Attorney General: HB2 creates 'state-sponsored discrimination'

Fight over HB2 goes to the next level as DOJ sues North Carolina

RALEIGH, NC (WBTV/AP) - Attorney General Loretta Lynch says North Carolina's law restricting restroom access for transgender people amounts to "state-sponsored discrimination."

Lynch spoke during a news conference Monday announcing a federal civil rights lawsuit against the state and against Gov. Pat McCrory. She says the law only serves to "harm innocent Americans."

The Justice Department lawsuit says the law has caused transgender people to suffer "emotional harm, mental anguish, distress, humiliation, and indignity." It seeks an order that would prevent the law's enforcement.

WEB EXTRA: Click here to read the DOJ's lawsuit against North Carolina

Lynch spoke directly to residents of her native state, saying they have been falsely told by North Carolina proponents that the law protects vulnerable people from harm in bathrooms.

"Instead, what this law does, is inflict further indignity on a population that has already suffered far more than its fair share," she said. "This law provides no benefit to society, and all it does it is harm innocent Americans."

Lynch likened her agency's involvement in the North Carolina law to the shifting expansion of civil rights that scrapped legal racial segregation and prohibitions against gay marriage.

"This is about the dignity and the respect that we accord our fellow citizens," Lynch 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."

"Governor McCrory is appropriately seeking legal certainty to a complex issue impacting employers and students throughout the country," said Governor McCrory's communications director Josh Ellis Monday night. "In contrast, the Attorney General is using divisive rhetoric to advance the Obama administration's strategy of making laws that bypass the constitutional authority of Congress and our courts."

Dueling lawsuits

The DOJ lawsuit was filed Monday just hours after Gov. Pat McCrory filed his own lawsuit over the law. McCrory wants the sweeping law, which limits protections for gay, lesbian, transgender and bisexual people, kept in place.

"Our nation is dealing with a very new, complex and emotional issue," McCrory said Monday afternoon. The United States Department of Justice challenged House Bill 2 last week.

"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," the governor said.

"This was not a North Carolina state agenda. No one in North Carolina was talking about bathroom policy until the Charlotte city council imposed a mandate on private businesses," McCrory said. "I also welcome additional dialogue with the city of Charlotte and the state legislature which has been ongoing for the past week."

The lawsuit, filed by McCrory Monday morning, names the federal government, United States Attorney General Loretta Lynch and Principal Deputy Assistant Attorney General Vanita Gupta.

McCrory said he wants to ensure residents that "North Carolina has long held traditions of ensuring equality."

Some residents are cheering on the Governor.

"I don't agree with what the federal government has to say about it," said Bill Millring of Charlotte. "I agree with he has to say about it."

But other people believe the battle is give the state a black eye.

"I think it's awful," Isabelle Bradberry said."I don't know as much detail about the lawsuit and everything but I think the bill itself is unfair and should be repealed."

DOJ: HB2 violates civil rights

The Department of Justice sent a letter to McCrory last week saying North Carolina's House Bill 2 violates federal civil rights laws. The Justice Department previously said state officials must confirm by Monday that they will not comply with or implement the law called House Bill 2.

House Bill 2 requires transgender people to use public bathrooms that match their birth certificates. The law also makes clear local measures can't expand anti-discrimination protections for sexual orientation or gender identity.

Defenders of the law have argued that it necessary to protect the safety and privacy of people in bathrooms. Opponents have argued that the danger of a transgender person molesting a child in a restroom is all but nonexistent.

McCrory hopes other states will join North Carolina in court as it fights the Justice Department's position that the Civil Rights Act requires that transgender people be allowed to access facilities matching their gender identities.

"This is not just a North Carolina issue, this is now a national issue and an issue that imposes new law on every private sector employer," McCrory said Monday. "Our nation is one nation, especially when it comes to fighting discrimination, which I support wholeheartedly. Ultimately I think it's time for the US Congress to bring clarity to our national anti-discrimination provisions."

The Texas Attorney General spoke about the issue after McCrory filed his lawsuit.

"The people of the United States, through their representatives in Congress, enacted the Civil Rights Act of 1964 to ensure, in part, that men and women are treated equally," Attorney General Ken Paxton said. "Congress has not changed this law to mean that individuals may choose whether they want to be male or female for the purpose of public accommodations."

"One's sex is a biological fact, not a state of mind, and this threat to North Carolina is the latest in a long series of efforts by an unaccountable federal executive branch," Paxton continued. "My office stands with Governor McCrory and the people of North Carolina regarding this unconstitutional form of federal overreach."

Republican leaders file secondary lawsuit

Monday afternoon, North Carolina Senate Leader Phil Berger (R-Rockingham) and House Speaker Tim Moore (R-Cleveland) filed a secondary lawsuit asking the court to declare that "North Carolina's commonsense law to maintain sex-specific restrooms complies with federal law."

"It's just extremely disappointing," said State Representative Tricia Cothaam. "It's just one more lawsuit at taxpayers' expense."

Cotham said she believes this will be a long drawn out fight.

"They are digging their heels in. I don't think they are interested in fixing this terrible legislation which is about discrimination but it's also about jobs in North Carolina and making sure families can provide for their families, pay rent, pay their childcare. But instead we're going to lose business and we're going to lose more."

RELATED: NC Republican leaders file secondary lawsuit over HB2

The bill came as a response to Charlotte's non-discrimination ordinance, which broadly defined how businesses must treat gay, lesbian and transgender customers. The center of the controversy focused on bathrooms. The city ordinance was passed in February and repealed with the state's passage of HB2 in late March.

In a one-day vote, the NCGA repealed the Charlotte ordinance, which was slated to take effect on April 1.

Following the national fallout, McCrory signed an executive order to protect the privacy and equality of all North Carolinians. According to the governor's office, Executive Order 93 "clarifies existing state law and provides new protections for North Carolina residents."

RELATED: Gov. McCrory signs executive order to protect 'privacy and equality'

The DOJ said it also sent similar letters to the North Carolina Department of Public Safety (NCDPS) and the University of North Carolina. NCDPS Secretary Frank Perry is named as a co-plaintiff in Monday's lawsuit.

McCrory's Lawsuit

The document seeks a "declaratory and injunctive relief against the Unites States of America [...] for their 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 transgendered state employees."

"The Department's position is a baseless and blatant overreach," the document continues. "This is an attempt to unilaterally rewrite long-established federal civil rights laws in a matter than is wholly inconsistent with the intent of Congress and disregards decades of statutory interpretation by the Courts."

According to a statement sent to media shortly after the filing, McCrory says he is asking the federal courts to clarify federal law.

"The Obama administration is bypassing Congress by attempting to rewrite the law and set restroom policies for public and private employers across the country, not just North Carolina. This is now a national issue that applies to every state and it needs to be resolved at the federal level," said Governor McCrory. "They are now telling every government agency and every company that employs more than 15 people that men should be allowed to use a women's locker room, restroom or shower facility."

In his filing, Governor McCrory cited the fact that he has directed state agencies to make a reasonable accommodation of a single occupancy restroom. The state also allows private companies to set their own policies for bathrooms, locker rooms and shower facilities.

Friday, the McCrory administration requested additional time to respond but they say DOJ officials "refused to grant that request unless the state agreed to unrealistic terms."

"I'm taking this initiative to ensure that North Carolina continues to receive federal funding until the courts resolve this issue," said Governor McCrory.

Cooper responds

North Carolina Attorney General Roy Cooper, a Democrat, is challenging the Republican McCrory's re-election bid in November.

"We have already lost thousands of jobs and tens of millions of dollars in economic activity because Governor McCrory has put his political agenda first," Cooper said after the lawsuit was filed. "Now billions in education funding are on the line. It's time for the governor to stop the partisan gamesmanship and undo this law now."

Cooper released a video statement Monday afternoon.

"Since Governor McCrory signed House Bill 2 into law just weeks ago, there has been a real and devastating impact on North Carolina's economy and reputation," Cooper said. "And now the governor is pouring gas on the fire that he lit and putting billions in education funding on the line. Instead of doing what's right for our state, he's doubling down on what he knows he did wrong. Enough is enough."

Additional responses

The American Civil Liberties Union, ACLU of North Carolina, and Lambda Legal – who are challenging House Bill 2 in federal court on behalf of six LGBT North Carolinians and members of the ACLU of North Carolina – released the following statement:

"While transgender people in North Carolina remain in the perilous position of being forced to avoid public restrooms or risk violation of state law, Governor McCrory has doubled down on discrimination against them. The federal government made clear that HB 2's mandate of discrimination against transgender people violates federal civil rights laws but McCrory and other political leaders in the state have decided to risk federal funding to maintain that discrimination," the statement said. "Transgender people work for the state of North Carolina, attend school in North Carolina, and are a part of every community across the state. It is unconscionable that the government is placing a target on their backs to advance this discriminatory political agenda.  Lawsuits are normally filed to stop discrimination - not to continue it."

On April 20, 2016, Joaquín Carcaño, a plaintiff in the ACLU and Lambda Legal case, filed a charge alleging violations of Title VII with the Equal Employment Opportunity Commission.

McCrory said on "Fox News Sunday" he was not aware of any North Carolina cases of transgender people using their gender identity to access a restroom and molest someone. Other supporters of the law cite reports elsewhere of men entering women's bathrooms — thanks to policies allowing transgender people to enter the restrooms aligned with their gender identity — to highlight the threat of sexual assault.

The Justice Department noted a ruling last month by a federal appeals court that a transgender Virginia high school student has a right to use bathrooms that correspond with his new identity. The ruling by a three-judge panel of the 4th U.S. Circuit Court of Appeals is binding on five states, including North Carolina. Virginia is seeking a re-hearing by the entire appeals court.

Federal funding cuts looming?

The U.S. Education Department and other federal agencies could try to cut off money to North Carolina to force compliance.

The state's public university system was expected to issue a separate response Monday to the Justice Department warning letter it received. The university's governing board scheduled a special meeting for Tuesday to receive a private "legal briefing" from its top staff attorney.

The UNC system risks losing more than $1.4 billion in federal funds if its observance of the law is found to violate federal sex discrimination protections in education and employment. Another $800 million in federally backed loans for students who attend the public universities also would be at risk.

The legal team

The lawyers filing Monday's lawsuit on behalf of McCrory and the public safety agency head appointed by the governor include McCrory's top legal aide and Columbia, South Carolina-based lawyer Karl S. "Butch" Bowers Jr.

Bowers previously represented McCrory in a federal lawsuit alleging new Republican-backed voting law changes were intended to suppress minority voter turnout.

NCAG Cooper declined to defend that law in court and also has refused to defend the LGBT law.

Copyright 2016 WBTV. The Associated Press contributed to this report. All rights reserved