Owasso Independent School District v. Falvo is a Supreme Court case where the US Supreme Court, and specifically Anthony Kennedy, said that it was okay to put a gold star on homework. Well, not exactly, more precisely that a teacher could put a gold star, or even a smiley face, on homework while other students watched.
In the United States, there is a law called the Family Educational Records Protection Act, or FERPA. If you are familiar with the Health Insurance Portability and Accountability Act, or HIPAA, FERPA is much the same, only pertaining to education, instead of health care. FERPA is actually 22 years older, being passed in 1974 instead of 1996. FERPA basically says that any educational institution, from elementary school to graduate school, that receives federal funding, has to keep student records confidential.
In the year 2000, a woman who was a parent of three children at a school district in Oklahoma sued the school district, saying the procedure of peer grading violated the act. Peer grading was when students exchanged worksheets, graded each other's work, and called out grades to the teacher. The parent, Kristja Falvo, said that this invaded the privacy of the children and violated FERPA, because, by having their grades announced in a way that the entire classroom could hear, the records of the students were being released beyond their intended custody. And the court system agreed, all the way up until the case went to the Supreme Court. After consideration, the Supreme Court unanimously reversed that ruling, saying that peer grade checking did not constitute an "educational record", and was not covered by FERPA.
Their reasoning, delivered in an opinion by Anthony Kennedy, covered two main lines of reasoning, one practical, one theoretical. The practical reason was, as Kennedy phrased it, that teachers would naturally be interacting with their students in a shared social environment, and that it would be impossible to have normal classroom activities such as group projects, if the law was interpreted that way. Kennedy said that it would mean that "if a teacher...puts a happy face, a gold star or a disapproving remark on a classroom assignment, federal law does not allow other students to see it." This practical reasoning was related to legal theory by pointing out that this micromanagement would "effect such a substantial change in the balance of federalism" that it would go beyond the intent of the law. A federal law about records keeping was not meant to micromanage the normal practices of teachers in classrooms.
I am not a lawyer, but I am a teacher. And I can say this: Education is a process. And education is a social process. Education involves interaction, a guiding and correcting of concepts in real time. It is impossible to have education without this process, and the view that all educational interactions are part of a "record" is untenable. Followed to its logical end, a referee's whistle on the playground, or a teacher correcting a misspelled word, or even a teacher asking a student's favorite color---all of these could be seen as "educational records" in the most zealous reading of the law, and the Supreme Court's unanimous decision made a clear distinction that only special parts of educational interaction can be claimed as "educational records". The Supreme Court made an obviously correct judgement in this case.