## Facts

- Karen Holmberg worked for the State of Alaska’s Division of Risk Management from 1979 until resigning in 1987 due to worsening back problems and surgeries.
- Holmberg sought workers’ compensation benefits before the Alaska Workers’ Compensation Board (AWCB).
- The AWCB awarded temporary total disability benefits but denied permanent total disability benefits.
- Holmberg appealed the AWCB denial to the superior court.
- Separately, Holmberg applied to the Public Employees Retirement System (PERS) for disability benefits; the administrative process ultimately reached the Public Employees Retirement Board (PERB).
- PERB later found Holmberg permanently and totally disabled due to work-related accidents and awarded occupational disability benefits.
- While the workers’ compensation appeal was pending, Holmberg supplemented the superior court record with the PERB decision and argued the PERB findings should preclude affirmance of the AWCB denial.
- The superior court affirmed the AWCB, rejecting collateral estoppel based on the PERB decision.
- Holmberg appealed to the Alaska Supreme Court.

## Issues

1. Whether PERB’s later determination that Holmberg was permanently and totally disabled from work-related causes collaterally estopped the AWCB from denying permanent total disability benefits.
2. Whether substantial evidence supported the AWCB’s denial of permanent total disability benefits.

## Decision

- Affirmed.
- The PERB decision had no collateral estoppel effect in the workers’ compensation proceeding because the State’s workers’ compensation obligor (Division of Risk Management) was not in privity with PERS/PERB.
- The AWCB denial of permanent total disability benefits was supported by substantial evidence, despite conflicting proof and the later PERB determination.

## Legal Principles

- Issue preclusion requires, among other elements, privity between the party to be bound and the party (or entity) in the prior adjudication; separate public entities are not automatically in privity.
- A retirement/disability system structured as an independent, multi-employer plan with distinct funding and interests may lack the identity of interests needed for privity with a governmental employer or its workers’ compensation obligor.
- Absent a statutory or functional basis to prefer one agency’s fact-finding, a later administrative determination does not override an earlier final administrative adjudication by a different body.
- Administrative findings are upheld on review if supported by substantial evidence in the record as a whole; the reviewing court defers to the agency’s credibility choices and weighing of conflicting evidence.
- A final judgment may retain preclusive effect even while an appeal is pending; procedural tools (such as stays or post-judgment relief) may address inconsistent outcomes.

## Conclusion

The Alaska Supreme Court held that PERB’s later occupational disability award did not bind the workers’ compensation decision because the State’s workers’ compensation obligor and PERS/PERB were not in privity, and it affirmed the AWCB’s denial of permanent total disability benefits as supported by substantial evidence.


Holmberg v. State, Div. of Risk Mgmt., 796 P.2d 823 (Alaska 1990)