A hospital is being sued for throwing out a stillborn baby boy with the laundry in 2013 and failing to contact the boy's family after his remains were found. The hospital is also believed to have thrown out another stillborn baby in the same way.

Esmeralda Hernandez, who now lives in Texas, gave birth to a premature, stillborn baby boy she named Jose at Regions Hospital in St Paul, Minnesota on 3 April 2013.

Hospital staff offered to arrange the cremation of the baby's remains in a "respectful and dignified manner," a lawyer for the Hernandez family said. They agreed.

Two weeks later, the family heard a report on the news that the remains of a baby who had been born at Regions, had been found in the dirty linen at Crothall Laundry Service, Inc in the town of Red Wing.

The baby, in a diaper and hospital identification bracelets, tumbled out of the linen and landed on a metal grate in front of the business's staff, the Chicago Tribune reported.

The boy's body was wrapped in linen and placed on a shelf in the morgue, Regions Hospital representatives told reporters and were mistaken for dirty linen by a hospital employee.

In a statement released in 2013, the hospital called the case "an unfortunate event involving the handling of remains".

The hospital did not realise the boy's remains were missing until the facility contacted Regions staff.

According to the family's lawsuit: "laundry workers gawked at Baby Jose, took photos of him, and sent out pictures of him into cyberspace."

Hernandez and nine of her relatives are suing the hospital for damages in excess of $50,000 for past and future mental pain and suffering.

An autopsy found that he suffered a subdural hematoma and "moderate" decomposition," according to the Star Tribune.

"We want to say again that we are truly sorry for our mistake," Ashley Burt, the communications director for HealthPartners, said in a written statement.

"We immediately reached out to the family in 2013 to apologise and to try to help ease their loss. We have continued to work with their lawyer—always open to a reasonable resolution.

"We also took immediate steps to ensure that this would not happen again....We continue to review these processes on an ongoing basis."

Court records revealed that a 14-year-old girl had been sexually assaulted and given birth to another baby at Regions Hospital in April 2013 who had also been sent out with the laundry although its remains were never found.