It's actually a good educating time for both of

daughter and you. If I were you, I would discuss the entire case with my daughter, telling her that 100% fairness is not existing. We all need to learn how to protect ourselves and not hurt others. We all need to learn how to stand up for ourselves, and when to let it go as we all have other more important things to do. The tricky part is when(what is good timing) to let it go and move on. If you have the confidence that they will drop the charge at the end of the semester and you are busy working mom, you may let it go. Otherwise, you seem to have new supporting evidence now (the curse over the facebook), you may want to continue. Work with other parents, the more people be involved, the more power you get...

I am not so sure about the law suit though, it sounds very costly. The old cat's comment, for sure, is valuable here.