 (CNN) The United States and North Carolina tangled over transgender rights on Monday, with the Justice Department filing a civil rights lawsuit over the state's so-called bathroom bill and state officials defiantly filing suits against the federal directive to stop the implementation of the controversial legislation. Also, a major player in North Carolina -- the state's public university system -- defied the governor and legislature and told the Justice Department on Monday it intends to act "in compliance with federal law" as it relates to House Bill 2, known as HB2. Mr. McCrory’s bid for additional time is an extension of the argument that Republican leaders in North Carolina have been making for days: that the Justice Department imposed an excessively hasty deadline to determine the future of a law they contend is crucial to public safety and privacy. With hundreds of millions of dollars in funding at stake, UNC System President Margaret Spellings said longstanding policy prohibits university personnel from discriminating on the basis of, among other things, gender identity, sex, or sexual orientation. Attorney General Loretta Lynch, announcing the U.S. legal action to reporters on Monday, cast the bathroom bill issue as the latest civil rights struggle of the era. Hours earlier, North Carolina’s Republican governor, Pat McCrory, and the state’s secretary of public safety sued the agency in a different federal court in North Carolina, accusing it of “baseless and blatant overreach.” 
 
 The so-called bathroom law, passed in March and known as HB 2, prohibits people from using public restrooms not corresponding to their biological sex. It has thrust North Carolina into the center of a national debate over equality and privacy, and has now led the state into what could be a long and costly legal battle with the U.S. government. The speaker of the State House of Representatives, Tim Moore, said last week that the deadline would “come and go” without action by the Republican-controlled legislature. Lynch said the department is monitoring other U.S. jurisdictions that have passed or considered laws similar to North Carolina’s but declined to say whether the agency was planning any action against them. WASHINGTON/WINSTON-SALEM, N.C. (Reuters) - A fight between the Obama administration and North Carolina over a state law limiting public bathroom access for transgender people escalated on Monday as both sides sued each other, trading accusations of civil rights violations and government overreach. The federal government, Mr. McCrory said, had given North Carolina just “three working days to respond to a pretty complex letter and to a pretty big threat” and that state officials “don’t think three working days is enough to respond to such a threat.” 
 
 A spokesman for Roy Cooper, the Democratic candidate for governor and the state’s attorney general, criticized Mr. McCrory’s stand. McCrory told reporters that North Carolina had been forced to pass the law after the Charlotte city council passed an ordinance that allowed transgender people access to bathrooms based on gender identity in public and private buildings. He said later that the "new, complex and emotional issue" pitted privacy against equality. Slideshow (3 Images) 
 
 “We’re taking the Obama admin to court. They’re bypassing Congress, attempting to rewrite law & policies for the whole country, not just NC,” McCrory wrote on Twitter.
– Monday's the day that the Justice Department has demanded to hear back from North Carolina on whether the state is going to enforce its contentious public restroom law, Reuters reports. The feds had warned the state via a trio of letters last week that the law—which requires transgender individuals to use bathrooms that match up with the gender they were designated at birth—flouts civil rights and is discriminatory, and could lead to a federal lawsuit. One of the letters gave Gov. Pat McCrory until the close of business Monday to offer his solution to "remedy the situation," per CNN. But although McCrory has indicated he'll respond by day's end, the governor appears to be digging his heels in to stick by House Bill 2, the AP notes, potentially risking both the suit and funding for his state. UCLA School of Law attorneys estimate up to $4.8 billion in funding, mainly in the form of educational grants, could be at risk. During an appearance on Fox News Sunday, McCrory called the government a "bully" and framed the deadline as "unrealistic," per CNN. Roy Cooper, the state's Democratic AG, scoffed at the time complaint, reports the New York Times: "Governor McCrory signed HB2 into law in the dark of night after passing it in just 12 hours, and now complains when he's given five days to defend it." McCrory had been offered a one-week extension if he had conceded the law is discriminatory. On Fox News he rejected that option. "I'm not going to publicly announce that something discriminates, which is agreeing with their letter, because we're really talking about a letter in which they're trying to define gender identity, and there is no clear definition of gender identity."