This litigious attitude is exactly the sort of thing that undermines the general public's opinion of Jews, in my opinion. Let the rabbi direct his energies on his real enemies: the ones that want to eradicate Israel and believe their god calls them to murder Jews.
---
The litigious attitude is necessary when the Port Authority dithers about and refuses to make a decision regarding the issue.
The lawsuit threat was, most likely, made at the last possible minute before simple logistical problems would prevent the Menorah being constructed in the first place.
Only if you believe it's "necessary" to litigate against Christmas trees. These were not a bunch of nativity scenes. In my opinion, this rabbi has done Jews a major disservice by not tolerating these Christmas trees this year. He could have, and should have, made a simple request in a timely manner (ie, well before the trees went up), or requested the Menorah for next year.
This is obnoxious, and ill-timed, as our own "ISG" views Israel as the biggest threat to peace in the Middle East. Pick your battles better, Rabbi. How about threatening to sue CAIR?