Court finds literal falsity where two supposedly distinct, rated reverse mortgage sellers are actually one

Longbridge Financial, LLC v. Mutual of Omaha Mortgage, Inc.,No. 24-cv-1730-DMS-VET, 2025 WL 1382866 (S.D. Cal. May 13, 2025)

Mutual owns defendant Review Counsel and is the first andonly advertising partner of defendant Advisory; those two have similarwebsites. Review Counsel’s disclosure banner at the top of its webpages, whichpreviously stated that Review Counsel was “affiliated with” Mutual of Omaha,now states that it is “owned and operated by Mutual.” Likewise, Advisoryupdated its “Disclaimers” page with a “[l]ist of [a]dvertising [p]artners” that“have paid to advertise with [Defendant Advisory]”; a list that includes onlyMutual of Omaha. Advisory also added a disclosure to its landing page and“changed some references on its site [previously] describing it as‘independent,’ to ‘objective.’ ” Both websites now omit any reference toRetirement Funding Solutions (RFS), which was previously listed as Defendants’number two recommended reverse mortgage provider, but which is also Mutual ofOmaha in a different hat.

Longbridge argued that both websites still: (1) falselyrepresent those defendants as independent organizations using objective ratingsdespite their financial relationship with Mutual of Omaha; (2) use “arbitraryand statistically unsound criteria” that artificially boost Mutual of Omaha’s ratingas a reverse mortgage provider while deflating other providers’ scores; and (3)use false and misleading Google ads and landing pages that promise consumersinformation about “Top 3” reverse mortgage providers while actually onlypromoting Mutual of Omaha.

Longbridge sought an injunction requiring removal of variouswebpages and reviews/review metrics, including a review of Longbridge thatfalsely listed it as not being licensed in Hawaii. After Longbridge moved forinjunctive relief, Review Counsel stopped using the phrase “Top 3 ReverseMortgages” in its sponsored Google ads and instead used “2025’s Best ReverseMortgages” and “Top U.S. Reverse Mortgage Companies Reviewed & Ranked.” Italso removed the false statement that Longbridge was not licensed in Hawaii.

The court found that the Hawaii statement was literallyfalse. And ads promising information about “Top 3” reverse mortgage providers wereliterally false “because those ads redirected consumers to landing pages thathighlighted Mutual of Omaha and RFS—which the parties agree are the samecompany—as two of the three ‘top’ providers.”

Likewise, “spotlighting and recommending of Mutual of Omahaand RFS as two separate reverse mortgage providers was literally false bynecessary implication.” Listing them side by side, describing them as “some ofour notable reverse mortgage loan partners” and “industry leaders,” describingboth as having “[e]xcellent customer service” and “[g]reat borrower reviewsfrom independent sites,” and listing a different phone number for eachnecessarily implied that the two were separate and independent entities.

In addition, Longbridge showed that other past statements,while not literally false, would likely mislead or confuse consumers. ReviewCounsel’s previous banner disclosure, stating that Review Counsel was“affiliated with” Mutual of Omaha and RFS, was “literally true but obfuscatedMutual of Omaha’s actual control and ownership of Review Counsel.” (The courtdidn’t identify extrinsic evidence of deception, though I don’t think it shouldhave to.)

What about the current websites, highlighting Mutual ofOmaha as their “Featured” or “Top” reverse mortgage company? Longbridge arguedthat their disclosures were insufficient and too far removed to reveal the truenature of Mutual of Omaha’s ownership and control of Review Counsel andAdvisory, and that the sites’ ratings and criteria were “unsound, arbitrary,deceptive and misleading.”

But the court found the current disclosures sufficient,again without any consumer reception evidence.  At the top of every Review Counsel webpage isan evergreen banner stating that “Review Counsel is owned and operated byMutual of Omaha Mortgage,” and a bolded “Disclosure” link at the top of thelanding page that repeats the same disclosure.

Review Counsel page with disclosure at top Advisory with much less impressive disclosure that "the companies" on the page compensate it

Advisory’s current disclosures include a paragraph on thelanding page stating that “[t]he companies listed on this page compensate us asadvertising partners.” And, at the very bottom of Advisory’s full-formdisclaimer page, Advisory added a “[l]ist of [a]dvertising [p]artners” denotingMutual of Omaha as the only company to “have paid to advertise with[Advisory].” Longbridge didn’t meet its burden to show misleadingness: “While aconsumer would have to read Advisory’s long-form disclosure to understand thetrue nature of Mutual of Omaha’s advertising relationship with Advisory, theother two disclosures on the landing page—albeit less informative—should spur areasonable consumer to further inquire about Advisory’s advertisingpartnerships. Advisory’s long-form disclosure page ultimately provides thatinformation.” However, without that specific information, the previousdisclosures were misleading, since they only referred to paid partnerships. “ThatMutual of Omaha is Advisory’s only advertising partner is a vital piece ofinformation consumers should know to avoid being misled or confused. Theinformation is particularly salient because Mutual of Omaha is featured onAdvisory’s landing page and Advisory makes vague references to ‘[c]ompanies’who pay Advisory to be promoted or featured on its website without identifyingthose companies.

The court rejected Longbridge’s argument that defendants’“.org” domain names were misleading and confusing because they are primarilyused for “nonprofit websites such as non-governmental organizations (NGOs),open-source projects, charitable organizations, and educational platforms.” “Tothe extent Defendants’ ‘.org’ usage engenders a false sense of trust andobjectivity, Defendants’ current disclosures likely counteract it.”

What about the ratings criteria and ratings? Longbridgeargued that defendants’ criteria were neither relevant nor meaningful toreverse mortgage consumers and instead were pretextually selected to makeMutual of Omaha Defendants’ top rated reverse mortgage provider. But the courtfound that ratings with this much judgment involved were likely not factualclaims. “[C]hallenges to the selection of purportedly objective criteria whichare summarized by a five-star rating are not actionable under the Lanham Act.”

Likewise, the individual review pages for Longbridge werenot actionable. Review Counsel’s own “3.7” rating for Longbridge showed alongsideanother four-star rating and a button to “Read Reviews.” Clicking that buttonbrings a consumer to Review Counsel’s consumer review section for Longbridge, aconsumer would see that Longbridge’s four-star rating is based entirely on asingle consumer review stating “Yes. I understand.”

A reasonable consumer should noticethat the 3.7 score [that is, nonactionable opinion] and the four-star score aredistinct since they are side-by-side and numerically different. Additionally,if a reasonable consumer were to click on “Read Reviews” to read the four-starconsumer review, they would likely conclude it was not relevant to evaluatingLongbridge’s services since the consumer review is nonsensical—stating, “Yes, Iunderstand.”

As for Longbridge’s complaints about Mutual of Omaha’sindividual consumer ratings, there was no suggestion that Review Counsel authoredor influenced them.

However, Advisory’s prior statements that its reviews andscores “are based upon Advisory’s own independent propriety scoring system” andthat advertisement compensation does not influence Advisory’s reviews, scores,or ratings of providers, were falsifiable. A claim of independence “is astatement of fact that can be proven true or false.” Given that Advisory wasfounded and owned by Mutual of Omaha’s former General Counsel, the Advisorywebsite was designed using a “templated design footprint” provided by ReviewCounsel, and Advisory’s sole advertising partner is Mutual of Omaha, that wasdubious, but the record didn’t support a preliminary injunction.

Materiality: disclosure of the Mutual of Omaha connectionwas material “because it misrepresents an inherent quality or characteristic ofReview Counsel’s services—whether a consumer can trust Review Counsel’s reviewsand recommendations.” Even if reverse mortgage consumers were “savvy” andneeded mandatory counseling from a government-approved agency before they couldtake out a reverse mortgage, that evidence was too generalized. “Further, themandatory counseling occurs well after consumers are exposed to and potentiallyinfluenced by Defendants’ false and misleading statements. It is also contestedwhether these counselors are allowed to redirect consumers from their chosenreverse mortgage provider.” The same was true for Advisory’s disclosures. “Consumersare more likely to use Advisory’s website if they can trust and rely on theinformation Advisory chooses to present. Failing to disclose the sole source ofincome for Advisory, when that source is a reverse mortgage providerhighlighted on Advisory’s website, could certainly influence consumers’decisions to use Advisory’s website and choose a reverse mortgage provider.”

The court presumed irreparable harm, which defendants didn’trebut. It didn’t matter that Longbridge had no evidence of harm or thatdefendants voluntarily changed their websites. Even if Longbridge’s businesswas growing, that could happen anyway, and its greater growth might have beenstymied by the false advertising. Review Counsel argued that Longbridge itselfpaid for favorable placement and ratings on competing comparison/reviewwebsites, but it didn’t Longbridge own and operate any advertising website orserve as the sole advertiser of a review website that was founded by a formerLongbridge employee. Anyway, “[e]vidence of threatened loss of prospectivecustomers or goodwill certainly supports a finding of the possibility ofirreparable harm.”

The court also rejected arguments based on Longbridge’sdelay of more than sixteen months in seeking preliminary injunction rebuts thepresumption of irreparable harm.  “ ‘[D]elayis but a single factor to consider in evaluating irreparable injury’; indeed,‘courts are loath to withhold relief solely on that ground.’ ” Longbridgediscovered Review Counsel’s false advertising in April 2023, then raised formalcomplaints to relevant trade associations and state banking regulators betweenJuly 2023 and January 2024 before eventually suing in September 2024. Themagnitude of Longbridge’s “potential harm [became] apparent gradually,undermining any inference that [Longbridge] was ‘sleeping on its rights.’ ” Longbridgeattempted to resolve its claims extrajudicially during the delay period, andthen the potential for harm increased with Advisory’s founding in January 2024.An additional eight months delay wasn’t dispositive under these circumstances.

The good news for defendants: the injunction didn’t requirediscontinuing current practices, only that they couldn’t (1) advertise thatLongbridge is not licensed to issue loans in any state or territory whereLongbridge is licensed; (2) advertise to consumers on sponsored Google-searchlinks that they provide information relating to “Top 3” reverse mortgageproviders when their landing pages advertise fewer than three independentreverse mortgage providers; (3) advertise RFS on their websites as if RFS werean independent reverse mortgage provider originating its own loans, includingby representing that RFS has customer support phone lines, reviews, and ratingsthat are distinct from Mutual of Omaha; or (4) “diminish” their existingdisclosures.