Ridiculous as it sounds so far, there is apparently a bit more to the story, at least according to the court papers: there was some indication by other students that the teacher was himself involved in the dare, offering the boy a Mountain Dew. The student claimed that it was not the teacher, but a classmate who made the dare and offered the soda. There were also allegations that the teacher had previously told students that the electrical circuits used in the class were unable to cause harmful or fatal shocks.
Not saying that the teacher did it, but I can completely imagine a teacher telling an 18-year-old, "go ahead, moron, attach the alligator clips to your nipples and see what happens; I'll buy you a Coke if you survive." Unfortunately, I can also completely imagine the 18-year-old calling the teacher's bluff.
The teacher has resigned. Odds are the District will settle.
The moral of the story:
(1) Louie the Lightening Bug was right.
(2) School administrators: some kids are dumb, and some parents are litigious. Be prepared.
(3) I say this as a former high-school teacher: teachers probably need to be a bit more cognizant that it's all too easy for students or parents to turn a teacher's stray words, or harmless jokes, into fodder for a lawsuit.