Updated

This is a RUSH transcript from "The O'Reilly Factor," February 16, 2012. This copy may not be in its final form and may be updated.

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O'REILLY: Thanks for staying with us. I'm Bill O'Reilly.

In the "Kelly File" segment tonight, all over the country school authorities are having to deal with students selling and using drugs on campus.

When I was a high school teacher in Miami I had the same problem. Kids coming into class stoned and selling drugs in the hallways.

On Monday, the North Carolina Supreme Court began to hear a case of a 15-year-old girl who school authorities suspected her of carrying drugs. They searched her, including lifting up her bra, and they did find narcotics.

In defense, the student's lawyer tried to get the search thrown out. With us now, attorney and FOX News anchor Megyn Kelly, who picks up the story from there.

So it got to the highest level of North Carolina, obviously.

MEGYN KELLY, FOX NEWS ANCHOR: Yes.

O'REILLY: What is the crux of the matter here?

KELLY: They have to determine whether the search was reasonable under the circumstances. And this is all in the wake of a Supreme Court -- U.S. Supreme Court decision back in 2009 that looked at whether the, quote, "strip search," same sort of thing, pulling the bra out -- by the way it was the girl, the student was asked to pull the bra out, not the teachers manhandling her.

O'REILLY: Right.

KELLY: In the Supreme Court case, 13-year-old girl had to do that, and it was over ibuprofen. The Supreme Court said that search was not OK. You can't do that to a 13-year-old girl over ibuprofen.

Now, this is a different situation, because it's a 15-year-old girl. It's an alternative school for kids with disciplinary problems, and in fact, they did find drugs on this girl. But that's irrelevant to determining...

O'REILLY: What kind of drugs?

KELLY: ... whether they had the grounds in the first place. It was -- it was demeanor drugs. I can't remember. Prescription pills. That's what they were.

O'REILLY: So they found pills on the girl.

KELLY: Yes.

O'REILLY: And the court now has to decide whether the authorities went too far...

KELLY: Yes.

O'REILLY: ... in asking the girl to lift the bra up?

KELLY: Yes. Did they have the right to do it? Because here's the problem. In this case...

O'REILLY: Yes.

KELLY: ... they did it to all the students. They had reason to believe the kids were bring prescription pills into this school which has troubled youths in it. And so they made all the students go through this. And that's -- that's a problem. You need to have more -- usually more particularized grounds for doing this to a student.

O'REILLY: So you think the girl's conviction is going to get tossed?

KELLY: I think -- yes, I think it is. Irrespective of the fact that they did find the drugs on her.

O'REILLY: Now, in Georgia, there's another -- there's a male student filed a federal law suit against Clayton County School District, because he was forced to strip. They did a strip search on him.

KELLY: Down to his underwear in front of three other students. This one is going to go, too. Get thrown out, I think.

O'REILLY: But he wants money. This kid.

KELLY: Yes. Of course.

O'REILLY: Right.

KELLY: But I think, you know, he's got a legitimate point. Because once again, the Supreme Court has basically set the standard pretty high for school administrators to prove they have the grounds to do. What do they have to go after this Georgia kid? A seventh grader made to pull down his pants in front of his classmates.

O'REILLY: Somebody said he had pot on him.

KELLY: Somebody said, right. One of the other kids, one of the other accused.

O'REILLY: So they had no -- right.

KELLY: Before they got to the strip search. Because they searched his bag and they searched his backpack.

O'REILLY: Yes, they didn't find any pot.

KELLY: They didn't find anything. And then the other kid who accused him of having it recanted. And then they forced him to pull down his pants, a seventh grader. That is traumatizing.

O'REILLY: Yes. Well, I'm not arguing that. If you're a school authority person, you've got to be very, very careful. And you're going to have -- just like the law enforcement people, you have to have reasonable cause.

KELLY: That's right. And you have to -- and if you're going to do it, you've got to be particular suspicion. You have to do it in a way that really respects the student's dignity as much as you can.

O'REILLY: And they should.

All right. New York City Occupy protesters, you know the game. I mean, they got pepper-sprayed, some of them. Let's roll the tape on that.

Now two of the girls who got pepper-sprayed, 24-year-old Jeanne Mansfield of Boston and Chelsea Elliott of Brooklyn, they're suing the cops for all kinds of stuff.

KELLY: Assault, battery.

O'REILLY: They don't like pepper. They like salt better.

KELLY: They're not sure if it was pepper spray or mace.

O'REILLY: Physical pain, mental suffering. All of that stuff.

KELLY: Yes.

O'REILLY: Now, did they break the law? If they were arrested and convicted, I think that makes it harder for them to sue. Correct?

KELLY: Not necessarily. They're going after this one -- it's about this one -- I don't know if you can show that video again. But it's about this one guy who's in the white shirt who's coming over and basically just looks like out of nowhere, just pulls out the pepper spray and shoots it at them.

Look at the top right of your screen, sort of, you know, 1 o'clock on your screen. You see him come up. And you see this guy who's not really even dealing with him. It's not one of the guys in the blue shirts. A guy in the white shirt comes over and just opens up the gun. It happened before this. You can see it online. And opens fire on these girls with the mace or the pepper spray, whatever it is.

That is not justified. The NYPD has already disciplined that officer. That's not OK. I think the lawsuit against that guy is going to prevail for battery. Not against the NYPD, though.

O'REILLY: If the girls were arrested, if they broke the law. And it's a much different thing, rather than if they weren't doing anything.

KELLY: No. I disagree.

O'REILLY: No?

KELLY: It is a clear case, this cop is in trouble.

O'REILLY: OK. Indian Sioux tribe in South Dakota says no booze on the reservation. All right? Very strict. But, of course, booze gets on the reservation.

KELLY: Right.

O'REILLY: Big alcohol is a problem. So now the reservation is suing Anheuser Busch, Coors, Miller Coors, Pabst Brewing.

KELLY: Right.

O'REILLY: Five hundred million they want, the Indians.

KELLY: And they're suing the distributor, the importer where the people bought the beer.

O'REILLY: But -- but the -- this is smuggled onto the reservation.

KELLY: Right. You can't have it on the reservation in South Dakota. But they're going across the border and in Nebraska, and they're buying it at this place called -- in White Plain, Nebraska, in this one, you know, store basically.

But this town of White Plain, Nebraska, has a population of 12 people and no publicly accessible place to lawfully consume alcohol. But every day, the four retailers in the town sell more than 13,000 cans of beer.

O'REILLY: Because the people from the reservation are coming and buying it and bringing it back.

KELLY: So let me tell you this.

O'REILLY: How you can hold Anheuser Busch and Molson responsible for that?

KELLY: You can't.

O'REILLY: You can't?

KELLY: But the argument is that they know and that these retailers know where the beer is going.

O'REILLY: Retailer, you might be able to. But the guys down in Denver, you can't sue them.

KELLY: Let me just say, I don't like the lawsuit. I don't think it's got any chance of prevailing. But let me tell the viewers what the deal is.

The average life expectancy on this reservation is between 42 and 52.

O'REILLY: Sure.

KELLY: Alcohol-related, second lowest in North America, behind Haiti. This is on U.S. territory. Well, you know, in the United States.

Unemployment rate over 80 percent. Teen suicide, 150 percent higher than the rest of the U.S. Infant mortality, 300 percent higher than the rest of the U.S. That's why they're so concerned.

O'REILLY: Everybody -- everybody should know what a terrible problem. But the media should do more. And this ties into what we were saying at the top of the program. The media's responsibility to talk about this stuff.

KELLY: I'll tell you one thing. One thing before you let me go.

O'REILLY: Real quick.

KELLY: This is how my mom kept me off drugs. She said, "If I find any drugs, any drugs whatsoever in your room, on your person at any time, you're going into a 30-day inpatient treatment program immediately."

I never even tried the stuff.

O'REILLY: That would kind of de-socialize Kelly, so she stayed straight.

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