personnel decision. They can, however, insist that courts apply the protections the Legislature enacted without inventing categorical exceptions unsupported by the statutory framework.

The State’s authority to investigate employee misconduct and impose lawful discipline remains intact. So does the employee’s statutory protection against retaliation for qualifying disclosures. Where both issues arise from the same employment relationship, neither can be assumed to defeat the other without the necessary factual and legal examination.

Conclusion: Silence Cannot Become a Safe Harbor for Retaliation

Rosenthal v. State of New York establishes an important principle of governmental accountability: the decision to disregard an alleged threat to public health or safety may constitute the governmental conduct underlying a protected whistleblower disclosure.

The Third Department did not determine that Susan Rosenthal was unlawfully terminated, that the State violated Penal Law § 240.45(1), or that the abandoned steam tunnels presented the alleged danger. It determined that her allegations stated a viable claim under Civil Service Law § 75-b and that the unresolved question concerning the State’s status as her de facto employer could not properly be decided against her on a motion to dismiss.

That holding preserves the distinction between legal sufficiency and ultimate liability while rejecting an artificial separation between affirmative governmental misconduct and governmental omissions.

The decision also illustrates the importance of maintaining the integrity of distinct statutory, constitutional, and common-law claims. Rosenthal’s state constitutional and defamation claims failed because of separate remedial and procedural limitations, while her whistleblower claim survived. Her parallel federal litigation likewise remains governed by its own procedural history and the Second Circuit’s rejection of the particular claim-preclusion ruling previously entered against her.

The broader institutional lesson is unmistakable. Government officials cannot necessarily insulate themselves from whistleblower scrutiny by refusing to confront a reported danger and then characterizing that refusal as mere inactivity.

Public employees are often the first individuals positioned to identify dangerous conditions, institutional failures, and suspected legal violations. When the law protects their disclosures, governmental employers cannot lawfully retaliate against them for making those disclosures simply because the allegations concern what officials failed to do.

The government may ultimately defend its decisions. It may contest the claimed danger, challenge the alleged violation, and establish legitimate reasons for an adverse employment action. But it must do so within the governing legal framework, not through a categorical theory that official inaction is beyond the reach of whistleblower protection.

Government accountability does not begin and end with the unlawful acts officials commit. It also encompasses legally consequential duties they fail to perform—and the retaliation allegedly imposed upon employees who refuse to remain silent.

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