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Scalpel appears in the Nemesis mission "the Violent Majority" as part of the cast of minor villains taking advantage of the Nemesis' rampage to cause havoc in City Hall.
Scalpel can be found in Mayor Biselle's office looking over a computer in which he sees the Mayor's reports - praising the heroes of the city but describing Scalpel as a "sadistic psychopath" In a computer entry.
This accusation angered Scalpel, who believed the Mayor had the wrong idea about him - thus he announced that he was going to "butcher and bleed" the Mayor for the insult before becoming aware of the hero's presence.
Upon seeing the hero Scalpel decides to kill them as well but is easily defeated and presumably locked up either in a superhuman jail such as Stronghold or sent to a psychiatric ward.