Lawsuits allege Portneuf Medical Center retaliated against whistleblowers for reporting dirty surgical tools | Local

PMC officials deny the claims, describing them as meritless, and the hospital recently announced it received multiple center of excellence accreditations for its surgical practices.

The lawsuits describe a culture of concealment at PMC, where administrators allegedly canceled safety tests, blocked investigations and blamed those who raised alarms rather than fix the problems.

PMC, its parent company Ardent Health Partners and several hospital administrators — including CEO Nate Carter, Chief Medical Officer Dr. Roger Passmore and Operating Room Manager Debra Schneider — are named as defendants in both suits.

Idaho Department of Health and Welfare investigation

As part of the investigation, IDHW conducted an on-site complaint investigation Sept. 2-4, 2025, where surgical records and incident reports were reviewed, surgical observations were conducted and multiple staff members were interviewed.

“Incident reports revealed there were numerous discoveries of bioburden (tissue fragments) on surgical instruments that were supposed to be clean and sterile,” the IDHW report stated. “Additionally, the infection control officer noticed an increase in surgical site infections.”

Though the allegation that triggered the IDHW investigation was confirmed, no deficiencies were cited in the report due to PMC conducting a prior internal review that “discovered the cause of the problem was a breakdown in the reprocessing responsibilities between the vendor surgical trays,” the IDHW report says.

“There was a lack of training to the sterile processing department on how to reprocess vendor trays, which contained instruments the staff were not familiar with and did not know how to clean properly,” the IDHW report said. “Additionally, vendors had access to the sterile processing area where they were leaving trays and the (sterile processing department) did not know which trays had been pre-cleaned.”

After the internal review, PMC implemented a remediation plan that involved the sterile processing department reprocessing over 40,000 surgical items, the IDHW report says.

“Further, PMC required vendors to train sterile processing department staff on how to clean and disassemble all instruments, revoked vendors’ access to the sterile processing department, administration visually inspected surgical instruments to verify cleanliness and implemented a hard stop where if sterile processing department staff were not familiar with instruments, they were not to reprocess them,” the IDHW report said. “… Due to the extensive action plan, no deficiencies related to the allegation were cited.”

While PMC attributed the problems to lack of training on vendor trays, Morgan’s lawsuit tells a different story — one stretching back to 2019 and involving broken equipment, financial kickbacks and what he describes as a systematic cover-up.

Morgan worked as a neurosurgeon at PMC under a professional services agreement beginning in May 2019. His complaint alleges that critical equipment became unreliable starting in late 2019, forcing him to perform complex procedures under unsafe conditions for nearly two years.

According to the suit, PMC then entered an “earn-out” arrangement with Medtronic where increased use of that company’s implants would offset new equipment costs. Morgan alleges this created pressure to use Medtronic products for financial reasons rather than patient care.

By 2021 and into 2022, Morgan alleges he noticed a sharp increase in post-operative infections. He observed damaged instrument wrappers, punctured pan covers and visibly unclean surgical tools, the complaint states.

When he reported these concerns, the lawsuit alleges Passmore dismissed them and assured him sterile processing had no issues despite having no legitimate basis for those assurances. The suit alleges PMC made excuses, shifted blame to the devices Morgan used as well as members of his surgical team and then effectively refused any real investigation.

As a result, Morgan temporarily suspended elective surgeries, the suit states. The hospital’s initial report claimed infections were linked to inexperienced surgical technologists, but PMC continued staffing “neurosurgical cases with unqualified personnel and failed to implement any corrective measures,” according to Morgan’s lawsuit.

When Morgan persisted in raising safety concerns, hospital administrators told him his contract required he resume elective surgeries to maintain revenue targets — a statement he calls false and bad-faith interference with his contractual rights, according to his complaint.

Blocked culture tests and alleged contamination

Both lawsuits describe repeated attempts by Morgan to verify instrument sterility through microbial cultures, only to have those orders canceled by hospital leadership.

According to Morgan’s complaint, he personally ordered cultures of surgical instrument trays but Passmore personally canceled these orders on multiple occasions.

Despite PMC administrators canceling his testing orders, Morgan alleges in his complaint that he had cultures performed by the hospital laboratory that returned positive for infection-causing bacteria Staphylococcus aureus, including MRSA — the more difficult to treat Methicillin-resistant variant — and Streptococcus species. These were the same bacterial organisms that were found in numerous post-operative infections, his lawsuit states.

Caudle’s lawsuit alleges that when testing did occur, he and Morgan were told results were “confidential and could not be shared” — a position his complaint describes as “bizarre” given their professional responsibilities.

Caudle’s suit claims internal testing eventually revealed approximately 70 percent of instrument pans tested positive for waterborne bacteria. Despite these findings, hospital administration continued elective surgeries and demanded Morgan increase his surgical volume, both complaints allege.

Additionally, both lawsuits reference a critical incident in late spring 2025 involving a very young, immunocompromised trauma patient.

During that minimally invasive spinal fusion, Morgan and Caudle observed surgical instruments labeled “sterile” that contained visible biological residue, both suits state. Photographic documentation was submitted to hospital administration, according to Morgan’s complaint.

Caudle’s lawsuit alleges he discovered bone material and dried blood inside a cannulated instrument certified as sterile. Two identical instruments had been processed together, but only one was contaminated — indicating inconsistent cleaning practices, according to his complaint.

Morgan immediately halted elective surgeries and notified hospital administration that patient safety was at risk, according to both suits.

A sterile processing employee privately informed Morgan this wasn’t the first time contaminated trays had been delivered to his surgeries, his complaint states. A PMC administrator then instructed Morgan not to inform affected patients, asserting that patient disclosure was the hospital’s responsibility, Morgan’s lawsuit stated.

Morgan’s complaint went on to say he later learned some patients were never notified, prompting him to contact at least one patient personally.

Both plaintiffs allege PMC leadership responded to their safety concerns with retaliation and false accusations.

Morgan’s lawsuit states that hospital administrators, including Passmore, circulated statements falsely attributing infections to Morgan’s surgical technique, personal hygiene and refusal to cooperate with infection-control measures.

Morgan alleges in his suit that during a March 2025 meeting Passmore personally threatened him with contractual consequences, falsely accused him of being the source of infections and attempted to coerce him into performing elective surgeries under unsafe conditions.

Caudle’s lawsuit includes detailed defamation claims against specific hospital employees. According to Caudle’s complaint, Schneider told PMC management and human resources in March 2025 that Caudle called a sterile processing employee “incompetent.”

Caudle’s lawsuit states this never happened, adding that the allegation came the day after he discovered bone material and contamination inside a processed neurosurgical instrument.

Caudle’s lawsuit alleges that between May and July 2025, Passmore told operating room nurses, physicians and other staff that Caudle didn’t know how his equipment operated, was creating equipment problems and lacked technical competency. Caudle’s complaint states these claims were false, noting he had supported more than 1,200 neurosurgical procedures without incident.

Both suits also take issue with PMC’s public statement responding to the state’s investigation. In September 2025, PMC issued a statement saying it had “self-identified an isolated issue with reprocessing certain specialized surgical instruments provided by an outside vendor.”

Caudle’s lawsuit alleges the phrase “outside vendor” was widely understood to refer specifically to him, falsely implying he was responsible for problems internal to PMC.

Regulatory findings and departures

In June 2025, the Joint Commission, an independent, nonprofit organization that accredits and certifies U.S. health care organizations, conducted an unannounced inspection of PMC’s operating room and sterile-processing facilities, Morgan’s suit states. The inspection identified serious deficiencies in sterilization procedures, recordkeeping and staff competency, according to his complaint.

Unable to ensure patient safety, Morgan voluntarily withdrew his surgical privileges at PMC on July 3, 2025, his suit states. Within weeks, the Centers for Medicare & Medicaid Services issued formal findings confirming PMC’s sterile processing department was out of compliance with federal standards, according to his complaint. Those findings preceded the IDHW on-site investigation in September 2025.

Following Morgan’s withdrawal, hospital administrators invoked his contract’s non-compete clause to discourage other regional hospitals from hiring him, according to his complaint. On July 29, 2025, PMC sent a letter to Bingham Memorial Hospital in Blackfoot invoking the non-compete, his suit alleges.

Caudle worked as an independent distributor providing spinal and neurosurgical products and in-room technical support to surgeons at PMC. Beginning around early 2023, Caudle alleges he noticed serious problems with sterilization practices, his lawsuit states.

In May 2025, after he and Morgan again raised concerns about contaminated instruments, Caudle’s access credentials to PMC were suddenly revoked without formal explanation, his suit states, noting that the exclusion prevented him from performing essential functions of his distribution contracts.

Morgan’s 43-page complaint and Caudle’s 40-page complaint share seven causes of action — violation of the Idaho’s Whistleblower Protection Act, tortious interference, defamation, false light invasion of privacy, quasi-estoppel, fraud (and constructive fraud in the alternative), intentional infliction of emotional distress and violation of the Idaho Racketeering Act.

Morgan’s complaint includes three additional claims — breach of contract, breach of the implied covenant of good faith and fair dealing, and constructive discharge in violation of public policy — stemming from his professional services agreement with the hospital.

Both complaints include racketeering claims alleging PMC officers made fraudulent corporate reports about contamination problems.

Both complaints seek compensatory damages exceeding $10,000, punitive damages, equitable relief, treble damages under the racketeering statute and attorney fees.

PMC issued a news release earlier this month stating the hospital achieved multiple accreditations from Surgical Review Corporation as a center of excellence in breast, hernia, minimally invasive and robotic surgeries.

When contacted about Caudle’s lawsuit, Portneuf Medical Center provided the following statement to the Idaho State Journal:

“We do not comment on pending litigation. We take these matters seriously and believe the allegations brought forward have no merit. Our focus continues to be on providing high-quality care and supporting our teams.”

After Morgan’s suit was filed, a PMC spokesperson told the Journal, “We haven’t seen this most recent lawsuit, so we have no additional details to share at this time.”

According to court records, summons were issued to the defendants in both cases on Thursday but PMC and the other defendants have not yet been served.

Both plaintiffs are represented by Pocatello attorney Bron Rammell of May, Rammell & Wells.

Both Morgan and Caudle are demanding jury trials.