Lonestar:
In your case, the claims being made by the owners of the complex were bogus; a lawsuit (or threatened lawsuit) is the sensible and obvious recourse to such a wrong. In this case, however, we have a case of admitted wrongdoing and a prior
clear statement of policy pertaining to how such cases are to be dealt with internally (i.e., failing the class and having to take it over). It is silly to sue for "bad consequences" in any situation unless those consequences were not explicitly stated or were otherwise unforeseen; only a lawyer would argue otherwise. (Un)Fortunately, we have one on the board.
In your case, the owners of the complex had no case against your friend, and the threat of a lawsuit bore that
fact out. But what are the facts we have in front of us in this case? A person who willfully cheated got caught and has to suffer the stated consequences for his actions. Does it suck for him that he'll have to take it over again over the summer? Yes. Will I lose sleep over it? No. Reasonable, sane people accept the consequences of their actions so long as they were reasonably foreseen (which this was-- unless he thought that there'd be no penalty for cheating). Only insensible people and those that encourage and abet them (see: lawyers) attempt to circumvent the proper and established penalties for illegal and improper actions. In doing so, and in trying to foster such a litigious mentality in the thread-starter's mind in order to further his profession's ends, Tortfeasor is an example of everything that is wrong with the American legal system. Period. Legal bullying-- which is all a "threatened" suit in such a situation would amount to, seeing as it has no substance-- is totally wrong and should not be countenanced.
And if Tortfeasor doesn't care for that assessment (which is entirely accurate, if admittedly rude), then he would do well to take a look at the type of mentality that he is promoting and its effect on society. To merely say, "oh, but it would help the thread starter!" is myopic, and a true student of jurisprudence-- one who was unconcerned with "getting his", that is-- would undoubtedly realize that. Even in this thread, we have a good (i.e., moral; having scruples) law student (bionic77, who made no mention of legal recourse), and a "bad" (i.e., immoral; unscrupulous) student of law (Tortfeasor, with his incitement to sue or threaten to do so, thus lining the pockets of his colleagues and ensuring that the status of accountability in our society is further eroded).
There is, unfortunately, little truth and light in "law" (our current implementation of it, at least), and we have before us a clear example of that. I hold sensible attorneys in high esteem, as they provide an essential service and a check on governmental, institutional, and corporate excess. I hold senseless ones, as seen here, in great disdain, as they are responsible for much unnecessary trouble. They promote the total disavowal of personal responsibility; I've never cheated on an exam in my life-- the times when I didn't prepare, I accepted the inevitable bad grade-- but if I ever did, and subsequently got caught, I'd take my lumps like a man no matter the consequences, unless those consequences were not explicitly stated or were grossly disproportionate (if they wanted to whip me for cheating, say

).
It's just an indefensible mentality, and any person who values sanity and truth and accountability would not tolerate it, much less try to further it.