the lawsuit<\/a>, Caudle owns Dallin J. Caudle LLC, a medical device distributorship in Bannock County, where he and his company \u201cprovide assistance to surgeons and other medical providers, particularly providing spinal and neurosurgical products and assistants in Idaho.\u201d<\/p>\nCaudle\u2019s 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.<\/p>\n
PMC reportedly gave Caudle credentials to enter restricted areas, attend surgical procedures, and interact directly with operating room and Sterile Processing Department (SPD) personnel.<\/p>\n
The lawsuit states that in 2023, Morgan, Caudle, and other surgical staff \u201cbegan noticing serious problems with the hospital\u2019s sterilization practices,\u201d such as \u201cwhich 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.\u201d<\/p>\n
In the lawsuit, Caudle states his and Morgan\u2019s \u201clegal, professional, and moral responsibilities are directly connected to the health, safety, and welfare of people who get surgery when either of them is involved.\u201d<\/p>\n
Caudle reported, among other things, \u201cvisible residue, caked-on blood, and incomplete disassembly of medical implements, tools, and devices.\u201d The hospital\u2019s operating room management and administrative leadership, and the defendants allegedly \u201cblamed (Caudle) and others and \u201ctried to \u2018pass the buck.’\u201d<\/p>\n
After reporting the concerns, Caudle says he and Morgan began experiencing new issues at work they believe were retaliation for raising cleanliness concerns.<\/p>\n
\u201cCulture tests ordered by Dr. Morgan to assess sterility were delayed, cancelled, or blocked by hospital administration in several instances,\u201d the lawsuit says. \u201cBased on what Caudle learned, this was in retaliation for reporting the problems. This retaliation affected Dallin\u2019s work and is part of the basis for this lawsuit.\u201d<\/p>\n
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.<\/p>\n
\u201cMs. Schneider and members of the SPD staff disputed the extent of the issue and expressed clear frustration toward Dallin for raising the concerns,\u201d the lawsuit claims. \u201cAt 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\u2019s return, she complained to management that Dallin had called her \u201cincompetent.\u201d Caudle said this statement was untrue.<\/p>\n
In late spring of 2025, after a surgery involving a very \u201cyoung immuno-compromised trauma patient,\u201d Caudle reportedly discovered dried blood inside a cannulated instrument that had been certified as sterile, the lawsuit says.<\/p>\n
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\u2019s team (which included Caudle) and SPD personnel.<\/p>\n
Requests by Morgan to culture surgical trays for testing and verification purposes were \u201ccancelled\u201d or denied within the hospital\u2019s Infection Control Department, according to the lawsuit.<\/p>\n
\u201cWhen 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,\u201d the lawsuit says. \u201cThis 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.\u201d<\/p>\n
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.<\/p>\n
\u201cDefendants actually demanded that Dr. Morgan increase the number of elective surgeries he was performing, and advised Dr. Morgan that all equipment was \u2018clean,\u2019\u201d the lawsuit states. \u201cThey informed Dr. Morgan that operations should resume as normal. Dr. Morgan was threatened with an action for breach of contract if he didn\u2019t do additional elective surgeries at that time.\u201d<\/p>\n
Again, Morgan and Caudle reported issues, such as \u201cvisible contamination in multiple trays, including a Midas Rex drill and a pneumatic Kerrison,\u201d but according to the lawsuit, \u201cDr. 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).\u201d<\/p>\n
![\"Portneuf](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/02\/Portneuf-Medical.jpg\")
Portneuf Medical Center | Media Library<\/p>\n
The lawsuit says Caudle and Morgan began experiencing more \u201cintense scrutiny and unwarranted suspicion,\u201d such as staff stating they were instructed \u201cnot to communicate or cooperate with representatives, including (Caudle) and saying they were told to \u201cminimize communication with Dr. Morgan\u2019s team.\u201d<\/p>\n
Caudle was reportedly accused of being difficult to work with, being unreachable and violating vendor policies.<\/p>\n
\u201cDefendants 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,\u201d says the lawsuit. \u201cThese statements were untrue.\u201d<\/p>\n
In May 2025, Morgan and Caudle again raised concerns about the dirty tools, and according to Caudle, his credentials to the hospital were \u201csuddenly revoked\u201d without a formal explanation.<\/p>\n
\u201cAs a result, he was unable to meet sales quotas, maintain surgeon relationships, or earn commissions owed under his manufacturer agreements,\u201d the lawsuit says.<\/p>\n
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.<\/p>\n
Morgan\u2019s lawsuit <\/p>\n
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).<\/p>\n
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.<\/p>\n
The lawsuit states that in late 2019 and early 2020, Morgan began noting that some of the neurosurgical equipment was inoperable and unreliable.<\/p>\n
\u201cThese systems remained nonfunctional for nearly two years, forcing Morgan to perform complex procedures under unsafe and substandard conditions,\u201d says the lawsuit. \u201cPMC\u2019s failure to maintain this equipment violated both the express and implied duties owed to Dr. Morgan under the PSA (Professional Services Agreement).\u201d<\/p>\n
Morgan says he reported the problems, but instead of fixing the issue, the defendants \u201csought an opportunity to make more money out of the situation.\u201d<\/p>\n
According to the lawsuit, PMC entered into an \u201cearn-out\u201d 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 \u201cearn out\u201d arrangement.<\/p>\n
\u201cPMC\u2019s financial alignment with Medtronic created pressure and incentives contrary to the PSA\u2019s protections for Dr. Morgan\u2019s independent judgment,\u201d the lawsuit states. \u201cPMC knew that the arrangement with Medtronic was not in the best interests of its patients and patrons.\u201d<\/p>\n
Morgan reportedly raised his concerns with PMC leadership, but eventually agreed to use Medtronic products in appropriate cases. He reportedly refused to follow \u201cany directive requiring him to use particular devices for financial reasons over patient care and need.\u201d<\/p>\n
In 2021 and 2022, Morgan says he began noticing a \u201csharp increase in post-operative infections among neurosurgical patients.\u201d<\/p>\n
The lawsuit says he began noticing damaged instrument wrappers, punctured pan covers, and visibly unclean surgical instruments. He reported this to Passmore, who allegedly \u201cparticipated in dismissing these reports, repeatedly assuring Morgan that sterile processing had no issues despite having no legitimate basis to make such assurances.\u201d<\/p>\n
Morgan says the defendants \u201cbegan making excuses and blaming the devices Dr. Morgan was using, and members of his team, for the infections.\u201d Morgan requested an investigation of the dirty instruments, but says the hospital refused to investigate.<\/p>\n
\u201cDuring 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,\u201d Morgan claims.<\/p>\n
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 \u201cinexperienced surgical technologists.\u201d<\/p>\n
\u201cDespite PMC\u2019s 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,\u201d the lawsuit says. \u201cThis caused Dr. Morgan to question the genuineness of the hospital\u2019s report about the cause of the defects and the lack of sterilization.\u201d<\/p>\n
Morgan reportedly continued to raise concerns, but says they were downplayed, with staff reminding him \u201chis contract required that he resume elective surgeries in order to maintain revenue targets.\u201d<\/p>\n
Morgan continued to resist doing elective surgeries until the dirty surgical tool issue was corrected. He says the defendants \u201cretaliated against him by threatening a breach of contract unless he increased his elective surgeries.\u201d<\/p>\n
Throughout 2022 and 2023,\u00a0 Morgan says he continued to raise concerns about contamination trays, unexplained infections, canceled orders and unsafe staffing, but his relationship with the defendants became \u201cincreasingly adversarial.\u201d<\/p>\n
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.<\/p>\n
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.<\/p>\n
According to the lawsuit, his concerns were again dismissed, and he was threatened with being in breach of contract.<\/p>\n
\u201cDr. 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,\u201d the lawsuit says.<\/p>\n
In the following weeks, according to the lawsuit, \u201cmultiple neurosurgical patients developed severe post-operative infections caused by organisms such as MRSA, Serratia, Enterobacter, Acetobacter, and Pseudomonas.\u201d The lawsuit claims these infections were \u201cnot minor or routine surgical-site issues; they were aggressive, deep infections requiring washouts, prolonged IV antibiotics, and in some cases emergency re-operations.\u201d<\/p>\n
Morgan says the infection spanned different patients, procedures, and operative days, including harming healthy patients with no immunocompromising conditions.<\/p>\n
\u201cAs 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,\u201d the lawsuit states. \u201cDr. Passmore personally cancelled these orders on multiple occasions, knowingly obstructing efforts to identify the source of infections.\u201d<\/p>\n
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.<\/p>\n
According to the lawsuit, when Morgan brought these test results to the defendants, they \u201crefused to accept any responsibility and began to offensively attack Dr. Morgan and others.\u201d<\/p>\n
The lawsuit claims PMC\u2019s operating room director and senior administrators \u201cpublicly claimed that Dr. Morgan\u2019s personal hygiene, surgical technique, or refusal to be cultured caused the infections.\u201d<\/p>\n
In May 2025, during a \u201cminimally invasive spinal fusion\u201d performed on a pediatric trauma patient, Morgan and Caudle reportedly observed surgical instruments labeled \u201csterile\u201d 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.<\/p>\n
Shortly after, the trauma director allegedly instructed Morgan not to inform affected patients, \u201casserting that patient disclosure was the hospital\u2019s responsibility. Morgan claims he later learned some patients were never notified. He then contacted at least one of those patients.<\/p>\n
In June, the Joint Commission of the U.S. Health and Human Services Department conducted an unannounced inspection of PMC\u2019s operating-room and sterile-processing facilities, finding \u201cserious deficiencies\u201d in sterilization procedures, record keeping and staff competency. <\/p>\n
On July 3, Morgan voluntarily withdrew his surgical privileges at PMC.<\/p>\n
Around July 8, Delarosa, the surgeon, reportedly held a meeting with a physician\u2019s assistant who had submitted a complaint on the staff website about Morgan\u2019s resignation and the dirty surgical tools.<\/p>\n
The PA reportedly believed the complaint was anonymous, but according to the lawsuit, Delarosa told him he had seen it and \u201cNate Carter sees every complaint.\u201d<\/p>\n
Delarosa reportedly told the PA that everything the PA heard from Dr. Morgan about contract delays and negotiations was \u201cwrong,\u201d and insisted there had been no ongoing contract negotiations and \u201ceverything was just fine\u201d with Morgan\u2019s contract.<\/p>\n
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 \u201cweren\u2019t a thing\u201d and then claiming he was not aware of them.<\/p>\n
Delarosa reportedly told the PA that Morgan was \u201crisky\u201d and \u201ca little crazy about the infections.\u201d<\/p>\n
At the end of the meeting, Delarosa allegedly told the PA that Carter would review the complaint and \u201csee what he needs to have done,\u201d which the PA reportedly interpreted as an implied threat to his job if he continued to support Morgan or questioned the hospital\u2019s intentions.<\/p>\n
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.<\/p>\n
According to court filings, all defendants in both cases were served with a summons between Jan. 22 and 28.<\/p>\n
Further hearings have not been scheduled.<\/p>\n
\t \t \t \t=htmlentities(get_the_title())?>%0D%0A%0D%0A=get_permalink()?>%0D%0A%0D%0A=htmlentities(‘For more stories like this one, be sure to visit https:\/\/www.eastidahonews.com\/ for all of the latest news, community events and more.’)?>&subject=Check%20out%20this%20story%20from%20EastIdahoNews” class=”fa-stack jDialog”> \t <\/p>\n","protected":false},"excerpt":{"rendered":"POCATELLO \u2014 A local neurosurgeon and a medical device distributor have fired back at Portneuf Medical Center, claiming…\n","protected":false},"author":2,"featured_media":445520,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[97,252,253],"class_list":["post-445519","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-health","tag-health-care","tag-healthcare"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/445519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=445519"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/445519\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/445520"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=445519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=445519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=445519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Portneuf](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/02\/portneuf-medical-center.jpg\")
Portneuf Medical Center | EastIdahoNews.com<\/p>\n![\"CEO](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/02\/Carteredit.jpg\")
CEO of Portneuf Medical Center, Nate Carter. | Portneuf Medical Center <\/p>\n