Moehrl Damages Seem Very Conservative

In which I revisit my assumptions about the damages from Moehrl v. NAR

Thanks to Inman News publishing a story where they highlighted potential damages, I have had to re-investigate my previous assumptions. Here’s the relevant part:

The suit went one step closer to trial last week when a federal appeals court denied NAR and the franchisors’ request for permission to appeal Wood’s ruling granting class-action status in the case, which was originally filed in 2019. Because of that denial, the suit will proceed as a class action, meaning that potentially millions of homesellers in 20 MLS markets nationwide can ask to be reimbursed for an estimated $13.7 billion in damages. If the court awards treble damages — or three times the actual damages — that figure could go up to $41.1 billion.

I read that order, but apparently missed seeing “$13.7 billion” in the order. That’s my mistake, because here it is on p. 18:

Economides uses that yardstick estimate to calculate total damages for the class equal to the total commissions paid in the actual world on all class transactions with commission rates above 1.55% minus the total sales price multiplied by the 1.55% yardstick commission rate. That formula estimates the total damages for the class at $13.7 billion. And to calculate transaction level damages, Economides proposes multiplying the sales price by the 1.55% yardstick commission and subtracting that figure from the commission actually paid by the class member.

My previous estimate was $195 billion… a far cry from the $13.7 billion. So I thought I’d re-examine my assumptions to see why the difference.