Ok, I have a problem with this for a couple of reasons:
1. Is "That's so gay" really the wittiest retort this girl could come up with? She's making the rest of us look bad.
2. Keeping in mind the fact that I love, love, love the gays: you could argue that this dumb girl had no true idea what she was saying. I hear "That's retarded" all the time, and people look shocked when I'm call them on it.
3. How many of the kids who were teasing this girl about being Mormon got a disciplinary note in their file? HMMMMM?!?!?!?
4. Why are her parents asking for "damages?" Just sue for the note to be removed and be done. Don't try to make a dime off this.