Pastore LLC represented the purchasing entities on three parcels of land on North Street in Greenwich, which are contiguous with a pre-existing parcel. This allowed the purchasing entities to combine all four parcels. The transaction involved a sale by a real estate fund based in Connecticut and the equitable redemption of a strict foreclosure. Pastore LLC’s real estate practice and corporate transactional practice led the transaction. George Toper, Tyler W. Rutherford, Joseph M. Pastore III and Paul Fenaroli assisted with the matter from Pastore LLC. Day Pitney LLP represented the sellers and Diserio Martin O’Connor & Castiglioni LLP advised the sellers on the foreclosure issues.
Author: Kelly McElroy
Understanding the FTC’s New “Click-to-Cancel” Rule
The Federal Trade Commission’s newly finalized Click-to-Cancel rule, part of its amendment to the Negative Option Rule, significantly raises the bar for businesses offering subscriptions, memberships, and other recurring billing arrangements. The goal: eliminate the common barriers consumers face when trying to cancel ongoing charges. The rule goes into effect on May 14, 2025, and brings with it several compliance requirements that demand immediate attention.
What the Rule Requires
The Click-to-Cancel rule applies to any business using a “negative option” feature—that is, any offer that interprets a consumer’s silence or inaction as consent to be charged. Key requirements include:
- Equal Ease of Cancellation: Businesses must allow consumers to cancel subscriptions using the same method they used to sign up. If a consumer enrolls online, they must be able to cancel online—without needing to call or speak with an agent.
- No Retention Roadblocks: Businesses may not use lengthy scripts, mandatory surveys, or multiple screens designed to delay or dissuade cancellation. Retention offers must be expressly agreed to by the consumer before being presented.
- Clear and Conspicuous Disclosures: Before charging a customer, businesses must clearly disclose:
- The fact that the charge is recurring;
- The frequency and amount of charges;
- The deadline to cancel to avoid being charged;
- The specific cancellation mechanism.
- Affirmative Informed Consent: Companies must obtain explicit, informed consent to all material terms—including the recurring nature of the agreement—before charging the consumer. Consent must be separate and unambiguous, not hidden in general terms and conditions.
- Recordkeeping and Compliance: Businesses must maintain proof of consent and cancellation mechanisms, along with compliance procedures, for at least three years.
What This Means for Your Business
The FTC has made clear that enforcement will be active and aggressive. Civil penalties for non-compliance can exceed $50,000 per violation, and failure to comply could also expose companies to state-level enforcement or private class actions.
This rule affects not only traditional subscription services but also streaming platforms, software-as-a-service (SaaS) businesses, membership organizations, mobile apps, and any business using continuity billing models. If your cancellation process requires more than a few clicks—or if your sign-up process is clearer than your termination flow—you may already be at risk.
How Pastore LLC Can Help
Pastore LLC works with clients in regulated industries, tech, fitness and consumer services to help implement compliant billing and subscription structures. Our attorneys assist with:
- Auditing current enrollment and cancellation flows;
- Drafting compliant disclosures and consent language;
- Advising on recordkeeping practices and enforcement exposure;
- Defending businesses facing FTC scrutiny or consumer claims.
As enforcement approaches, a proactive review of your subscription workflows is not only prudent—it is essential. We can help your legal, marketing, and tech teams align on a compliance strategy that minimizes disruption while satisfying the FTC’s new requirements.
Contact us to schedule a compliance review or learn more about implementing a cancellation process that meets federal standards.
Pastore LLC Resolves Equity Dispute in Connection with Seven-Figure Company Sale
Pastore LLC recently secured a favorable settlement for a client involved in a partnership dispute regarding his equity in a Connecticut company he co-founded. The disagreement was resolved in connection with the seven-figure sale of the business.
Our client’s interest in the company was challenged during the negotiation of the sale, prompting a dispute over ownership and entitlement to proceeds. Pastore LLC intervened quickly, applying strategic pressure to protect our client’s equity position and ensure a just resolution in connection with the transaction’s close.
This matter highlights our firm’s strength in resolving high-stakes partnership and equity disputes. If your ownership rights or equity interests are being challenged, Pastore LLC stands ready to protect your position and deliver results.
Pastore LCC Claims Jury Trial Was Wrongfully Denied
Pastore LLC represents a co-founder of an investment firm in challenging a $10.4 million judgment in Connecticut superior court, arguing that the trial court improperly denied his right to a jury trial. The dispute centers on whether both parties had provided mutual written consent to a jury trial before the court unilaterally removed the case from the jury docket in February 2023. The plaintiffs, who initially sought a jury trial, later withdrew their claim and secured a bench trial verdict in August 2023.
Pastore LLC argued to the Connecticut appellate court in February that the trial court’s decision was both legally unprecedented and prejudicial, as it deprived the defendant of due process. The firm contends that the plaintiffs leveraged the procedural misstep to avoid a jury trial, after previously failing to secure a favorable outcome in federal court on similar claims, a jury trial won by Pastore in 2019.
The appeal remains under review by the Connecticut Appellate Court
Connecticut’s Amended Data Privacy Law: What Health Clubs Need to Know
The Connecticut Data Privacy Act (CTDPA) has introduced new compliance requirements that impact fitness clubs, gyms, and wellness centers operating in the state. The law, which became effective on July 1, 2023, and was amended in October 2023, establishes strict consumer data protection rules, particularly for businesses that handle sensitive health information.
For health clubs, compliance is essential to avoid penalties and maintain consumer trust. Below, we outline the key changes, the types of health data affected, and the health clubs to which the law applies.
Applicability of the CTDPA to Fitness Clubs
The CTDPA applies to health clubs and wellness businesses that meet at least one of the following thresholds:
- The business processes the personal data of at least 100,000 Connecticut consumers annually, excluding data collected solely for payment transactions.
- The business processes the personal data of at least 25,000 Connecticut consumers and derives at least 25 percent of its gross revenue from selling consumer data.
Businesses covered under this law include large gym chains and boutique studios if they meet the data processing threshold. The CTDPA further applies to health and wellness centers that collect and store consumer health data, as well as digital fitness platforms and fitness applications operating in Connecticut.
The law does not apply to small, independent gyms that do not collect or process significant amounts of consumer data, personal trainers who do not store extensive client information, or medical fitness facilities governed by the Health Insurance Portability and Accountability Act (HIPAA), such as hospitals and physical therapy centers.
If a health club collects consumer health data, tracks workouts, or engages in data-driven marketing, it must determine whether it meets the CTDPA thresholds and take necessary compliance measures.
Types of Data Covered Under the CTDPA
The CTDPA applies to sensitive personal data collected by health clubs, including:
- Biometric data, such as fingerprints, facial recognition scans, and retina scans used for identity verification and gym access.
- Health and medical history, including pre-existing conditions, injuries, medications, and pregnancy status provided during membership enrollment or personal training assessments.
- Fitness and performance data, including body composition analysis, workout history, heart rate monitoring, and cardiovascular assessments.
- Nutritional information, including dietary preferences, meal plans, and supplement use recorded during nutrition counseling sessions.
- Mental health and behavioral data, such as self-reported stress levels, sleep patterns, and wellness tracking.
- Payment and insurance details, such as information collected for employer-sponsored wellness programs or health insurance reimbursement.
- Location and movement data, including gym check-in records, geofencing data, and wearable device integrations.
Sensitive health data is subject to heightened security and privacy protections under the CTDPA. Health clubs must ensure that they collect and process this data in compliance with the law’s requirements.
Key Compliance Requirements for Fitness Clubs
- Obtain Explicit Consumer Consent
Health clubs must obtain clear, informed consent before collecting or processing biometric data, health records, or fitness tracking information. - Update Privacy Policies
Businesses must implement a consumer-friendly privacy policy that explicitly outlines what health data is collected, how it is stored and used, and how consumers can request data deletion. - Allow Consumers to Opt Out
Beginning January 1, 2025, fitness clubs must comply with global opt-out signals from consumers who do not wish for their data to be used for advertising or data sales. - Limit Data Collection
Businesses should collect only the minimum amount of consumer health data necessary for their operations. The use of location-based fitness tracking must be limited and should require consumer consent. - Conduct Data Protection Assessments
Prior to engaging in targeted advertising, biometric tracking, or large-scale data processing, health clubs must conduct an internal privacy impact assessment to evaluate compliance with the law. - Enhance Data Security Measures
Health clubs must implement robust cybersecurity measures to prevent unauthorized access to sensitive health data, as well as data breaches and misuse. - Establish Consumer Data Access and Deletion Procedures
The CTDPA grants consumers the right to access, correct, and request deletion of their personal data. Fitness clubs must establish a process to respond to such requests within 45 days.
Conclusion
With Connecticut’s updated privacy laws in full effect, health clubs must review their data collection practices, update privacy policies, and ensure compliance to avoid legal penalties. Health clubs that process consumer health data must be particularly diligent in adhering to the law’s requirements, as enforcement actions from the Connecticut Attorney General’s Office have already begun.
Proactive compliance not only helps avoid regulatory fines but also strengthens consumer trust and business reputation. Health clubs should consult legal counsel or data privacy experts to assess their compliance obligations under the CTDPA.
Pastore LLC Challenges SEC in High-Stakes Second Circuit Appeal
Pastore LLC represents the CEO of a technology company and the company before the Second Circuit in a high-stakes SEC enforcement appeal. The case challenges a Connecticut federal judge’s reliance on post-trial “new facts” to impose a $441,000 judgment, including disgorgement and civil penalties. Pastore, hired after Cozen O’Connor handled the trial, argued that the district court violated the defendant’s constitutional rights by issuing a permanent industry ban and securities law injunction without jury consideration.
The SEC admitted post-trial that it could not identify harmed investors but later produced a declaration claiming 2,967 traders lost $1.69 million—without linking those losses to the alleged fraud. The agency’s shifting position contradicts the Second Circuit’s precedent in SEC v. Govil, which requires demonstrable pecuniary harm for disgorgement. The trial court’s reliance on financier loans, rather than investor losses, further undermines the judgment.
Pastore asserts that the district court’s process deprived the defendants of due process and exceeded its authority. The firm is aggressively challenging the SEC’s approach and seeking to overturn the ruling before the Second Circuit.
Lessons for Fitness Developers: Legal Roadblocks in Zoning and Land Use Disputes
The legal battle over a proposed Life Time Fitness facility in Stamford, Connecticut, offers critical lessons for fitness developers, gym owners, and investors navigating zoning laws and community resistance. The case, High Ridge Real Estate Owner, LLC v. Stamford Board of Representatives, underscores the legal roadblocks that can arise when trying to develop fitness facilities, particularly in mixed-use or office park settings.
Key Legal Issues & Roadblocks in Fitness Facility Development
- Zoning Restrictions Can Block Fitness Use in Office Districts
- In Stamford, C-D (Designed Commercial) zoning districts did not explicitly allow fitness centers. The developer had to seek a text amendment to redefine permitted uses, adding “Gymnasium or Physical Culture Establishment.”
- Lesson: Developers must anticipate zoning hurdles and explore whether fitness centers are permitted by right or require variances, special permits, or zoning amendments.
- Community Opposition Can Derail Approvals
- Local homeowners organized a protest petition that forced a political review by the Board of Representatives, leading to the rejection of the zoning amendment despite prior approval by the Stamford Zoning Board.
- Lesson: Developers should proactively engage with local communities early in the process to mitigate opposition, address concerns (e.g., traffic, noise, parking), and avoid last-minute legal battles.
- Political Influence in Zoning Decisions
- The Board of Representatives, an elected legislative body, had final say under Stamford’s Charter, allowing them to override the Zoning Board’s decision.
- The case raised questions about predetermined biases, potential conflicts of interest, and ex parte communications between Board members and opponents of the project.
- Lesson: Fitness developers should prepare for political influence on zoning matters and, when necessary, challenge decisions on due process or conflict of interest grounds.
- Legal Standards in Zoning Appeals
- The case debated whether the Board’s rejection was based on objective zoning principles (such as land use compatibility) or political considerations.
- The Stamford Charter requires the Board to be “guided by the same standards as the Zoning Board,” yet opponents argued that the decision was driven by political pressure rather than proper zoning analysis.
- Lesson: Developers must ensure their proposals align with the city’s master plan, comply with legal standards, and, if rejected, challenge decisions that are arbitrary or politically motivated.
- Long Timelines & Litigation Risks
- This zoning dispute has dragged on since 2018, with multiple legal proceedings, including a Connecticut Supreme Court ruling in 2022 affirming the validity of the protest petition.
- Lesson: Fitness developers should factor in potential delays due to legal appeals and community opposition when planning projects. Legal fees, holding costs, and lost revenue from delayed openings must be part of financial projections.
Takeaways for Fitness Developers & Industry Professionals
- Know Your Zoning: Before committing to a location, confirm that fitness centers are an allowed use or anticipate rezoning challenges.
- Engage the Community: Public support can be as critical as legal compliance. Address concerns like traffic, noise, and environmental impact proactively.
- Understand Political Risks: Local boards and elected officials may prioritize constituent pressure over business interests. Lobbying efforts and legal preparedness are key.
- Be Prepared for Litigation: Zoning disputes often lead to prolonged legal battles. Have a legal strategy in place to defend approvals and challenge improper rejections.
- Consider Alternative Locations: If a project faces heavy resistance, assess whether another district or municipality is more accommodating to fitness-related development.
As this case demonstrates, even well-funded national fitness brands like Life Time can face significant legal hurdles in developing new locations. Fitness professionals and developers must be strategic, proactive, and legally prepared when expanding in regulated markets.
Pastore Retained in Two Separate National Advisory Disputes
Pastore has been retained by partners at PwC and Grant Thornton in connection with disputes involving compliance work, Morgan Stanley, Citi Bank and other large financial institutions. Calling on Pastore’s broad depth of experience in corporate governance, securities compliance and technology law, Pastore has been selected to handle disputes that have connections to New York, Chicago, Atlanta, Charlotte and Florida. Pastore attorney’s involved are members of the New York Bar Association Securities Division and are formerly affiliated with Paul, Weiss, Rifkind, Wharton & Garrison and Kelley Drye & Warren LLP.
Pennsylvania Jury Awards Plaintiff’s $29M in Fraudulent FINRA Filings Case
In a significant ruling for the financial services industry, the Pennsylvania Superior Court ruled on a dispute involving allegedly defamatory regulatory filings by Bryan Advisory Services, LLC (“BAS”) against two financial advisors. This case raised a serious question as to whether courts, rather than FINRA, has the authority to preside over disputes involving FINRA registration forms. The case, Constantakis v. Bryan Advisory Services, LLC, centered on Uniform Termination Notices (U5 Forms) and an Investment Adviser Public Disclosure (IAPD) filed by BAS that accused the advisors of fraudulent conduct. The U5 Forms are generally not publicly available, but they are available to prospective employers. The trial court found these filings to be “reckless, and potentially malicious” and devoid of any factual basis.
Despite BAS’s argument that such disputes fall under FINRA’s jurisdiction, as many of these disputes are subject to mandatory FINRA arbitration, the Pennsylvania Superior Court upheld the trial court’s determination, in part because this case was about correcting unsubstantiated public filings that were devastating to the plaintiffs’ careers. The court noted, “Unlike in [prior cases], the Form U5s and the IAPD do not merely exhibit [defendants’] opinion regarding [plaintiffs’] professional integrity. In this case, [defendants’] filing … also impact [plaintiffs’] very livelihoods and their ability to work in the investment industry in any capacity.”
The court specifically analyzed whether the Form U5s are subject to an absolute privilege or a conditional privilege. An absolute privilege gives the employer immunity from litigation for making false statements, and a conditional privilege protects employers only when their false statements were made in good faith or with reasonable care. The court did not decide conclusively the level of privilege allowed to employers, but said: “We conclude Appellees have established a likelihood that the trial court in this matter would apply a conditional rather than absolute privilege. We further believe that Appellees have produced sufficient evidence to overcome the conditional privilege by a showing of negligence on the part of Appellants.” Other states, like New York, have an absolute immunity for Form U5’s that allow employees who are defamed to commence an arbitration or court action to expunge the defamatory language. It is uncertain whether this ruling will be followed or be persuasive outside of Pennsylvania, however, as each state would need to make its own independent determination.
The Superior Court also found that requiring BAS to amend its filings with neutral language did not amount to unconstitutional prior restraint, as it addressed past conduct rather than prohibiting future speech. Plaintiffs’ request for a jury trial was also supported by Pennsylvania’s Constitution. Article I, Section 6 of the Constitution explicitly aims to “[secure] the right of trial by jury before rights of person or property are finally determined.”
Matters involving U5’s always implicate defamation, which inherently involves matters of “reputation and livelihoods.” Thus, it remains unclear whether this case will infringe upon FINRA’s authority over such issues. This ruling makes it so Pennsylvania employers who are filing U5 forms should be careful to ensure the filings are accurate, and if they are critiquing the employee, to ensure that the language they use in the filing is in good faith.
Pastore Defeats Motion to Dismiss in AAA Arbitration
In a multimillion dollar arbitration based in Chicago, Pastore successfully defeated a motion to dismiss that was brought by a large international accounting and advisory firm. The motion to dismiss sought to eliminate claims that were plead in equity and were outside the controlling Partnership Agreement. Pastore represents a former Principal of the large firm, who formerly specialized in and led their technology and performance management solutions team.