Editor's note: This story was updated on Sept. 2 with a comment from Laurel Lower School Principal Linda Creighton==

Laurel School staff filed an appeal to a 2021 lawsuit that alleged that the school's parent teacher organization (PTO) and principal used illegal means to boost its fundraising.

Parent Jaclyn Foroughi filed the suit in March 2021, claiming that when she raised her concerns, the PTO and principal of the school, which has campuses in Menlo Park and Atherton, retaliated against her and her family.

Principal Linda Creighton filed for an appeal of the case in the First District Court of Appeal in San Francisco on July 26.

In late May, San Mateo County Superior Court Judge Nancy L. Fineman dismissed some of Foroughi's claims based on an Anti-Strategic Lawsuits Against Public Participation (SLAPP) motion. SLAPP suits are intended to silence free speech through "expensive, baseless legal proceedings," according to the Reporters Committee for Freedom of the Press.

However, the judge ruled that alleged quid pro quo payments could jeopardize the PTO's tax-exempt status. The district argued that the anti-SLAPP motion exempted it from that claim.

Foroughi's complaint alleges that while serving for four months as financial secretary for the nonprofit volunteer-led Laurel PTO starting in August 2019, she discovered parents paid field trip fees as "donations," or through quid pro quo payments, to the school so that their employers could match the funds.

These fees should have been ineligible for corporate matching funds since they were not actually donations — paying for a field trip does not meet the IRS definition because the donor receives a tangible benefit — like a field trip to Outdoor Ed camp, according to the suit.

A quid pro quo contribution is a payment made to a charity partly as a donation and partly for goods or services, according to the IRS. For example, if a donor gives a charity $100 and receives a concert ticket worth $40, the $40 value of the ticket is not tax-deductible.

Judge Fineman agreed with school officials that they didn't breach their fiduciary duties by "bullying" and/or "intimidating" Foroughi and other PTO members and for failing to investigate those claims, according to the May 27 order.

"The district unequivocally supports Laurel's principal, Linda Creighton, and Laurel’s volunteer parent leaders," said Menlo Park City School District (MPCSD) spokesperson Parke Treadway in an email. "MPCSD believes that the claims being made by a former Laurel parent in this suit are not supported by the evidence. The legal system exists to resolve disputes and to add reasonability when emotions are high. We trust the legal system to do what it is designed to do — to recognize which controversies are valid and which are not."

Creighton said in an email that she's "overall quite disappointed that time, energy and resources are being spent on alleged issues that were resolved before the lawsuit was even filed, as well as allegations that were already dismissed because of anti-SLAPP law."

In a June 2021 filing, Creighton explained that subcommittees were formed to review the matching in December 2019 and January 2020. A tax attorney was also consulted, she said.

"Ultimately, the investigation showed that over a two-year period, approximately seven families were involved in the corporate matching and that $9,404.12 was collected through this practice," she said. "The Laurel School PTO returned all the monies to the families and corporations that made these payments, often over the donor’s protest as many of them did not want to accept the refunds or wanted the PTO to keep the funds as a donation. Despite those protestations, the funds were returned, and the practice was discontinued."

Foroughi is the mother of five children, three of whom have attended Laurel School, and is a lecturer at Stanford's Graduate School of Business.

"When I raised these inappropriate financial practices and attempted to reform them, I was retaliated against and ostracized and that, in my view, was part of an effort to cover up the wrongdoing," said Foroughi in an email. "I believe the appeal is a delay tactic to avoid the investigations that should have been conducted properly, and I believe the appeals court will deny the defendants' appeal."

She said it was "unfortunate" that a settlement could not be reached to have an independent investigation conducted, adding that she repeatedly offered to pay for the investigation.