WASHINGTON (UPI) — The U.S. Department of Justice on Monday fought back against the state of North Carolina — which had until day’s end to abandon its controversial bathroom bill, but brought a lawsuit against the federal government instead.

North Carolina Gov. Pat McCrory filed the suit against the Justice Department for a letter last week that ordered the state to effectively junk House Bill 2 — which mandates transgender state employees to use restrooms for the sex they had at birth, not the gender they identify with.

McCrory and North Carolina Public Safety Secretary Frank Perry sought “declaratory and injunctive relief” from the Justice Department, U.S. Attorney General Loretta E. Lynch and the department’s civil rights attorney, Vanita Gupta.

At a news conference Monday afternoon, Lynch and Gupta said their counter-suit is a “significant law enforcement action.”

“The legislature and the governor have placed North Carolina in direct opposition to federal laws. … They created state-sponsored discrimination,” Lynch said. “Instead of replying to our offer, North Carolina and the governor chose to respond by suing the Department of Justice.”

Lynch noted that North Carolina officials had requested an extension to comply with Justice officials’ demands, which the government was considering, before the state decided on a lawsuit.

“As the result of their decision, we are filing a federal civil rights lawsuit against the state of North Carolina, Gov. McCrory, the North Carolina Dept. of Public Safety and the University of North Carolina,” she said. “State-sanctioned discrimination never works and never looks good.”

The attorney general also said that the state’s decision to fight for H.B. 2 could ultimately cost them untold millions in federal funding.

“We retain the option of curtailing federal funding to the N.C. Dept. of Public Safety and University of North Carolina,” she said, noting that the Justice Department will wait to see how the case proceeds before deciding on such fiscal action.

The department’s lawsuit accuses North Carolina of violating multiple provisions of federal law — Title VII of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, and the Violence Against Women Act of 1994.

“It is fitting that these statutes that emerged from our nation’s long struggle to banish a legacy of legal discrimination are now being used to defend, to uphold, and affirm the progress that resulted from that struggle,” Gupta said. “It is discrimination, plain and simple. Bills like H.B. 2 misinterpret or make up facts about gender identity.”

Lynch further criticized H.B. 2 by comparing it to racial segregation in the past, facilitated by the Jim Crow laws.

“This law provides no benefit to society. All it does is harm innocent Americans,” she said. “Instead of turning away from our neighbors, friends and colleagues, let us instead learn from our history and avoid repeating the mistakes of our past.”

In the state’s suit, McCrory and Perry criticized the government for “radical reinterpretation of Title VII of the Civil Rights Act of 1964, which would prevent plaintiffs from protecting the bodily privacy rights of state employees while accommodating the needs of transgender state employees.”

“The department’s position is a baseless and blatant overreach,” it states further. “The overwhelming weight of legal authority recognizes that transgender status is not a protected class under Title VII.”

Last week, though, the Justice Department in its letter refuted that assertion — saying that gender identity has been affirmed and reaffirmed by courts as a protected part of federal law.

In addition to possibly losing federal money, North Carolina could also lose even more in private revenues due to widespread opposition to the law.

Lynch noted Monday that her department was considering North Carolina’s request for an extension, but McCrory said over the weekend that Justice officials had already denied the request. He also claimed that a condition for an extension was for him to publicly admit that H.B. 2 is discriminatory.

“They said no, unless we will give you a one-week extension if the governor admits publicly that the ruling that their language regarding bathrooms does, in fact, discriminate,” he said. “Well, I’m not going to publicly announce that something discriminates.”

McCrory also said he feels the Justice Department is trying to bully his state into trashing H.B. 2.

“I think the people who feel bullied are the transgender individuals in the state of North Carolina who live beside their neighbors without any problems and have done so for years, and are now being singled out on something they have no control over, and is an essential part of who they are,” Lynch replied.

McCrory, Perry vs. United States of America by United Press International

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