Nikki Brar, who was designated male at birth, was a student at Heritage Oak Private Education in Yorba Linda. The lawsuit alleges that the school violated the Unruh Civil Rights Act, which outlaws discrimination based on sex or sexual orientation, the Los Angeles Times reported on Monday.
The school didn't allow Nikki Brar to wear the school's girls' uniform, use the girls' bathroom, or be called a "she". It said that the move would "create an imbalance in our environment", the report said.
The lawsuit alleged that Nikki Brar experienced social isolation. The girls would not play with her because she had to dress like a boy, and she found the boys' games too rough. Boys would bully the youngster, calling her "a loser", it said. Nikki left the school in February 2017.
The suit is noteworthy because it is "the first (transgender rights) case to use a state anti-discrimination law as one of the grounds for relief," said Mark Rosenbaum, Director of the pro bono Public Counsel Opportunity Under Law.
"In light of the Trump administration's inaction on taking a stand against discrimination against trans individuals... this is a terribly important case," he told the the Los Angeles Times.
Nikki Brar's parents filed the suit against the school, its Executive Director Phyllis Cygan and the school's parent group, Nobel Learning Communities. They seek damages for "emotional distress and discrimination" as well as more than $10,000 for school tuition and fees.
The child's mother, Priya Shah, said the family thought long and hard before filing the lawsuit. "It honours our child's commitment to being who she is despite adversity," she said.
"It is our small contribution towards ensuring that other transgender and gender expansive children do not go through the same hardship and trauma."
The school's parent group Nobel Learning Communities released a statement following the lawsuit, saying: "We believed it was extremely important to respond... to decide when and how to inform and educate our entire elementary school community... about the mid-year change of gender identity expression of a young child... Unfortunately, these accommodations were rejected and the parents withdrew their child."
Nikki Brar is expected to join a public school in Orange County later this year, the report said.