Portneuf Medical Center accused of retaliating against whistleblowers over dirty surgical tools

POCATELLO — A local neurosurgeon and a medical device distributor have fired back at Portneuf Medical Center, claiming in a new lawsuit that they were retaliated against after reporting the hospital was using dirty surgical tools.

Dr. Jonathan Morgan, who used to be affiliated with PMC but is now working at Caribou Medical Center, according to a Facebook post, and Dallin Caudle, a senior spine sales representative, according to his LinkedIn page, are separately suing the hospital, alleging they were illegally retaliated against.

In September 2025, officials from the U.S. Department of Health and Human Services conducted an “unannounced on-site complaint investigation” at PMC. The investigation found PMC “failed to ensure patients received care in a safe setting for 1 of 6 patients whose medical records were reviewed.”

EastIdahoNews.com first reported on the allegations and investigation into the dirty surgical tools in October.

Investigators found dirty surgical instruments were not being properly cleaned, and noted an increase in surgical site infections, leading to an “extensive investigation into the incidents,” according to the results of the formal complaint.

RELATED | Portneuf Medical Center makes changes after investigation into dirty surgical tools

The findings say the tool vendors had access to the sterile processing area where medical professionals were leaving trays, and the people in charge of cleaning the tools did not know which trays had been pre-cleaned.

At the conclusion of the investigation, remediation plans to correct the problem were put in place, such as revoking the vendor’s access to the Sterile Processing Department and “implementing a ‘hard stop’ where if staff were not familiar with instruments, they would not reprocess them,” according to the complaint results.

After the investigation, PMC told EastIdahoNews.com that the issues had been fully resolved and that they quickly identified the problem, initiating an extensive internal investigation almost immediately after the issue was discovered.

EastIdahoNews.com reached out to PMC for a statement on the retaliation accusations. They sent the following statement:

“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.”

Caudle’s lawsuit

According to court filings, Caudle is suing Ardent Health Partners (a for-profit healthcare company), PMC, Dr. Roger Passmore (PMC’s chief medical officer), Nate Carter (PMC’s chief executive officer) and Debra Schneider (PMC’s nursing manager).

Caudle is also suing employees at Ardent Health, including Lora Deanne Heikkinen (regional clinical resource director), Jason Ehrlinspiel (chief compliance officer) and Aleigha Wortham-Brown (Sterile Processing Department employee), but these three are only being accused of count III in the lawsuit, for intentional interference with a prospective economic advantage.

Portneuf Medical Center is owned by both Ardent Heath Services and the Portneuf Health Trust.

The others are accused of violating Idaho’s Whistleblower Protection Code, tortious interference with contract, intentional interference with a prospective economic advantage, defamation, violation of the Idaho Racketeering Act, false light invasion of privacy, quasi-estoppel, fraud, and intentional infliction of emotional distress.

According to the lawsuit, Caudle owns Dallin J. Caudle LLC, a medical device distributorship in Bannock County, where he and his company “provide assistance to surgeons and other medical providers, particularly providing spinal and neurosurgical products and assistants in Idaho.”

Caudle’s company reportedly had agreements with multiple manufacturers whose products were used by neurosurgeons practicing at PMC. In 2023, he began providing in-room technical support, surgical instrumentation, and device expertise for procedures performed by Morgan and other neurosurgeons, according to the lawsuit.

PMC reportedly gave Caudle credentials to enter restricted areas, attend surgical procedures, and interact directly with operating room and Sterile Processing Department (SPD) personnel.

The lawsuit states that in 2023, Morgan, Caudle, and other surgical staff “began noticing serious problems with the hospital’s sterilization practices,” such as “which surgical trays and instruments were returned from the Sterile Processing Department with visible bioburden, residue, or incomplete disassembly, creating serious risks to patient safety and infection control.”

In the lawsuit, Caudle states his and Morgan’s “legal, professional, and moral responsibilities are directly connected to the health, safety, and welfare of people who get surgery when either of them is involved.”

Caudle reported, among other things, “visible residue, caked-on blood, and incomplete disassembly of medical implements, tools, and devices.” The hospital’s operating room management and administrative leadership, and the defendants allegedly “blamed (Caudle) and others and “tried to ‘pass the buck.'”

After reporting the concerns, Caudle says he and Morgan began experiencing new issues at work they believe were retaliation for raising cleanliness concerns.

“Culture tests ordered by Dr. Morgan to assess sterility were delayed, cancelled, or blocked by hospital administration in several instances,” the lawsuit says. “Based on what Caudle learned, this was in retaliation for reporting the problems. This retaliation affected Dallin’s work and is part of the basis for this lawsuit.”

The lawsuit claims that in 2025, meetings were held between the Sterile Processing Department, including Caudle and Morgan, and hospital leadership about the unclean surgical tools.

“Ms. Schneider and members of the SPD staff disputed the extent of the issue and expressed clear frustration toward Dallin for raising the concerns,” the lawsuit claims. “At least one person expressing frustration with (Caudle) had been placed on leave for behavioral issues and later returned to work. Within weeks of that person’s return, she complained to management that Dallin had called her “incompetent.” Caudle said this statement was untrue.

In late spring of 2025, after a surgery involving a very “young immuno-compromised trauma patient,” Caudle reportedly discovered dried blood inside a cannulated instrument that had been certified as sterile, the lawsuit says.

After this, Morgan reportedly stopped performing elective surgeries and notified hospital administration that patient safety was at risk. The lawsuit claims that in retaliation, hospital leadership began restricting communication between Morgan’s team (which included Caudle) and SPD personnel.

Requests by Morgan to culture surgical trays for testing and verification purposes were “cancelled” or denied within the hospital’s Infection Control Department, according to the lawsuit.

“When Dr. Morgan and Dallin asked to review the culture reports that had been requested and which they expected to be performed, they were told that the results were confidential and could not be shared,” the lawsuit says. “This was a bizarre response, since the defendants had never taken such a position in the past with respect to cultures involving their tools or instruments.”

Caudle and Morgan then reportedly secretly tested some of the instrument pans and found that approximately 70% were positive for waterborne bacteria. Despite this, PMC reportedly continued elective surgeries.

“Defendants actually demanded that Dr. Morgan increase the number of elective surgeries he was performing, and advised Dr. Morgan that all equipment was ‘clean,’” the lawsuit states. “They informed Dr. Morgan that operations should resume as normal. Dr. Morgan was threatened with an action for breach of contract if he didn’t do additional elective surgeries at that time.”

Again, Morgan and Caudle reported issues, such as “visible contamination in multiple trays, including a Midas Rex drill and a pneumatic Kerrison,” but according to the lawsuit, “Dr. Passmore and Ms. Schneider claimed and argued that the issues had nothing to do with the hospital or its practices, but were instead the result of improper handling by vendors, like (Caudle).”

The lawsuit says Caudle and Morgan began experiencing more “intense scrutiny and unwarranted suspicion,” such as staff stating they were instructed “not to communicate or cooperate with representatives, including (Caudle) and saying they were told to “minimize communication with Dr. Morgan’s team.”

Caudle was reportedly accused of being difficult to work with, being unreachable and violating vendor policies.

“Defendants also made statements to outside manufacturers, falsely claiming that Dallin had improperly solicited surgeons for certain products for personal gain, had smuggled in unapproved vendors, and lacked understanding of his own equipment,” says the lawsuit. “These statements were untrue.”

In May 2025, Morgan and Caudle again raised concerns about the dirty tools, and according to Caudle, his credentials to the hospital were “suddenly revoked” without a formal explanation.

“As a result, he was unable to meet sales quotas, maintain surgeon relationships, or earn commissions owed under his manufacturer agreements,” the lawsuit says.

Soon after, the lawsuit says, the dirty surgical tools were finally investigated by the U.S. Health and Human Services Department and found to be contaminated.

Morgan’s lawsuit

According to court filings, Morgan is suing Ardent Health Partners, PMC, Dr. Passmore (the chief medical officer) and Dr. Jacob Delarosa (a surgeon at PMC).

The lawsuit accuses them of breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contract, tortious interference with prospective economic advantage, defamation and defamation by implication, false light invasion of privacy, quasi-estoppel, constructive discharge in violation of public policy, fraud and constrictive fraud, intentional infliction of emotional distress, violation of the Idaho Racketeering Act, and violation of the Whistleblower Protection Idaho Code.

The lawsuit states that in late 2019 and early 2020, Morgan began noting that some of the neurosurgical equipment was inoperable and unreliable.

“These systems remained nonfunctional for nearly two years, forcing Morgan to perform complex procedures under unsafe and substandard conditions,” says the lawsuit. “PMC’s failure to maintain this equipment violated both the express and implied duties owed to Dr. Morgan under the PSA (Professional Services Agreement).”

Morgan says he reported the problems, but instead of fixing the issue, the defendants “sought an opportunity to make more money out of the situation.”

According to the lawsuit, PMC entered into an “earn-out” arrangement with Medtronic Inc. (a medical device company), in which increased use of Medtronic implants would offset the cost of new equipment. PMC then began replacing the equipment under the Medtronic “earn out” arrangement.

“PMC’s financial alignment with Medtronic created pressure and incentives contrary to the PSA’s protections for Dr. Morgan’s independent judgment,” the lawsuit states. “PMC knew that the arrangement with Medtronic was not in the best interests of its patients and patrons.”

Morgan reportedly raised his concerns with PMC leadership, but eventually agreed to use Medtronic products in appropriate cases. He reportedly refused to follow “any directive requiring him to use particular devices for financial reasons over patient care and need.”

In 2021 and 2022, Morgan says he began noticing a “sharp increase in post-operative infections among neurosurgical patients.”

The lawsuit says he began noticing damaged instrument wrappers, punctured pan covers, and visibly unclean surgical instruments. He reported this to Passmore, who allegedly “participated in dismissing these reports, repeatedly assuring Morgan that sterile processing had no issues despite having no legitimate basis to make such assurances.”

Morgan says the defendants “began making excuses and blaming the devices Dr. Morgan was using, and members of his team, for the infections.” Morgan requested an investigation of the dirty instruments, but says the hospital refused to investigate.

“During this period, Dr. Passmore exercised personal authority to block investigations, override instrument-tray culture orders, and shape a false narrative blaming Dr. Morgan and his team for infections,” Morgan claims.

This prompted Morgan to temporarily suspend all elective surgeries until PMC conducted an internal investigation into the dirty tools. PMC then allegedly issued an initial report stating the infections were likely linked to “inexperienced surgical technologists.”

“Despite PMC’s claims that the problems were caused by the surgical team, PMC continued to staff neurosurgical cases with unqualified personnel and failed to implement any corrective measures,” the lawsuit says. “This caused Dr. Morgan to question the genuineness of the hospital’s report about the cause of the defects and the lack of sterilization.”

Morgan reportedly continued to raise concerns, but says they were downplayed, with staff reminding him “his contract required that he resume elective surgeries in order to maintain revenue targets.”

Morgan continued to resist doing elective surgeries until the dirty surgical tool issue was corrected. He says the defendants “retaliated against him by threatening a breach of contract unless he increased his elective surgeries.”

Throughout 2022 and 2023,  Morgan says he continued to raise concerns about contamination trays, unexplained infections, canceled orders and unsafe staffing, but his relationship with the defendants became “increasingly adversarial.”

Morgan began noticing that he was not receiving monthly reimbursements, and that required reports and payments were being delayed, arriving weeks and months beyond the 30-day deadline.

On March 3, Morgan met with Passmore and others to discuss his concerns and an alleged $800,000 equipment balance related to a Mazor robotic spine system. Morgan says he again reiterated his patient-safety concerns and objected to continued pressure to increase Medtronic implant usage.

According to the lawsuit, his concerns were again dismissed, and he was threatened with being in breach of contract.

“Dr. Passmore personally threatened Dr. Morgan with contractual consequences, falsely accused him of being the source of infections, and attempted to coerce him into performing elective cases under unsafe conditions,” the lawsuit says.

In the following weeks, according to the lawsuit, “multiple neurosurgical patients developed severe post-operative infections caused by organisms such as MRSA, Serratia, Enterobacter, Acetobacter, and Pseudomonas.” The lawsuit claims these infections were “not minor or routine surgical-site issues; they were aggressive, deep infections requiring washouts, prolonged IV antibiotics, and in some cases emergency re-operations.”

Morgan says the infection spanned different patients, procedures, and operative days, including harming healthy patients with no immunocompromising conditions.

“As a result, and out of concern for patients, Dr. Morgan personally ordered microbial cultures of surgical instrument trays to determine whether contamination originated in the Sterile Processing Department,” the lawsuit states. “Dr. Passmore personally cancelled these orders on multiple occasions, knowingly obstructing efforts to identify the source of infections.”

Morgan performed the tests anyway, which reportedly returned positive results for Staphylococcus aureus (including MRSA) and Streptococcus species, the same organisms found in numerous post-operative infections.

According to the lawsuit, when Morgan brought these test results to the defendants, they “refused to accept any responsibility and began to offensively attack Dr. Morgan and others.”

The lawsuit claims PMC’s operating room director and senior administrators “publicly claimed that Dr. Morgan’s personal hygiene, surgical technique, or refusal to be cultured caused the infections.”

In May 2025, during a “minimally invasive spinal fusion” performed on a pediatric trauma patient, Morgan and Caudle reportedly observed surgical instruments labeled “sterile” that contained visible biological residue. The next day, a sterile-processing employee allegedly informed Morgan this was not the first time contaminated trays had been delivered to his surgeries. The lawsuit states Morgan immediately notified risk management and requested a full investigation.

Shortly after, the trauma director allegedly instructed Morgan not to inform affected patients, “asserting that patient disclosure was the hospital’s responsibility. Morgan claims he later learned some patients were never notified. He then contacted at least one of those patients.

In June, the Joint Commission of the U.S. Health and Human Services Department conducted an unannounced inspection of PMC’s operating-room and sterile-processing facilities, finding “serious deficiencies” in sterilization procedures, record keeping and staff competency.

On July 3, Morgan voluntarily withdrew his surgical privileges at PMC.

Around July 8, Delarosa, the surgeon, reportedly held a meeting with a physician’s assistant who had submitted a complaint on the staff website about Morgan’s resignation and the dirty surgical tools.

The PA reportedly believed the complaint was anonymous, but according to the lawsuit, Delarosa told him he had seen it and “Nate Carter sees every complaint.”

Delarosa reportedly told the PA that everything the PA heard from Dr. Morgan about contract delays and negotiations was “wrong,” and insisted there had been no ongoing contract negotiations and “everything was just fine” with Morgan’s contract.

When the PA asked about contaminated trays and culture orders that had been canceled by Passmore, Delarosa reportedly dismissed or denied this, saying the cancellations “weren’t a thing” and then claiming he was not aware of them.

Delarosa reportedly told the PA that Morgan was “risky” and “a little crazy about the infections.”

At the end of the meeting, Delarosa allegedly told the PA that Carter would review the complaint and “see what he needs to have done,” which the PA reportedly interpreted as an implied threat to his job if he continued to support Morgan or questioned the hospital’s intentions.

Morgan also claims hospital administrators invoked the non-compete clause to discourage other regional hospitals from hiring him, including Bingham Memorial Hospital, where he had begun employment discussions.

According to court filings, all defendants in both cases were served with a summons between Jan. 22 and 28.

Further hearings have not been scheduled.