Case Title: Ex parte Encompass Health Corporation.

Citation: 

Docket Number: 1190797

State: alabama

Court: Alabama Supreme Court

Date: 2021-03-12T00:00:00Z

Document:
Rel: March 12, 2021
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. 
Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue,
Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections
may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2020-2021
____________________
1190797
____________________
Ex parte Encompass Health Corporation
PETITION FOR WRIT OF MANDAMUS
(In re: Steven R. Nichols
v.
Encompass Health Corporation)
(Jefferson Circuit Court, CV-03-2023)
BRYAN, Justice.
1190797
Encompass Health Corporation, formerly known as HealthSouth
Corporation ("HealthSouth"), petitions this Court for a writ of mandamus
directing the Jefferson Circuit Court ("the trial court") to vacate an order
entered on June 17, 2020, which amended a February 26, 2016, order
entered by the trial court dismissing with prejudice several defendants in
the underlying action, to dismiss those defendants without prejudice. For
the reasons set forth herein, we grant the petition and issue the writ.
Procedural History
This is the second time this case has been before this Court. See
Nichols v. HealthSouth Corp., 281 So. 3d 350 (Ala. 2018).  The underlying
action was initiated in March 2003 by Steven R. Nichols, a former
employee of HealthSouth and a holder of HealthSouth stock; Nichols
initially sued HealthSouth, Richard Scrushy, Weston Smith, William
Owens, and the accounting firm Ernst & Young, alleging fraud and
negligence.1 As we noted in Nichols, "[t]he action was delayed for 11 years
1At the time the action was initiated, and at various points
throughout the underlying litigation, there were additional plaintiffs and
defendants in this action; however, Nichols is the only remaining plaintiff
and HealthSouth the only remaining defendant.
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for a variety of reasons," 281 So. 3d at 352, but, in the meantime, Nichols
filed several amended complaints.  In his fifth amended complaint, Ernst
& Young was not named as a defendant, but Nichols named an additional
individual defendant, Eugene Smith (Eugene Smith, Richard Scrushy,
Weston Smith, and William Owens are hereinafter collectively referred to
as "the individual defendants").  
On November 25, 2014, Nichols filed his eighth amended complaint,
which named HealthSouth as the only defendant.  At the same time,
Nichols filed a "motion to dismiss [the] individual defendants without
prejudice." (Emphasis added.)  In that motion, Nichols "specifically
reserve[d] all claims against HealthSouth ... based upon respondeat
superior and vicarious liability theories."
On February 26, 2016, the trial court entered an order providing
that Nichols's eighth amended complaint controlled, that HealthSouth
was the only remaining defendant in the action, and that there were now
no claims asserted against any of the other defendants named in the
previously filed complaints.  The trial court stated: "All defendants other
than HealthSouth ... are accordingly dismissed from this action with
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prejudice." (Emphasis added.)  There is no dispute that all parties received
notice of the trial court's February 2016 order dismissing the individual
defendants with prejudice. 
HealthSouth subsequently filed a motion to dismiss Nichols's eighth
amended complaint, arguing, among other things, that "the claims
asserted in that complaint were derivative in nature rather than direct
and were therefore due to be dismissed" based on Nichols's failure to
comply with the demand-pleading requirements of Rule 23.1, Ala. R. Civ.
P. Nichols, 281 So. 3d at 354.   The trial court conducted a hearing on that
motion in May 2016.  During that hearing, when summarizing the
procedural history of the case, counsel for HealthSouth stated that Nichols
had "inexplicably dismissed Mr. Scrushy" from the action and pointed out
that the trial court had dismissed him "with prejudice."  On May 26, 2016,
the trial court entered a judgment granting HealthSouth's motion to
dismiss, concluding that, under Delaware law, which applied to the issue
before the trial court, "a shareholder may not pursue a direct claim based
on the diminution in stock value that all other shareholders suffered." 
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Nichols appealed that judgment; HealthSouth was the only appellee
identified by Nichols in his notice of appeal. 
On appeal, this Court addressed only two issues: (1) whether the
claims asserted in the eighth amended complaint related back to Nichols's
complaint so that those claims were not barred by the statute of
limitations and (2) whether the claims raised in the eighth amended
complaint were direct or derivative claims. See Nichols, supra.  Nichols
did not challenge on appeal the trial court's February 2016 order
dismissing the individual defendants with prejudice.  This Court held that
the claims in the eighth amended complaint related back to the original
complaint and, thus, were not barred by the statute of limitations; we also
reversed the trial court's judgment insofar as it concluded that the claims
raised in the eighth amended complaint were due to be dismissed under
Delaware law.  Thus, we remanded the cause "for further proceedings."
Nichols, 281 So. 3d at 363.  HealthSouth's application for rehearing was
overruled on March 22, 2019, and a certificate of judgment was issued the
same day.
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On remand, the parties engaged in further discovery, and, on March
2, 2020, HealthSouth filed a motion for a summary judgment as to all of
Nichols's claims against it. HealthSouth summarized its basis for seeking
a summary judgment as follows:
"[HealthSouth] is entitled to judgment in its favor on
Nichols's claims because his claims are based solely on alleged
representations made by HealthSouth's former agent, Richard
Scrushy, and his claims against Scrushy were dismissed with
prejudice.  Under Alabama law, if a plaintiff bases its claims
against a principal entity on the conduct of the principal's
agent, the dismissal with prejudice of the claims against the
agent necessarily foreclose the plaintiff's claims against the
principal.  Accordingly, the Court should grant summary
judgment in [HealthSouth's] favor and dismiss Nichols's
claims."
In response to HealthSouth's motion, Nichols filed a motion to
amend the trial court's February 2016 order dismissing Scrushy and the
other individual defendants with prejudice.  Nichols asked the trial court
to amend the order to reflect that he had specifically reserved his right to
proceed against HealthSouth or, in the alternative, to amend the order to
reflect that the individual defendants were dismissed without prejudice. 
 
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HealthSouth objected to Nichols's motion to amend the February
2016 order, arguing that the order had become final at the time the trial
court dismissed Nichols's eighth amended complaint and that, because
Nichols had failed to appeal the trial court's judgment dismissing the
individual defendants with prejudice, that issue was waived on appeal and
the trial court had no authority to amend that final judgment on remand,
unless permitted by Rule 60, Ala. R. Civ. P.   HealthSouth further argued
that none of the grounds for relief from a final judgment set forth in Rule
60(b), Ala. R. Civ. P., applied in this case. 
After both parties filed additional briefs, the trial court conducted a
hearing on May 26, 2020.  At the outset of the hearing, in reference to the
February 2016 order that had dismissed the individual defendants with
prejudice, instead of dismissing them without prejudice as Nichols had
requested, the trial-court judge stated: "I can't tell you why I did that
other than to say that it was probably just a mistake on my part." 
On June 17, 2020, the trial court granted Nichols's motion to amend
and amended the February 2016 order to reflect that the individual
defendants were dismissed from the action without prejudice.  The trial
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court concluded that "the effect of [this Court]'s decision [in Nichols,
supra,] was simply to throw out the order of May 26, 2016. No other
decision of [the trial court] was impacted." Then, determining that the
"mandate rule" -- which generally provides that a lower court may not
reconsider issues already decided by an appellate court -- did not apply
under the circumstances, the trial court concluded that it had discretion
to amend the February 2016 order, that amending the order would be "fair
and proper," and that it had erred in dismissing the individual defendants
with prejudice after Nichols specifically notified the trial court and
HealthSouth of his intent to preserve his claims against HealthSouth.  
The same day, the trial court entered an order denying HealthSouth's
motion for a summary judgment.
HealthSouth timely filed a petition seeking mandamus review of the
trial court's June 2020 order amending its February 2016 order.
Standard of Review
" ' " 'Mandamus is a drastic and extraordinary writ to be issued
only where there is (1) a clear legal right in the petitioner to
the order sought; (2) an imperative duty upon the respondent
to perform, accompanied by a refusal to do so; (3) the lack of
another adequate remedy; and (4) properly invoked
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jurisdiction of the court.' " ' Ex parte Sears, Roebuck & Co., 895
So. 2d 265[, 268] (Ala. 2004) (quoting Ex parte Mardis, 628 So.
2d 605, 606 (Ala. 1993)(quoting in turn Ex parte Ben-Acadia,
Ltd., 566 So. 2d 486, 488 (Ala. 1990))). 'The petitioner bears
the burden of proving each of these elements before the writ
will issue.' Ex parte Glover, 801 So. 2d 1, 6 (Ala. 2001)(citing
Ex parte Consolidated Publ'g Co., 601 So. 2d 423 (Ala. 1992))."
Ex parte Vance, 900 So. 2d 394, 397 (Ala. 2004).
Analysis
In its petition, HealthSouth first argues that the trial court violated
the mandate rule by amending the February 2016 order dismissing the
individual defendants with prejudice following remand from this Court
because Nichols did not appeal any aspect of that order once it became
final.  Considering the requirements for the issuance of a writ of
mandamus set forth above, we first note that it is undisputed that the
jurisdiction of this Court has been properly invoked.  Further, this Court
has held that " '[a] petition for a writ of mandamus is the proper method
for bringing before an appellate court the question whether a trial court,
after remand, has complied with the mandate of this Court or of one of our
intermediate appellate courts.' " Ex parte International Refin. & Mfg. Co.,
153 So. 3d 774, 783 (Ala. 2014)  (quoting Ex parte Edwards, 727 So. 2d
9
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792, 794 (Ala. 1998)).  Accordingly, we must determine whether
HealthSouth has demonstrated a clear legal right to the relief it seeks --
an order vacating the trial court's June 2020 order amending its February
2016 order.
First, HealthSouth contends that the "trial court violated the
mandate rule when it amended its [February 2016] with-prejudice
dismissal order following remand [from Nichols, supra,] because Nichols
did not appeal [any aspect of that order], and therefore waived any
challenge to the with-prejudice aspect of the final judgment."
HealthSouth's petition at 9.  We agree that the trial court's February 2016
order dismissing the individual defendants with prejudice -- though
interlocutory at the time it was entered -- became final on May 26, 2016,
when the trial court dismissed Nichols's claims against the only remaining
defendant in the action -- HealthSouth. See Dickerson v. Alabama State
Univ., 852 So. 2d 704, 705 (Ala. 2002) ("The general rule is that a trial
court's order is not final unless it disposes of all claims as to all parties."
(citing Rule 54(b), Ala. R. Civ. P.)); and Robert S. Grant Constr., Inc. v.
Frontier Bank, 80 So. 3d 901, 902 (Ala. 2011) (noting that, in the absence
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of a proper Rule 54(b) certification, "[i]t is only in the context of an
otherwise final and appealable judgment that an interlocutory order ...
merges with the final judgment and becomes reviewable by way of
appeal").  It is undisputed that, after the February 2016 order became a
final judgment, Nichols did not challenge any aspect of the February 2016
order on appeal and that this Court, in Nichols, did not modify or address
any aspect of the February 2016 order.  As noted above, this Court in
Nichols reversed the May 2016 judgment dismissing Nichols's eighth
amended complaint; held that Nichols's claims were, under Delaware law,
"direct in nature"; and remanded the cause "for further proceedings." 281
So. 3d at 363. 
Thus, we must determine whether the trial court, by modifying an
otherwise final judgment on remand from proceedings that did not disturb
or address that final judgment, exceeded the scope of this Court's mandate
in Nichols.  Concerning the mandate rule, this Court has stated:
"An appellate court's decision is final as to the matters
before it, becomes the law of the case, and must be executed
according to the mandate. Ex parte Edwards, 727 So. 2d 792,
794 (Ala. 1998). Generally, a lower court 'exceeds its authority'
by addressing issues already decided by an appellate court's
11
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decision in that case. Lynch v. State, 587 So. 2d 306, 308 (Ala.
1991). In Anderson v. State, 796 So. 2d 1151, 1156 (Ala. Crim.
App. 2000) (opinion on return to remand), the Alabama Court
of Criminal Appeals held that a trial court's order on remand
that exceeded the scope of the appellate court's remand order
'exceeded [the trial court's] jurisdiction' and was 'a nullity.' See
also Ellis v. State, 705 So. 2d 843, 847 (Ala. Crim. App. 1996)
(on application for rehearing on second return to remand)
('[T]he trial court had no jurisdiction ... to take any action
beyond the express mandate of this court.'), and Peterson v.
State, 842 So. 2d 734, 740 (Ala. Crim. App. 2001) (opinion on
return to third remand) (holding that a trial court 'did not
have jurisdiction' to enter an order that exceeded the scope of
the appellate court's remand order and that, therefore, its
order was 'void'). Similarly, in Ex parte DuBose Construction
Co., 92 So. 3d 49, 58 (Ala. 2012), this Court held that an order
by a trial court that was outside the scope of an appellate
mandate was void."
Honea v. Raymond James Fin. Servs., Inc., 279 So. 3d 568, 570-71 (Ala.
2018) .
HealthSouth contends that "the trial court erroneously held that
only matters expressly addressed by an appellate court cannot be
relitigated on remand." HealthSouth's petition at 14. The trial court
reasoned that it had authority to amend the February 2016 order on
remand from Nichols because the "effect" of this Court's decision in
Nichols "was simply to throw out the order of May 26, 2016," dismissing
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the eighth amended complaint.  Thus, it appears that the trial court
reasoned that it had authority to amend the February 2016 order on
remand because this Court did not expressly include in its mandate that
the trial court could not amend any final judgments pertaining to other
parties to the proceeding below that had not been a subject of the appeal.
Such reasoning is inconsistent with Alabama law and with the law applied
by various United States Courts of Appeals. 
As referenced above, the "mandate rule" is an application of the law-
of-the-case doctrine. See Honea, supra; and Cambridge Univ. Press v.
Albert, 906 F.3d 1290, 1299 (11th Cir. 2018) (stating that the mandate
rule is " 'nothing more than a specific application of the "law of the case"
doctrine' " (quoting Transamerica Leasing, Inc. v. Institute of London
Underwriters, 430 F.3d 1326, 1331 (11th Cir. 2005), quoting in turn
Piambino v. Bailey, 757 F.2d 1112, 1120 (11th Cir. 1985))).  This Court
has held that the law-of-the-case doctrine prevents a party from
relitigating an issue that was addressed before the first appeal of a case
but was not raised in that appeal:
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" 'Under the law of the case doctrine, "[a] party cannot on a
second appeal relitigate issues which were resolved by the
Court in the first appeal or which would have been resolved
had they been properly presented in the first appeal." ' Kortum
v. Johnson, 786 N.W.2d 702, 705 (N.D. 2010)(quoting State ex
rel. North Dakota Dep't of Labor v. Riemers, 779 N.W.2d 649
(N.D. 2010)  (emphasis added)); see also Judy v. Martin, 381
S.C. 455, 458, 674 S.E.2d 151, 153 (2009) ('Under the
law-of-the-case doctrine, a party is precluded from relitigating,
after an appeal, matters that were either not raised on appeal,
but should have been, or raised on appeal, but expressly
rejected by the appellate court. C.J.S. Appeal & Error § 991
(2008)....').
"The doctrine is the same in Alabama. '[I]n a second
appeal, ... a matter that had occurred before the first appeal,
but that was not raised in the first appeal, [is] the law of the
case.' Life Ins. Co. of Georgia v. Smith, 719 So. 2d 797, 801
(Ala. 1998) (summarizing the holding in Sellers v. Dickert, 194
Ala. 661, 69 So. 604 (1915)). The doctrine in this form was
applied in Bankruptcy Authorities, Inc. v. State, 620 So. 2d
626 (Ala. 1993), which was the second of two appeals in that
case. There, this Court held that the failure of the appellant to
raise an issue in its first appeal regarding the sufficiency of the
evidence to support the judgment precluded review of that
issue in the second appeal.4
"____________________
"4Although the Court referred to the appellant's failure
to raise the issue as a 'waiver,' it is just as properly referred to
as a basis for the application of the law-of-the-case doctrine."
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Scrushy v. Tucker, 70 So. 3d 289, 303-04 (Ala. 2011) ("Scrushy II")
(footnote 3 omitted).2
In Scrushy II, which was the second of two appeals from the same
underlying action, this Court specifically rejected an argument that the
law-of-the-case doctrine did not apply to an issue that had not been
specifically addressed by this Court in the first appeal in that case.  In
Scrushy II, Scrushy sought to apply certain defenses to claims filed
against him, despite the facts that he had not raised those defenses
against other claims that the trial court had already ruled upon and that
this Court had affirmed those rulings on appeal. See Scrushy v. Tucker,
955 So. 2d 988 (Ala. 2006) ("Scrushy I"). Specifically, Scrushy asserted
that "the doctrine of the law of the case 'turns on whether the Court
addressed the issue between the parties' [in Scrushy I] and does not apply
because the defenses were not asserted in the first appeal." Scrushy II, 70
2Scrushy II involved a shareholder-derivative action brought by
HealthSouth shareholders against HealthSouth and others, including
Richard Scrushy.  Scrushy II is a separate action from the present case,
although some of the same parties involved in Scrushy II are, or have
been, parties to the present case.
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So. 3d at 303.  Citing the authority quoted above, this Court rejected that
understanding of the law-of-the-case doctrine: "Scrushy's understanding
of the law-of-the-case doctrine is inaccurate: it is not essential to the
application of the doctrine that the issue be asserted in the first appeal.
It is enough that the issue should have been raised in the first appeal." Id.
Because the mandate rule is merely a "specific application" of the
law-of-the-case doctrine, the same reasoning applies to the mandate rule:
a ruling on an issue that could have been, but was not, raised on appeal
becomes the law of the case, and a trial court violates the law-of-the-case
doctrine and the mandate rule by purporting to relitigate that issue on
remand. Persuasive authority from various United States Courts of
Appeals supports this conclusion.  For example, the United States Court
of Appeals for the Tenth Circuit succinctly stated the applicability of the
mandate rule to issues that were not, but could have been, raised on
appeal:
"A lower court is 'bound to carry the mandate of the
upper court into execution and [cannot] consider the questions
which the mandate laid at rest.' Sprague v. Ticonic Nat'l Bank,
307 U.S. 161, 168, 59 S.Ct. 777, 83 L.Ed. 1184 (1939); accord
Ins. Grp. Comm. v. Denver & Rio Grande W. R.R. Co., 329 U.S.
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607, 612, 67 S.Ct. 583, 91 L.Ed. 547 (1947) ('When matters are
decided by an appellate court, its rulings, unless reversed by
it or a superior court, bind the lower court.'); Bryan A. Garner
et al., The Law of Judicial Precedent § 55 at 459 (2016) (Law
of Judicial Precedent) ('When a case has been heard and
determined by an appellate court, the legal rules and
principles laid down as applicable to it bind the trial court in
all further proceedings in the same lawsuit. They cannot be
reviewed, ignored, or departed from.'). Failing to raise an issue
on appeal, or abandoning an issue that was initially raised,
has the same consequences for that litigation as an adverse
appellate ruling on that issue. Thus, the mandate rule applies
not only to issues on which the higher court has ruled but also
'forecloses litigation of issues decided by the district court but
[forgone] on appeal or otherwise waived.' Doe v. Chao, 511
F.3d 461, 466 (4th Cir. 2007) (internal quotation marks
omitted); see United States v. Husband, 312 F.3d 247, 250 (7th
Cir. 2002) ('[A]ny issue that could have been but was not
raised on appeal is waived and thus not remanded.'); id. at 251
('Parties cannot use the accident of remand as an opportunity
to reopen waived issues.' (brackets and internal quotation
marks omitted))."
Estate of Cummings v. Community Health Sys., Inc., 881 F.3d 793, 801
(10th Cir. 2018) (emphasis added).
In Estate of Cummings, the plaintiff alleged several claims against
several defendants, including Community Health Systems, Inc. ("CHSI").
A federal district court dismissed the claims against CHSI for lack of
personal jurisdiction and later disposed of the remaining claims in favor
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of the remaining defendants. The plaintiff appealed and initially
challenged the district court's dismissal of CHSI for lack of personal
jurisdiction, but it later agreed to dismiss CHSI from the appeal.  The
Tenth Circuit Court of Appeals entered an order dismissing CHSI from
that appeal, affirmed the "federal claims" against the other defendants,
vacated the district court's rulings on the supplemental claims against the
other defendants, and instructed the district court to remand the
supplemental claims to state court.  On remand, however, the district
court vacated its earlier dismissal of CHSI for lack of personal jurisdiction
and remanded the claims against CHSI to state court.   On appeal of that
order, citing the authority set forth above, the Tenth Circuit Court of
Appeals held that the district court had violated the mandate in the first
appeal; the court held that its mandate, which had not mentioned CHSI,
"barred any further action with respect to the claims against CHSI." 881
F.3d at 801.
In General Universal Systems, Inc. v. HAL, Inc., 500 F.3d 444 (5th
Cir. 2007), General Universal Systems ("GUS") sued HAL, Inc., and
certain individuals ("the HAL defendants"), raising several claims
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involving alleged theft of proprietary software; GUS also sued several
companies to which HAL had licensed the software program ("the
Customer Defendants").  A federal district court disposed of all of GUS's
claims in favor of the HAL defendants and dismissed the claims against
the Customer Defendants.  In GUS's initial appeal, see General Universal
Sys., Inc. v. Lee, 379 F.3d 131 (5th Cir. 2004), the United States Court of
Appeals for the Fifth Circuit reversed the dismissal of only one claim
against the HAL defendants and remanded "that claim to the district
court for further proceedings not inconsistent with this opinion." Lee, 379
F.3d at 159. On remand, the district court entered another judgment in
favor of the Customer Defendants, "finding that the claims against those
parties were not included in the scope of the remand from [the Fifth
Circuit Court of Appeals]." HAL, 500 F. 3d at 447.   GUS appealed that
judgment, and the Fifth Circuit Court of Appeals held that its "prior
opinion and the circumstances it embraces disposed of any issues related
to the Customer Defendants through waiver." 500 F.3d at 453.  
Specifically, the court held that, although its prior decision did not
"explicitly address the Customer Defendants nor any claim by GUS
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brought against them, this is not surprising based on the absence of any
arguments against the Customer Defendants in GUS's brief in the original
appeal." Id.  Thus, the court concluded, "our remand in the prior opinion
did not include any claims against the Customer Defendants." Id. at 454.
In Doe v. Chao, 511 F.3d 461 (4th Cir. 2007), the United States
Court of Appeals for the Fourth Circuit considered whether a federal
district court had violated the mandate rule on remand from a previous
appeal in the same case.  The court stated:
"The mandate rule ... restricts the district court's
authority on remand from the court of appeals. First, 'any
issue conclusively decided by this court on the first appeal is
not remanded,' and second, 'any issue that could have been but
was not raised on appeal is waived and thus not remanded.'
United States v. Husband, 312 F.3d 247, 250-51 (7th Cir.
2002); see also S. Atl. Ltd. P'ship of Tenn.[ v. Riese], 356 F.3d
[576,] 584 [(4th Cir. 2004)] (stating that the mandate rule
prohibits district courts from 'reconsider[ing] issues the parties
failed to raise on appeal').
"The mandate rule serves two key interests, those of
hierarchy and finality. 'A rule requiring a trial court to follow
an appellate court's directives that establish the law of a
particular case is necessary to the operation of a hierarchical
judicial system.' Mirchandani v. United States, 836 F.2d 1223,
1225 (9th Cir.1988). ...
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"This is not to say appellate courts are somehow superior
or always correct, but only that our system has been served
well by the availability of review and the need for appropriate
review to be final. The mandate rule in fact 'serves the interest
of finality' in litigation. See, e.g., United States v. Thrasher,
483 F.3d 977, 982 (9th Cir. 2007); United States v. O'Dell, 320
F.3d 674, 679 (6th Cir. 2003). 'Repetitive hearings, followed by
additional appeals, waste judicial resources and place
additional burdens on ... hardworking district and appellate
judges.' O'Dell, 320 F.3d at 679 (internal quotation marks
omitted). If no appeal of a judgment is taken, or if the
appellate court determines questions put before it, the orderly
resolution of the litigation requires the district court to
recognize those interests served by final judgments and to
implement the appellate mandate faithfully."
Chao, 511 F.3d at 465-66.
In that case, in a prior appeal, the Fourth Circuit Court of Appeals
had instructed the district court, on remand, "to determine the
reasonableness of [the plaintiff's] attorneys' fee award under the Privacy
Act." Id. at 466.  However, on remand, the district court awarded the
plaintiff attorneys' fees for work performed on an unrelated contempt
motion that the plaintiff had filed earlier in the underlying litigation,
before the plaintiff's first appeal.  The court held:
"[T]he mandate of this court did not permit the district court
to award [the plaintiff] attorneys' fees for work performed on
the contempt motion. In 2004, the district court rejected [the
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plaintiff's] request for fees for his unsuccessful 'motion to hold
the Secretary in contempt,' Doe [v. Chao], 346 F. Supp. 2d
[840,] 850 [(W.D. Va. 2004)], and [the plaintiff] did not appeal
that ruling. At that point, the denial of fees for work performed
on the contempt motion became final. Because the mandate
rule 'forecloses litigation of issues decided by the district court
but [forgone] on appeal or otherwise waived,' the district court
was not free to deviate from this court's mandate by
reconsidering [the plaintiff's] claims for attorneys' fees that it
had denied before appeal and that had not been raised by [the
plaintiff]  on cross-appeal. [United States v. ]Bell, 5 F.3d [64,]
66 [(4th Cir. 1993)]; see also, e.g., S. Atl. Ltd. P'ship of Tenn.[
v. Riese], 356 F.3d [576,] 584 [(4th Cir. 2004)]."
Chao, 511 F.3d at 466.
The same is true in the present case. Because Nichols failed to
challenge the February 2016 order on appeal, any challenge to that order
was waived and was not remanded to the trial court for reconsideration. 
Based on authority from this Court and from various United States Courts
of Appeals, we conclude that the trial court violated the mandate of this
Court in Nichols, supra, when it amended the February 2016 order
dismissing the individual defendants with prejudice.3 Accordingly, we
3The two decisions cited by the trial court to support its conclusion
that the mandate rule did not apply to prevent amendment of the
February 2016 order -- Stewart v. ATEC Assocs., Inc., 652 So. 2d 270 (Ala.
Civ. App. 1994), and Gray v. Reynolds, 553 So. 2d 79 (Ala. 1989) -- are
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conclude that HealthSouth has demonstrated a clear legal right to a writ
of mandamus directing the trial court to vacate its June 2020 order
amending the February 2016 order to dismiss the individual defendants
without prejudice.4
inapposite.  Those cases stand for the straightforward proposition that 
the mandate rule does not require a lower court on remand, or the
appellate court on second review of the case, "to carry out literally the
dicta pertaining to questions that were not then presented." Gray, 553 So.
2d at 81 (emphasis added). See Stewart, 652 So. 2d at 273 (holding that
the trial court was not bound by the mandate rule to apply the dicta from
an appellate decision to the case on remand). The trial court did not
identify any dicta in Nichols that it had authority to ignore so as to justify
its amendment of the February 2016 order on remand; dicta related to the
February 2016 order would have been difficult to identify in Nichols given
that the February 2016 order was not addressed by this Court. 
4HealthSouth also argues that Rule 60(b) could not operate to
provide relief from the February 2016 order because, among other
reasons, the only possible Rule 60(b) ground for relief would be under Rule
60(b)(1), Ala. R. Civ. P., which allows for relief from a final judgment on
the ground of mistake, and the rule requires that a motion for relief from
a final judgment brought under Rule 60(b)(1) be filed "within a reasonable
time ...[but] not more than four (4) months after the judgment ... was ...
taken." Rule 60(b).   See HealthSouth's petition at 17-20.  As noted above,
the February 2016 order became final on May 26, 2016, see Dickerson and
Frontier Bank, supra; however, Nichols did not move to amend that order
until nearly four years after it was entered.  Nichols agrees that Rule
60(b) does not provide a procedural basis for relief from the February 2016
order, although he contends that Rule 60(b) does not apply because the
February 2016 order became interlocutory again after this Court reversed
the May 2016 judgment dismissing the eighth amended complaint and
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Conclusion
For the reasons stated herein, the petition for a writ of mandamus
is due to be granted.  Accordingly, we grant the petition and direct the
trial court to vacate its June 2020 order amending the February 2016
order to dismiss the individual defendants without prejudice. 
PETITION GRANTED; WRIT ISSUED. 
Parker, C.J., and Bolin, Shaw, and Wise, JJ., concur.
Sellers, Mendheim, and Stewart, JJ., dissent.
Mitchell, J., recuses himself.
remanded the cause for further proceedings.  As discussed in detail above,
this is incorrect.  An interlocutory order that later becomes a final
judgment remains a final judgment and the law of the case unless an
appellate court disturbs that judgment on appeal.   There is no indication
that the trial court relied upon Rule 60(b) to grant relief from its February
2016 order, and we agree with both parties insofar as they contend that
Rule 60(b) did not provide the trial court a procedural basis for amending
the February 2016 order under the circumstances of this case. 
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MENDHEIM, Justice (dissenting).
I do not believe that the central argument presented by Encompass
Health Corporation, formerly known as HealthSouth Corporation
("HealthSouth"), warrants mandamus review, and so I respectfully
dissent.  HealthSouth presents Judge Vance's correction of his
February 26, 2016, order -- an order that all parties as well as the main
opinion concede was erroneous -- as a straightforward violation of the
mandate rule.  This Court unquestionably does review mandate-rule
violations by petition for the writ of mandamus because such violations
constitute deviations from direct orders of a superior court, something a
lower court lacks any discretion to do.  But the situation presented here
does not fall into that category.  
"An appellate court's decision is final as to the matters
before it, becomes the law of the case, and must be executed
according to the mandate. Ex parte Edwards, 727 So. 2d 792,
794 (Ala. 1998). Generally, a lower court 'exceeds its authority'
by addressing issues already decided by an appellate court's
decision in that case. Lynch v. State, 587 So. 2d 306, 308 (Ala.
1991)." 
Honea v. Raymond James Fin. Servs., Inc., 279 So. 3d 568, 570-71 (Ala.
2018) (emphasis added). 
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As the author of  Nichols v. HealthSouth Corp., 281 So. 3d 350 (Ala.
2019), I can state unequivocally that the issue presented by HealthSouth's
summary-judgment motion on remand -- whether Steven R. Nichols could
assert claims against HealthSouth after individual defendant Richard
Scrushy accidentally had been dismissed with prejudice by the
February 26, 2016, order -- was not presented, addressed, or decided in
that appeal.  Instead, as the main opinion notes, Nichols had appealed a
May 26, 2016, judgment in which Judge Vance concluded that Nichols's
claims had to be dismissed for failing to follow the demand-pleading
requirements of Rule 23.1, Ala. R. Civ. P., that applied because, Judge
Vance determined, the claims were, under Delaware law, derivative
rather than direct in nature.  This Court in Nichols reversed that
judgment, finding that Nichols's claims were, in fact, direct claims under
Delaware law and thus not subject to the strictures of Rule 23.1. The
Court also addressed the only other argument HealthSouth had raised in
its motion to dismiss that preceded the May 26, 2016, judgment -- that the
claims Nichols asserted in his eighth amended complaint did not relate
back to his original complaint and thus were barred by the applicable
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statute of limitations -- and we concluded that the claims did, in fact,
relate back and, therefore, that the statute of limitations did not bar
Nichols's claims. Notably absent from our decision, and therefore absent
from our mandate in Nichols, was any discussion or decision concerning
the effect Scrushy's dismissal from the case had upon the viability of
Nichols's claims against HealthSouth.  This absence was unremarkable
given that HealthSouth never presented such an argument to Judge
Vance until it filed a summary-judgment motion a full year after the case
had been remanded from this Court to the trial court following our
judgment in Nichols.
The actual reason the propriety of Judge Vance's correction of his
February 26, 2016, order is in question is not because of the mandate from
this Court in Nichols but, rather, because of the understanding in the law-
of-the-case doctrine that issues that could have been raised in a first
appeal but were not argued cannot be revisited after remand of the case
to the trial court.  As the main opinion observes, this Court reiterated that
rule in Scrushy v. Tucker, 70 So. 3d 289, 304 (Ala. 2011):  " '[I]n a second
appeal, ... a matter that had occurred before the first appeal, but that was
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not raised in the first appeal, [is] the law of the case.' "  (Quoting Life Ins.
Co. of Georgia v. Smith, 719 So. 2d 797, 801 (Ala. 1998).)  
The main opinion states that "the 'mandate rule' is an application of
the law-of-the-case doctrine," ___ So. 3d at ___, and "courts often refer to
the mandate rule as a subset of the law-of-the-case doctrine."  Washington
v. Bishop, Civil Action No. GLR-16-2374, Aug. 5, 2019 (D. Md. 2019) (not
selected for publication in Federal Supplement).  However, even if the
concepts are related, HealthSouth has inappropriately conflated the two
concepts in order to obtain mandamus review.  
"Application of the 'law of the case' principle is not absolute as
a court has the discretionary power not to adhere to a previous
legal conclusion it reached earlier in the same case.  See, e.g.,
Eckell v. Borbidge, 114 B.R. 63, 68 n.5 (E.D. Pa. 1990).  In
contrast, application of the 'mandate rule' is 'nondiscretionary.'
Coquillette, et al., 18 Moore's Federal Practice 3d, § 134.23[1],
at 134-58 (2000).  A trial court has no authority upon remand
to deviate from the legal conclusions reached by an appellate
court."
In re Phoenix Petroleum Co., 278 B.R. 385, 396 n.9 (Bankr. E.D. Pa.
2001).  This Court made the very same observation about the
discretionary nature of the law-of-the-case doctrine in Barnwell v. CLP
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Corp., 264 So. 3d 841, 850 (Ala. 2018), in which it applied the rule as
expressed in Scrushy:
"Application of the law-of-the-case doctrine is discretionary
rather than mandatory, Ex parte Discount Foods, Inc., 789
So. 2d 842, 846 n.4 (Ala. 2001), and there are exceptions to the
doctrine.  For example, '[i]f ... an observation by the appellate
court concerning an issue is premised on a particular set of
facts, and the nature of the remand is such that it is
permissible and appropriate to consider additional facts
relevant to the issue, the law-of-the-case doctrine is
inapplicable.'  Lyons v. Walker Reg'l Med. Ctr., 868 So. 2d
1071, 1077 (Ala. 2003).  Further, 'the law-of-the-case doctrine
may be disregarded if the court is convinced its prior decision
was clearly erroneous or there has been an intervening change
in the law.'  Belcher v. Queen, 39 So. 3d 1023, 1038 (Ala.
2009)."
(Emphasis added.)  See also 18B Charles Alan Wright, Arthur R. Miller,
and Edward H. Cooper, Federal Practice & Procedure § 4478.6 (2019)
("Focus on the mandate rule is desirable only if its requirements are met --
if the appellate court in fact did not consider and resolve an issue not
presented on the first appeal, the trial court acting on remand should not
be bound as tightly as if the issue had in fact been resolved. The trial
court should take account of the needs of orderly progression through the
trial and appeals processes in deciding whether to reconsider its own
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pre-appeal ruling, but so long as further proceedings are otherwise
appropriate on remand there is no point in pretending that the trial court
owes fealty to a nonexistent appellate ruling.").
This distinction concerning discretion between the mandate rule and
the law-of-the-case doctrine matters in this instance because HealthSouth
seeks mandamus review under the guise of the mandate rule, positing
that Judge Vance had no discretion to correct his February 26, 2016, order
that dismissed Scrushy with prejudice because doing so would violate our
mandate in Nichols.  But because the mandate rule is not implicated here,
the impetus for mandamus review evaporates due to the discretion
permitted in applying the law-of-the-case doctrine.5  Cf. Ex parte Lang,
500 So. 2d 3, 5 (Ala. 1986) ("In the absence of abuse, the exercise of a
discretion vested in the trial court obviates the use of the remedy of
5Even the law-of-the-case doctrine is not the most precise concept to
describe what is at issue here:  "In most cases, the decision not to press an
argument is the result of 'an unreflected failure to think about the
procedural need to make a choice (forfeiture),' rather than 'a conscious
choice to abandon a position (waiver).' "  Howe v. City of Akron, 801 F.3d
718, 743 (6th Cir. 2015) (quoting Wright et al., § 4478.6).  Regardless,
"[s]uitably persuasive reasons justify relief from either forfeiture or
waiver."  Wright et al., § 4478.6.
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mandamus.").  Indeed, I have been unable to find a single instance in
which this Court has afforded mandamus review for an alleged violation
of the law-of-the-case doctrine as opposed to the several instances in
which mandamus review has been invoked to apply the mandate rule, and
HealthSouth fails to cite any such case in its briefs to this Court.
Accordingly, because the mandate rule is not implicated in this case, and
because that is the basis upon which the main opinion purports to allow
mandamus review, I believe the petition is due to be denied.6
6HealthSouth also seeks mandamus review on the basis that
Rule 60(b), Ala. R. Civ. P., does not permit correction of Judge Vance's
February 26, 2016, order, but, as the main opinion observes, "[t]here is no
indication that the trial court relied upon Rule 60(b) to grant relief from
its February 2016 order." ___ So. 3d at ___ n.4.  In any event, I find
HealthSouth's arguments asserting the inapplicability of Rule 60(b) to be
wholly inadequate to warrant relief on that basis, and apparently a
majority of the Court agrees given that the discussion of Rule 60(b) is
relegated to a single footnote at the end of the main opinion.  See id.
31