You're right that AA made a big mistake in letting your son on the plane without a passport- I find that surprising but, as you noted, they're getting hit with a fine for that. This is not "being sued for a security breach" but being fined for transporting someone to a country without proper documentation to get into that country.

But, next time you travel to "an international country", check with the consulate- or check here! The people on this Board are usually more knowledgable than your random airline employee, anyway.