Justice Department sues North Carolina over anti-LGBT bathroom law
U.S. Attorney General nominee Loretta Lynch on Nov. 8, 2014 (CNN/Screenshot)

The U.S. Justice Department on Monday filed a federal lawsuit against the state of North Carolina over its controversial "bathroom law," according to the Associated Press.

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The Department of Justice is seeking a permanent injunction to block the law and a declaration that the law is discriminatory.

North Carolina had filed its own lawsuit against the Justice Department on Monday over the so-called “bathroom law,” which requires that people use the restroom corresponding to their birth gender. The law, House Bill 2, also prohibits local governments from banning discrimination against LGBT people.

The Justice Department said last week that the law discriminates against transgender people and therefore violates Title VII of the Civil Rights Act.

In a letter to North Carolina Governor Pat McCrory, the Justice Department said: "Access to sex-segregated restrooms and other workplace facilities consistent with gender identity is a term, condition or privilege of employment. Denying such access to transgender individuals, whose gender identity is different from their gender assigned at birth, while affording it to similarly situated non-transgender employees, violates Title VII."

More than $800 million in federally-backed loans for public universities are at risk if North Carolina refuses to comply with Title VII. The University of North Carolina system could lose more than $1.4 billion in federal funding.

"The government is acting as funder, not just enforcing federal laws, and they provide that money on the condition that it not be spent in a discriminatory manner," Brad Sears, the executive director of the Williams Institute, explained to the Associated Press.

The state had until Monday to respond to the Justice Department's claim. But North Carolina filed a last-minute lawsuit arguing the Justice Department's position was a “baseless and blatant overreach.”

McCrory said he wanted a federal court and Congress "to clarify federal law."

"Our nation is dealing with a very new, complex and emotional issue," McCrory said during a Monday press conference. "I think it's time for the U.S. Congress to bring clarity to the national anti-discrimination policies under Title VII and Title IX."