The second-largest public school district in the United States, LAUSD, is facing various active legal actions and investigations in early 2026, including a search of Superintendent Carvalho’s home over a failed AI chatbot contract, and more.
These cases touch on many different problems, ranging from claims of unfair policies to questions about how money gets spent and even federal probes into possible wrongdoing.
One of the newest and most talked-about developments involves the superintendent himself.
On February 25, 2026, FBI agents carried out search warrants at LAUSD’s superintendent Alberto Carvalho’s home in San Pedro, at the district’s main office downtown, and at a property in Florida connected to people tied to a past tech deal.
Sources say the investigation centers on a now failed artificial intelligence company called AllHere, which created a chatbot called Ed for the district.
Carvalho promoted the tool in 2024 as a helpful advance for schools, but the company ran into serious trouble.
Its founder, Joanna Smith Griffin, faced arrest that same year on charges including securities fraud, wire fraud, and identity theft for allegedly misleading investors. The chatbot got taken offline before those charges surfaced.
The Florida home belongs to Debra Kerr, who worked as a consultant for AllHere and claims the company owes her more than $600,000 for helping arrange the Los Angeles contract. Her son also worked there and helped introduce the idea to district leaders.
Government officials confirm the searches happened, but keep details sealed so the exact reasons remain unclear for now. Meanwhile, the district says it is cooperating fully.
Similarly, another major case started in January 2026 when a group called the 1776 Project Foundation sued the district.
They argue that an old program known as PHBAO, which stands for predominantly Hispanic Black Asian and other non-Anglo, gives extra resources to schools with mostly students of color and ends up discriminating against white students.
The program dates back to efforts to fix segregation issues from decades ago, but the lawsuit says it now creates unfair disadvantages.
The Justice Department’s Civil Rights Division has asked to join the case on the side of the plaintiffs, which adds weight to the argument.
Going back a bit further, a lawsuit from 2025 claims the district misused around $80 million that voters approved through Proposition 28 for arts and music education.
People behind the measure, including its author, say the money didn’t go toward hiring more teachers or growing programs as promised and instead helped cover other budget shortfalls.
The district also continues to deal with settlements related to past sexual misconduct by employees.
It recently borrowed another $250 million in bonds on top of $500 million from before to cover claims after a new state law gave victims more time to file lawsuits about childhood abuse.
In September 2025, LAUSD settled with parents who said remote learning during the COVID pandemic didn’t meet state requirements and hurt Black and Latino students the most.
As part of the agreement, the district must offer extra tutoring and academic help to more than one hundred thousand students.
All these matters show how complicated running such a large school system can be, with hundreds of thousands of students, a massive budget, and constant pressure to serve everyone fairly.
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