Mr. Garrison introduces the class to Peetie the Sexual Harassment Panda, who teaches the class about sexual harassment. Upon learning that name calling is sexual harassment, Cartman sues Stan with the help of Gerald Broflovski after Stan called him an ass-sucker.
Soon everyone begins to sue everyone for the smallest reasons. The school begins to lose money from cases and have to sacrifice important luxuries such as furniture, chalkboards and Sexual Harassment Panda. Mr. Garrison loses all his chalk so he is forced to write on the chalk board with a rusty old nail.
Without work, Sexual Harassment Panda goes to the Island of Misfit Mascots where unfit mascots go to live. Kyle questions his dad, Gerald on the money he has made and how greedy he has become after he turns his house into a mansion. Soon, everyone decides to sue everyone; Gerald becomes incredibly rich and the school loses $32 million.
The boys realize the problem and must stop the case. They go to Sexual Harassment Panda and convince him to change his message. While there, they discover all sorts of ridiculous mascots (who actually believe they really are the mascots their dressed as) such as Jimmy the Don't Hold Onto a Large Magnet While Someone Else Uses a Fan Nearby Falcon who demonstrates his role by giving Kenny a large maget and switching on a large fan which kills Kenny in the process.
Afterwards, Peetie tells everyone that there is no such thing as free money as it has to be taken from places that need it like the school. Everyone (including Gerald after everyone threatens to sue him) learns the errors of their ways and drop the case.