Daughter was called a whore for sticking up for a friend called spick and another called nigger. There was more, but those are the three words I am going to shove down the administration's throat. Ultimately, I don't care what words are used for bullying. But those are the ones that the school most fears.
Talk to the parents, but let the school handle the punishment. Don't go to jail or get sued - their parents are probably the type that are looking for a meal ticket. Make sure your daughter learns a positive lesson from all of it.