Two earlier losses didn't end it - now she can argue she was pushed out for whistleblowing
A federal appeals court has revived a fired public corporation CEO's due process claim, ruling a lower court wrongly threw it out.
On August 10, 2026, the US Court of Appeals for the Second Circuit ruled the former president and CEO of the Roosevelt Island Operating Corporation (RIOC) can pursue a claim a federal district judge had dismissed.
RIOC is a public benefit corporation that governs New York's Roosevelt Island. She led it from 2015 to 2020. The New York Governor's Office fired her on June 19, 2020.
That same day, according to the decision, a senior gubernatorial adviser told a New York Post reporter she had been terminated after a complaint and investigation into offensive comments. The paper ran a story saying she was fired over "racially and sexually offensive" remarks.
The former CEO denies that account. She says the real reason was political payback for her warnings about weather-related threats to Roosevelt Island's steam tunnels. Her complaint claims she raised the danger in a memo and that state officials then fed false allegations to the press to discredit her.
The internal inquiry is where HR readers should slow down. The decision notes the investigator's later sworn affidavit said the original June 12 complaint had "not been substantiated as violations" of the state's EEO policies, though it pointed to other evidence. She says officials later conceded the complaint was baseless.
Her federal suit rests on a "stigma-plus" theory under Section 1983, the federal civil rights law: that being fired and publicly stigmatized, without a chance to clear her name, denied her due process. She is seeking more than $1 million.
After losing her state court challenges to the firing, she refiled the Section 1983 claim in federal court. A district judge dismissed it on res judicata grounds - the rule against relitigating settled matters. The Second Circuit vacated that dismissal and sent the case back, finding the state court had dismissed that specific claim without prejudice, with leave to refile elsewhere.
For HR leaders, the lesson runs to the mechanics around a firing, not just the call to fire. How an investigation is documented, whether the stated reasons hold up, and how they are shared publicly can all come back later. Disclosing investigation findings publicly can trigger a name-clearing fight.
The court did not decide whether she will win - only that she may keep going. No court has ruled on the merits, and the matter now returns to the district court.
