How can they claim that they did not know it would violate the morality clause, and then claim damages for her being "outed"?
She outed herself when she swapped spit with another girl. Its pretty plain that the sleepover had some straight girls there that went back to school and told their classmates she was a dyke. The word got back to the school authorities and they expelled her for violating Christian Doctrine.
The parents evidently have accepted that their daughter is queer and figure to make a buck off the school. I bet the parents voted for John F'in Kerry.