What exactly is the "child find" requirement? Under federal law, in order for a state to be eligible for funding from the federal government it must have in place policies and procedures to ensure that the state meets certain conditions vis-a-vis kids with special needs. One of those conditions is that a state has to identify, locate, and evaluate children who are suspected of having disabilities and who may need special education and related services but have not yet been found to be eligible. This child find requirement is an affirmative one: a parent is not required to request an evaluation and it is the school district's responsibility to initiate the process when there is reason to suspect that there is a disability requiring special education/services. The school district must then refer the child to the local committee on special education to better assess the child's specific needs. A school district will be liable when there were clear signs of disability and it failed to act.
In one particular case, Compton Unified School District v. Addison (9th Cir.), the facts are shocking. The student performed very poorly in the 9th grade and demonstrated abilities of a fourth-grade academic level. The school chalked this up to "transitional year" difficulties common to all students and promoted her to the 10th grade. In the 10th grade she failed every academic subject and demonstrated signs of serious school distress such as refusing to enter the classroom and urinating on herself while in school. A mental health expert recommended to the school that the child be evaluated for learning disabilities but the school did not initiate that process and instead promoted her to the 11th grade. Finally, halfway through the 11th grade, the girl was evaluated and found eligible for special education services. A lawsuit was commenced for compensatory education to make up for all those years. The school district attempted several arguments that the law should not apply to them here but the court summarily struck them down as absurd (and rightfully so - the district's logic was ridiculous). The court agreed with the lower courts' decisions and concluded that the district violated its child find obligations by failing to take action in light of clear signs that the child might have a disability.
P.S. The school district has refused to quit. Uunsatisfied with the ruling from the 9th Circuit, it has petitioned the U.S. Supreme Court for the case to be heard yet again. It is unclear whether the Supreme Court will be accepting the case.