Deputy Assistant Attorney General Vanita Gupta and Attorney General Loretta Lynch announce a lawsuit against North Carolina on May 9.Joshua Roberts / Reuters

The Department of Justice has sued the state of North Carolina over HB2, the controversial “bathroom bill” enacted in March.

In impassioned remarks Monday afternoon, Attorney General Loretta Lynch blasted the law as “state-sponsored discrimination,” compared the law to segregation provisions of yore, and spoke directly to transgender people from a lectern at the Justice Department.

“This action is about a great deal more than bathrooms. This is about the dignity and the respect that we accord our fellow citizens,” she said. “It’s about the founding ideals that have led this country, haltingly but inexorably, in the direction of fairness, inclusion, and equality for all Americans.”

Lynch, who is a North Carolina native, placed HB2 on a continuum with state reactions against civil-rights progress, from Jim Crow to Brown v. Board of Education. She pointed out that just a few decades ago, black people were also barred from using certain bathrooms.

“Let me speak now directly to the people of the great state, the beautiful state, my home state of North Carolina,” she said. “You have been told that this law protects vulnerable populations from harm. That is just not the case. What this law does is inflict further indignity for a population that has already suffered far more than its far share. This law provides no benefit to society, and all it does is harm innocent Americans.”

DOJ’s lawsuit asks the court to declare that HB2 is discriminatory under Title VII and Title IX of the Civil Rights Act and violates the Violence Against Women Act. The suit names the state, Governor Pat McCrory, the state Department of Public Safety, the University of North Carolina system, and its board of governors.

The remarks represent some of Lynch’s most impassioned comments since taking over the Department of Justice. She replaced Eric Holder, who as attorney general was unusually blunt and aggressive on civil-rights issues. Lynch showed on Monday that she, too, can bring fire to such issues.

“Let us learn from our history and avoid repeating the mistakes of our past,” she said. “Let us reflect on the obvious: State-sanctioned discrimination never works, and it never looks good in retrospect.”

The lawsuit is the culmination of a week of heated exchanges. Last week, Deputy Assistant Attorney General Vanita Gupta wrote to McCrory, the Department of Public Safety, and the UNC system, informing them that DOJ had determined that the law violated Title VII and Title IX, and demanding that the state reply by Monday, agreeing not to enforce the law. McCrory, a Republican, criticized the letter and asked for more time to reply. He said on Fox News Sunday that the Justice Department had offered him an extension only if he agreed that the law was discriminatory and accused the federal government of being a “bully.” On Monday, McCrory announced that the state had filed a suit requesting a declaratory judgment from federal courts, asking them to rule that HB2 does not violate either the Civil Rights Act or VAWA.

A few hours later, Lynch stepped to the podium in Washington and announced the suit. Asked about McCrory’s “bully” accusation, she acidly replied that the people being bullied were transgender people in North Carolina.

The North Carolina General Assembly passed HB2 in March, during a specially convened one-day session. The law was a response to the city of Charlotte passing a local ordinance that required transgender bathroom accommodation and banned discrimination against LBGT people. HB2 bans local ordinances on both issues, and mandates that people in state facilities—including schools and universities—use bathrooms corresponding to the gender on their birth certificate, not the one with which they identify.

“Calling HB2 a bathroom bill trivializes what this is really about. HB2 translates into discrimination in the real world,” Gupta said at the press conference Monday. She added: "Transgender men are men. They live, work, and study as men. Transgender women are women. They live, work, and study as women.”

The General Assembly, which is controlled by Republicans, called its special session after McCrory—a Republican and former mayor of Charlotte—declined to do so. Once the bill was passed, however, McCrory quickly signed it—the entire process took less than 12 hours—and he has become the public face of the law nationally.

In her letter last week, Gupta informed McCrory that HB2 violated Title VII and Title IX. Although the Justice Department cannot strike down the law—a court would have to do that—the federal government can withhold billions of dollars in funding to the state for things like education, housing, and transportation if it determines that the state is unlawfully discriminating. McCrory’s lawsuit on Monday seemed intended to prevent the federal government from withdrawing those funds.

“North Carolina has long held traditions of ensuring equality,” McCrory said in a press conference Monday afternoon. “The majority of the citizens in this great state and this governor did not seek out this issue.”

Both halves of the governor’s statement are open to dispute. As Lynch pointed out, the Old North State has a long history of racial discrimination, like many states. The idea that North Carolina did not seek out the fight also earned immediate derision from HB2’s critics, who noted that the General Assembly had gone to extraordinary lengths—including the special session—to preempt Charlotte’s local ordinance, a rule that had been under debate for months.

One legal issue at stake is whether the gender identity of transgender people is covered by sexual-discrimination clauses under Titles VII and Title IX. McCrory charged that the Obama administration has attempted to write law through the executive branch. But courts have generally held that the executive branch has the right to interpret the Civil Rights Act to include transgender identity—most recently in a decision in the Fourth Circuit Court of Appeals in April. North Carolina is part of the Fourth Circuit.

“This is not a question on which there is a great amount of disagreement. I think it’s highly unlikely” that a court would side with McCrory, said Shannon Gilreath, a professor of law at Wake Forest University in Winston-Salem. “What they can do is forestall the inevitable.”

Time may be just what the governor wants. McCrory spoke out against Charlotte’s ordinance before it passed, but he did not seem eager to take the issue on until legislators passed the law. (Even if he had vetoed it, Republican supermajorities might well have overridden his veto, as they have done in the past.) It has become a millstone around his neck, as entertainers boycott the state and major companies, from PayPal to Deutsche Bank, cancel or pull back expansions in the state. The NBA, which is slated to hold its 2016 All-Star Game in Charlotte, has said it will move the game unless the law is repealed.

Meanwhile, the state’s attorney general, Roy Cooper, a Democrat who is running against McCrory in November, has criticized the law, refused to defend it in lawsuits, and used it as an issue against McCrory. Although the law may energize the state’s conservative voters ahead of the election, it risks alienating moderates who elected McCrory in 2012 on the basis of his image as a business-friendly pragmatist. But time might offer an opportunity for negotiation between Charlotte leaders and state Republicans. The two sides have reportedly been in conversation about a way out in which Charlotte would repeal its ordinance and the state would alter HB2, though the likelihood and terms remains unclear.

But a declaratory judgment against the state would create an interesting impasse: Not only would the state stand to lose billions in education funding, it might also force the hand of other federal agencies, including the departments of Transportation and Housing and Urban Development, to cut off funds as well.

The state can ill afford to lose all that money. Though Gilreath pointed out that some southern states were cut off from federal funding over their refusal to desegregate, the expanded federal role in issues like education means that losing Department of Education funds could cripple the state’s troubled, once-treasured university system, which has already seen its budget slashed by the General Assembly in recent years. The UNC system is not a plaintiff in McCrory’s suit, though it is a defendant in the Justice Department’s. Lynch noted that the UNC Board of Governors is set to meet Tuesday, and she repeatedly mentioned ongoing conversations with UNC, compared with what she portrayed as intransigence from the governor’s office.

The suit filed Monday isn’t the first time the Justice Department’s Civil Rights Division has tangled with McCrory and the state. In 2013, Republicans passed a strict new voting law. The Justice Department, along with a coalition of other groups including the North Carolina NAACP, sued the state over the law, alleging it was an attempt to suppress the black vote—another case where the historical legacy of Jim Crow loomed large. Last month, a judge in the same district where Monday’s suit was filed ruled against the plaintiffs, finding the law did not single out minority voters. The Justice Department appealed that ruling on Friday. Three days later, the department was back with another suit against the state.

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