The POWER 30: Eric J. Nystrom

Eric Nystrom has litigated commercial cases of almost every imaginable kind, but his nationwide practice is about 75% construction. Although politicians may announce that the pandemic is over, he believes we are two to four years from knowing what is normal in the industry, or in particular parts of it, post-COVID.

Right now his clients are dealing with the labor and materials shortage, which may become a bigger problem as the economy grows, Nystrom said. The coasts are busier and he sees an increase in both labor supply and demand on the horizon. He believes that the demand will be in commercial construction, including office towers and high-end condominiums. And, he added, “there is significant demand for downtown housing.”

There’s also demand for warehouse construction, Nystrom said. “Take a look at Amazon.”

Nystrom, like some other attorneys, finds the “best value” bidding process, Minn. Stat. sec. 471.345, problematic. The law allows reasonable discretion in evaluating statutory factors in addition to low bid price. “Any time you’re thinking about reasonableness, things are not clear cut,” he said. The biggest issue for lesser-experienced bidders is finding out about opportunities,” he said.

Clients must prioritize projects to cope with labor and material questions, Nystrom said. Some projects are higher priority, especially federal and state government contracts. Projects that require materials from overseas have more problems, and some in states litigation is more difficult. “California is a very difficult environment,” he said.

One effect of the labor shortage is that it may be difficult to find a diverse workforce, he said. This is a common problem across industries where the pool of qualified workers is only so deep, and requires continued attention, he said. At the same time, developers and general contractors don’t necessarily avoid union labor, Nystrom said.

One development that promotes diversification is the number of women moving into in-house counsel positions, Nystrom said. In any business significant enough to have in-house counsel, women have been very successful in leading to more diversification. Woman are moving in-house both because they want to and also because some find the environment more friendly than law firms, he said.

Nystrom also has experience with the International Dispute Resolution Center. “We see a lot more overseas contracts with arbitration clauses,” he said.

The process is very different from litigation in the U.S. and involves finding an arbitrator who is not a citizen of any country that is involved in the matter. Discovery tends to be limited to documents and testimony is submitted in affidavits. There is a hearing that provides for cross-examination and redirect.

“There’s always a concern that something doesn’t come through in an affidavit,” he said.