Gov. Pat McCrory sued U.S. and Attorney General Loretta Lynch on Monday, and within hours she countersued him, placing the state at the epicenter of the Obama administration’s national transgender rights agenda.

McCrory is seeking an injunction and federal court order declaring North Carolina is not discriminating against the transgender community with its House Bill 2 law, and that the Department of Justice is committing “a baseless and blatant overreach” in ruling that H.B. 2 violates federal law. (See the full lawsuit here.)

McCrory and his chief legal counsel, Bob Stephens, held a news conference Monday in an executive mansion room overflowing with media representatives hours before the Justice Department deadline to respond to its ruling, which included a threat to withhold $4.5 billion in annual federal education funding.

“We believe a court rather than a federal agency should tell our state, our nation, and employers across the country what the law requires,” McCrory said in announcing he was filing suit in U.S. District Court for the Eastern District of North Carolina.

“Right now the Obama administration is bypassing the Congress by attempting to rewrite the law, and set basic restroom policies, locker room policies, and even shower policies for public and private employers across the country,” McCrory said.

“Our nation is dealing with a very new, complex, and emotional issue — how to balance the expectations of privacy and equality in one of the most private areas of our lives, restrooms, locker rooms, or public shower facilities,” the governor said.

Later in the day Lynch filed a countersuit in North Carolina’s Middle District, comparing in her press conference the transgender bathroom policy under H.B. 2 to Jim Crow laws of the Old South.

“This is about the dignity and respect we accord our fellow citizens, and the law we as citizens and a country have enacted to protect them,” Lynch said. “It is about the founding ideals that have led this country, haltingly, but inexorably in the direction of fairness, inclusion, and equality for all Americans.”

Addressing transgender Americans, Lynch said, “We stand with you. … And please know that history is on your side. This country was founded on the promise of equal rights for all, and we have always managed to move closer to that ideal, little by little, day by day. And it may not be easy, but we will get there together.”

The University of North Carolina Board of Governors is expected to take up the matter today. The university system is part of the Justice Department action against North Carolina.

To comply with the Justice Department’s demands, state officials would have to “set aside their constitutional duty and refuse to follow or enforce our state law,” McCrory said. “This was a substantial request with very serious implications.” The governor pointed out that the Justice Department gave North Carolina only three days for a response.

The Justice Department rejected McCrory’s request for an additional two weeks to respond. It offered one extra week if he issued a public statement agreeing with the federal interpretation of public law. McCrory chose to sue instead.

McCrory said he expected national support in seeking clarification on gender law “because this is not just a North Carolina issue.” Texas Attorney General Ken Paxton said his office would stand with McCrory against “this unconstitutional form of federal overreach.”

McCrory called on Congress to re-examine Title VII and Title IX to give direction on whether gender identity and gender expression should be added to statutory protections now based on sex.

Title VII, the federal statute McCrory and Public Safety Secretary Frank Perry are accused of violating, protects against discrimination in the work place. Title IX prohibits education institutions receiving federal money from discriminating based on sex. The UNC System is accused of violating that statute.

Fourth District U.S. Rep. David Price, a Democrat, issued a statement saying the Justice Department “acted within its clear authority, as granted by Congress, to enforce the Civil Rights Act of 1964.”

Sixth District Republican U.S. Rep. Mark Walker disagreed. “The Obama administration cannot unilaterally rewrite federal statute or reverse engineer congressional intent,” countered Walker. “With this letter, the DOJ has strayed well beyond their authority by trying to coerce North Carolina into compliance with DOJ’s preferred version of the law, and not the actual text.”

McCrory said H.B. 2 was passed due to Charlotte’s “government overreach” in enacting a local ordinance opening bathrooms, locker rooms, and showers to someone of one biological sex who identifies as a member of the opposite sex. He and the General Assembly wanted to “ensure privacy and expectation of privacy for everyone” at government buildings, schools, and rest stops while allowing private-sector entities to form their own policies.

Lt. Gov. Dan Forest, Senate Leader Phil Berger, R-Rockingham, and House Speaker Tim Moore, R-Cleveland, issued statements condemning the Justice Department’s “bullying” and “intimidation” tactics. Senate Democratic Leader Dan Blue, D-Wake, criticized McCrory’s lawsuit as a waste of taxpayer money.

Attorney General Roy Cooper, the Democratic gubernatorial candidate, issued a statement saying: “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. Now billions in education funding are on the line. It’s time for the governor to stop the partisan gamesmanship and undo this law.”

McCrory spokesman Josh Ellis responded to Lynch’s countersuit: “Governor McCrory is appropriately seeking legal certainty to a complex issue impacting employers and students throughout the country. 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.”

While a three-judge panel of the 4th U.S. Circuit Court of Appeals in Virginia recently heard a bathroom case involving a transgender public school student, Stephens said that ruling merely stated a district court had used the wrong evidentiary standard, and returned the case to the lower court for a retrial.

“So no mandate was issued to the district court,” nor has it conducted further proceedings, Stephens said. “Until that happens it is not the law in the federal court, nor is it the law in North Carolina.”

Greg Wallace, a professor of constitutional law at Campbell University, believes McCrory was right to file suit.

“The Obama administration, having failed to get transgender amendments through Congress to actually change the law in Title VII and Title IX, is now trying to change the law in some sort of bizarre interpretation of it,” Wallace said.

“There’s a strong legal argument to be made that neither of those statutes apply or give transgender persons unique protections, and especially they don’t give them the legal right to choose the bathroom of their choice,” Wallace said.

The governor’s complaint emphasizes the competing privacy issues at stake, which neither the Obama administration nor the recent 4th Circuit decision took into account, and the courts “need to address the Obama administration’s interpretation of Title VII and Title IX in light of competing privacy interests,” Wallace said.

“If you look at cases going back into the 1970s the majority of courts have ruled that transgender persons are not a protected class under Title VII or Title IX,” Wallace said. “I can give you cases where I think nine federal judges in three different circuits and two different districts have rejected the arguments that the Obama administration is making.”

Those legal arguments aren’t persuasive to left-leaning opponents of H.B. 2.

“This is not a bathroom bill. It is a hate legislation, and it is right for the federal government to come in and challenge it,” the Rev. William Barber, president of the North Carolina NAACP, said of H.B. 2 from outside the fence surrounding the executive mansion. “It is the politics of Jesse Helms revisited.”

“The governor has doubled down on discrimination in this state. He’s using litigation to try and deny rights instead of advance them, and it’s really deeply concerning,” said Sarah Preston, acting executive director of the ACLU of North Carolina who also was outside the executive mansion.

Hours after McCrory announced his lawsuit, Senate Leader Phil Berger, R-Rockingham, and House Speaker Tim Moore, R-Cleveland, said they, too, have filed a lawsuit in the federal Eastern District of North Carolina, asking the court to declare that North Carolina’s common-sense law to maintain sex-specific restrooms complies with federal law.

In a prepared statement they labeled the threat to withhold federal funding for the state’s public schools, roads and other programs part of the Obama administration’s “radical reinterpretation of longstanding federal law including Title IX.”

That would have not only “a major negative impact on the state budget,” but would have “far-reaching consequences and costs” to most private employers in the state.

“It’s unacceptable for the Obama administration to try to intimidate North Carolina taxpayers into accepting their radical reinterpretation of a law meant to protect women from discrimination into a law that would actually deny women their right to basic safety and privacy,” Berger and Moore said.

“What the Obama administration is arguing has never been written into law by Congress or settled in the courts,” they said, “and that is why we are seeking clarity – to confirm we remain in compliance with federal law.”