Susan Rosenthal’s Lawsuit Failed. Now Here’s Why…

Susan Rosenthal’s Lawsuit Failed. Now Here’s Why…

Susan Rosenthal’s lawsuit was dismissed this month as was an earlier effort last year. A judge not only rejected its basic claims but also implied that the strategy of both lawsuits was flawed. We asked a legal expert who is familiar with RIOC to give us a review. Here’s what we learned.

by David Stone

The Roosevelt Island Daily News

Weaknesses in Rosenthal’s Lawsuit

RIOC’s longtime headquarters were here. It apparently housed as much double-dealing, back-stabbing and plotting against management as it did actual work. It’s where President/CEO Susan Rosenthal made her last stand.

Looking at the dust and ashes left after her lawsuit failed, our expert lamented harping on a regrettable issue “…but I believe that a major part of the improper approach was the good old lack of competence.” He believes the case was mishandled from Day One.

“Susan and her lawyers should have known better. They should have commenced a normal action (not an Article 78) in State court (Supreme or Court of Claims, depending on the named defendants).

An Article 78 lawsuit is a proceeding to review an administrative decision or action. It’s used when you want to overturn a decision made by a government body or agency, usually because it’s illegal, arbitrary, capricious, or an abuse of discretion.

The Rosenthal suit charged that RIOC had improperly terminated her and committed racial discrimination against her. The charges were rejected by the judge. Rosenthal is white.


The Article 78 Problem

A major flaw in going first through Article 78 is its limits on discovery. That mistake in Rosenthal’s lawsuit stood out for our expert when he saw an attempt to use a discovery process to get copies of alleged taped conversations used against her. Discovery is very limited in an Article 78 proceeding, and in this case, it went nowhere.

Although, through her attorney, Rosenthal insists she’ll appeal, her “discrimination case is weak,” according to our expert. This is not to say that actions by Governor Cuomo and RIOC staff were ethical or admirable in any way – they weren’t – but they seemed aware of what they could get away with.

As for the Article 78, the state argued that, as an at will employee, Rosenthal could be fired at any time without any reason. Her attorney fired back that, even so, she could not be fired for an illegal reason. But then, her claims of racial discrimination failed.

“The bottom line is that Rosenthal became a victim of the identity politics structure that she created at RIOC,” our expert says. We’ll explain later, but first.

What Cuomo and His RIOC Hired Hands Got Away With

Perhaps the largest instance of misconduct is not anything done by Susan Rosenthal. It was instead perpetrated by a RIOC employee.

Apart from any of the other claims by either side, it’s highly unlikely Rosenthal would have been fired if not for someone taping telephone conversations with her. At least one recording was played back for a state investigator, and it did the trick.

Is taping your boss legal or ethical in New York? No and no. And Rosenthal’s firing followed.

In the golden age of technology, it’s become far too easy for people to violate others’ privacy. The Rosenthal/RIOC tapes were one example, but hardly the only one at RIOC.

Multiple individuals have fingered current President/CEO Shelton J. Haynes, a confidant and friend of Rosenthal’s – or so she believed – as the person taping her.

What Did the Tape Reveal?

“From what I know, Susan used the N-word in a phone conversation with Shelton,” an employee involved in Rosenthal’s dismissal told The Daily.

She certainly wasn’t calling him that. I believe she said something to the effect of, ‘I use vulgar language, but if you were to use that type of language people would just assume that you are just another N———-.’

“Shelton was recording his conversations with Susan and played that excerpt to some of the Black employees.” So, if the report is true, while she counseled him on his professional development, Haynes used the recordings to undermine Rosenthal in the eyes of others on the staff.

While that’s a clear ethical violation, it also violates New York State’s Government Office of Employee Relations (GOER) rules. A manager aware of misconduct must immediately report it to GOER. No one did until the investigation began.

No one, aside from Rosenthal, was ever punished as far as we know.

How Identity Politics Caused Rosenthal’s Lawsuit’s Failure

“Frankly, the only evidence of discrimination that I saw her attorney present is that she was replaced by an African American,” a legal advisor commented. “It should be noted that 2/3 VPs at RIOC at that time were Black. So it was only logical that her successor would be Black.”

She was, in a sense, hoisted on her own petard.

A former RIOC employee observed…

“Examples of Susan’s (admitted) race-based hirings and promotions include but are not limited to:

  • Altheria Jackson, a thoroughly unqualified friend of Shelton’s, who was hired and routinely promoted by Susan;
  • Gretchen Robinson, who until she became the General Counsel of RIOC had not served a day as an in-house counsel to any corporation. The Daily has reported on Robinson’s shortcomings multiple times in the past and has registered the concerns with the Inspector General.
  • Shelton himself, while technically hired by Charlene Indelicato, was promoted by Susan. These hirings weren’t just innocent mistakes. They were miscalculations. 

“On the flip side,” a former employee opined, “instead of hiring and promoting people like Shelton, Altheria and Gretchen, Susan could have hired or promoted other individuals who were more qualified but were not Black.

“The bottom line is that Susan became a victim of the identity politics structure that she created at RIOC. She did not expect that one day they would bite the hand that fed them.”

More Issues

Rosenthal’s lawsuit covers other issues as well. An internal coup toppled her but not in the way they intended. Haynes or whoever else taped her spilled the beans only when reacting. The initial effort to undermine Rosenthal stepped out in a detailed letter distributed to a dozen or more officials. It was signed by Karlene Jean, an administrative assistant.

Only after the accusations in that letter were deemed insufficient for punishing Rosenthal did the harsher stuff rise to the surface. Numerous accusations of inappropriate comments were later confirmed by staff, but the tape was the crusher. That did not appear to be its original intent.

A lot of people had it in for Rosenthal, it seems, but none so much so that they wanted her fired. You needed Cuomo and his Albany henchmen for that.


Susan Rosenthal, the former RIOC President/CEO, sued the state agency claiming improper termination and racial discrimination. Neither charge appears to be effective. Rosenthal was replaced by an African American, and many feel that her lawsuit was doomed from the start due to her own actions.

Rosenthal was a victim of the identity politics structure that she created at RIOC. But it was dirty pool from start to finish, and only Rosenthal paid a price for it.

That makes it unfair, if legal. And, in the end, it shields severe misconduct and probably worse involving current, highly paid executives.

But no one comes out of this swamp clean and dry, a fact that’s all too predictable with a state agency poisoned with patronage and political manipulation out of Albany.

The ultimate victims finally are the residents of this promising but badly mismanaged island community. Roosevelt Islanders pay the bills for all of RIOC’s shenanigans, and there is no end in sight.

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