The lawsuit claims that Jessica Turner, 12, suffered psychological distress after viewing the movie in her 8th grade class at Ashburn Community Elementary School last year.
The film, which won three Oscars, depicts two cowboys who conceal their homosexual affair.
Turner and her grandparents, Kenneth and LaVerne Richardson, are seeking around $500,000 in damages.
"It is very important to me that my children not be exposed to this," said Kenneth Richardson, Turner's guardian. "The teacher knew she was not supposed to do this."
According to the lawsuit filed Friday in Cook County Circuit Court, the video was shown without permission from the students' parents and guardians.
In 2005, Richardson complained to school administrators about reading material that he said included curse words.These folks have already apparently demanded the banning of other material from the school, probably the usual banned book hit parade. I'm not condoning what the school allowed to happen because I think that parental approval should have been obtained before a film of this nature was shown to the students. I do think, however, that these grandparents were probably eagerly looking for their next complaint and that they are trying to parlay this one into a money grab, to boot.
"This was the last straw," he said. "I feel the lawsuit was necessary because of the warning I had already given them on the literature they were giving out to children to read. I told them it was against our faith."