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 and
only advertising partner of defendant Advisory; those two have similar
websites. Review Counsel’s disclosure banner at the top of its webpages, which
previously stated that Review Counsel was “affiliated with” Mutual of Omaha,
now states that it is “owned and operated by Mutual.” Likewise, Advisory
updated its “Disclaimers” page with a “[l]ist of [a]dvertising [p]artners” that
“have paid to advertise with [Defendant Advisory]”; a list that includes only
Mutual 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 to
Retirement Funding Solutions (RFS), which was previously listed as Defendants’
number two recommended reverse mortgage provider, but which is also Mutual of
Omaha in a different hat.
Longbridge argued that both websites still: (1) falsely
represent those defendants as independent organizations using objective ratings
despite their financial relationship with Mutual of Omaha; (2) use “arbitrary
and statistically unsound criteria” that artificially boost Mutual of Omaha’s rating
as a reverse mortgage provider while deflating other providers’ scores; and (3)
use false and misleading Google ads and landing pages that promise consumers
information about “Top 3” reverse mortgage providers while actually only
promoting Mutual of Omaha.
Longbridge sought an injunction requiring removal of various
webpages and reviews/review metrics, including a review of Longbridge that
falsely listed it as not being licensed in Hawaii. After Longbridge moved for
injunctive relief, Review Counsel stopped using the phrase “Top 3 Reverse
Mortgages” in its sponsored Google ads and instead used “2025’s Best Reverse
Mortgages” and “Top U.S. Reverse Mortgage Companies Reviewed & Ranked.” It
also removed the false statement that Longbridge was not licensed in Hawaii.
The court found that the Hawaii statement was literally
false. And ads promising information about “Top 3” reverse mortgage providers were
literally false “because those ads redirected consumers to landing pages that
highlighted Mutual of Omaha and RFS—which the parties agree are the same
company—as two of the three ‘top’ providers.”
Likewise, “spotlighting and recommending of Mutual of Omaha
and RFS as two separate reverse mortgage providers was literally false by
necessary implication.” Listing them side by side, describing them as “some of
our notable reverse mortgage loan partners” and “industry leaders,” describing
both as having “[e]xcellent customer service” and “[g]reat borrower reviews
from independent sites,” and listing a different phone number for each
necessarily 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. Review
Counsel’s previous banner disclosure, stating that Review Counsel was
“affiliated with” Mutual of Omaha and RFS, was “literally true but obfuscated
Mutual of Omaha’s actual control and ownership of Review Counsel.” (The court
didn’t identify extrinsic evidence of deception, though I don’t think it should
have to.)
What about the current websites, highlighting Mutual of
Omaha as their “Featured” or “Top” reverse mortgage company? Longbridge argued
that their disclosures were insufficient and too far removed to reveal the true
nature of Mutual of Omaha’s ownership and control of Review Counsel and
Advisory, 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 is
an evergreen banner stating that “Review Counsel is owned and operated by
Mutual of Omaha Mortgage,” and a bolded “Disclosure” link at the top of the
landing 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 the
landing page stating that “[t]he companies listed on this page compensate us as
advertising partners.” And, at the very bottom of Advisory’s full-form
disclaimer page, Advisory added a “[l]ist of [a]dvertising [p]artners” denoting
Mutual of Omaha as the only company to “have paid to advertise with
[Advisory].” Longbridge didn’t meet its burden to show misleadingness: “While a
consumer would have to read Advisory’s long-form disclosure to understand the
true nature of Mutual of Omaha’s advertising relationship with Advisory, the
other two disclosures on the landing page—albeit less informative—should spur a
reasonable consumer to further inquire about Advisory’s advertising
partnerships. Advisory’s long-form disclosure page ultimately provides that
information.” However, without that specific information, the previous
disclosures were misleading, since they only referred to paid partnerships. “That
Mutual of Omaha is Advisory’s only advertising partner is a vital piece of
information consumers should know to avoid being misled or confused. The
information is particularly salient because Mutual of Omaha is featured on
Advisory’s landing page and Advisory makes vague references to ‘[c]ompanies’
who pay Advisory to be promoted or featured on its website without identifying
those companies.
The court rejected Longbridge’s argument that defendants’
“.org” domain names were misleading and confusing because they are primarily
used for “nonprofit websites such as non-governmental organizations (NGOs),
open-source projects, charitable organizations, and educational platforms.” “To
the extent Defendants’ ‘.org’ usage engenders a false sense of trust and
objectivity, Defendants’ current disclosures likely counteract it.”
What about the ratings criteria and ratings? Longbridge
argued that defendants’ criteria were neither relevant nor meaningful to
reverse mortgage consumers and instead were pretextually selected to make
Mutual of Omaha Defendants’ top rated reverse mortgage provider. But the court
found that ratings with this much judgment involved were likely not factual
claims. “[C]hallenges to the selection of purportedly objective criteria which
are summarized by a five-star rating are not actionable under the Lanham Act.”
Likewise, the individual review pages for Longbridge were
not actionable. Review Counsel’s own “3.7” rating for Longbridge showed alongside
another four-star rating and a button to “Read Reviews.” Clicking that button
brings a consumer to Review Counsel’s consumer review section for Longbridge, a
consumer would see that Longbridge’s four-star rating is based entirely on a
single consumer review stating “Yes. I understand.”
A reasonable consumer should notice
that the 3.7 score [that is, nonactionable opinion] and the four-star score are
distinct since they are side-by-side and numerically different. Additionally,
if a reasonable consumer were to click on “Read Reviews” to read the four-star
consumer review, they would likely conclude it was not relevant to evaluating
Longbridge’s services since the consumer review is nonsensical—stating, “Yes, I
understand.”
As for Longbridge’s complaints about Mutual of Omaha’s
individual consumer ratings, there was no suggestion that Review Counsel authored
or influenced them.
However, Advisory’s prior statements that its reviews and
scores “are based upon Advisory’s own independent propriety scoring system” and
that advertisement compensation does not influence Advisory’s reviews, scores,
or ratings of providers, were falsifiable. A claim of independence “is a
statement of fact that can be proven true or false.” Given that Advisory was
founded and owned by Mutual of Omaha’s former General Counsel, the Advisory
website was designed using a “templated design footprint” provided by Review
Counsel, and Advisory’s sole advertising partner is Mutual of Omaha, that was
dubious, but the record didn’t support a preliminary injunction.
Materiality: disclosure of the Mutual of Omaha connection
was material “because it misrepresents an inherent quality or characteristic of
Review Counsel’s services—whether a consumer can trust Review Counsel’s reviews
and recommendations.” Even if reverse mortgage consumers were “savvy” and
needed mandatory counseling from a government-approved agency before they could
take out a reverse mortgage, that evidence was too generalized. “Further, the
mandatory counseling occurs well after consumers are exposed to and potentially
influenced by Defendants’ false and misleading statements. It is also contested
whether these counselors are allowed to redirect consumers from their chosen
reverse mortgage provider.” The same was true for Advisory’s disclosures. “Consumers
are more likely to use Advisory’s website if they can trust and rely on the
information Advisory chooses to present. Failing to disclose the sole source of
income for Advisory, when that source is a reverse mortgage provider
highlighted 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’t
rebut. It didn’t matter that Longbridge had no evidence of harm or that
defendants voluntarily changed their websites. Even if Longbridge’s business
was growing, that could happen anyway, and its greater growth might have been
stymied by the false advertising. Review Counsel argued that Longbridge itself
paid for favorable placement and ratings on competing comparison/review
websites, but it didn’t Longbridge own and operate any advertising website or
serve as the sole advertiser of a review website that was founded by a former
Longbridge employee. Anyway, “[e]vidence of threatened loss of prospective
customers or goodwill certainly supports a finding of the possibility of
irreparable harm.”
The court also rejected arguments based on Longbridge’s
delay of more than sixteen months in seeking preliminary injunction rebuts the
presumption of irreparable harm. “ ‘[D]elay
is but a single factor to consider in evaluating irreparable injury’; indeed,
‘courts are loath to withhold relief solely on that ground.’ ” Longbridge
discovered Review Counsel’s false advertising in April 2023, then raised formal
complaints to relevant trade associations and state banking regulators between
July 2023 and January 2024 before eventually suing in September 2024. The
magnitude of Longbridge’s “potential harm [became] apparent gradually,
undermining any inference that [Longbridge] was ‘sleeping on its rights.’ ” Longbridge
attempted to resolve its claims extrajudicially during the delay period, and
then 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 require
discontinuing current practices, only that they couldn’t (1) advertise that
Longbridge is not licensed to issue loans in any state or territory where
Longbridge is licensed; (2) advertise to consumers on sponsored Google-search
links that they provide information relating to “Top 3” reverse mortgage
providers when their landing pages advertise fewer than three independent
reverse mortgage providers; (3) advertise RFS on their websites as if RFS were
an independent reverse mortgage provider originating its own loans, including
by representing that RFS has customer support phone lines, reviews, and ratings
that are distinct from Mutual of Omaha; or (4) “diminish” their existing
disclosures.
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