What’s Next for North Carolina’s Controversial ‘Bathroom Bill’

North Carolina lawmakers and the DOJ filed dueling lawsuits on Monday.

NC Gov. Pat McCrory, who signed the bill into law in March, said Monday he filed the suit along with Frank Perry, secretary of the North Carolina Department of Public Safety, to gain "clarity" on federal anti-discrimination laws. "We believe a court, rather than a federal agency, should tell our state, our nation and employers throughout the nation, what the law requires," he said.

Meanwhile, DOJ came out swinging yesterday, with Attorney General Loretta Lynch saying that North Carolina has “created state-sponsored discrimination against transgender individuals.”

Here's what you need to know about the future of the law:

How We Got Here

The law also declares that state law overrides all local ordinances concerning wages, employment and public accommodations.

“We’re challenging this extreme and discriminatory measure in order to ensure that everyone who lives in and visits North Carolina is protected under the law,” Chris Brook, legal director of the ACLU of North Carolina, said in a statement.

Republican state lawmakers have held firm, accusing the federal government of exercising an “overbearing abuse of executive authority.”

What Happens Now

On Tuesday, Democrats in North Carolina's General Assembly introduced the "Equality for All Act” to counter HB2.

The bill says it’s designed to “protect all North Carolinians against discrimination in all walks of life.”

“We have always known, and come to understand even more urgently during the HB2 debate, the incredible need for non-discrimination protections for LGBT and other North Carolinians,” said Representative Chris Sgro, one of the sponsors of the legislation, in a statement. “This bill, along with the repeal of HB2, is the important next step that this General Assembly and Governor McCrory must take in order to make North Carolina a true state of equality and help heal our national reputation.”

However, there isn’t much chance of the legislation passing, according to Maxine Eichner, professor of law at UNC. “The leadership of the General Assembly certainly has not shown any willingness on ending this controversy by protecting gender identity and sexual orientation,” she said. Republicans control the state's General Assembly.

The University of North Carolina Board of Governors held a special closed-door meeting today to discuss where to go next.

“The University takes its obligation to comply with federal non-discrimination laws very seriously. We also must adhere to laws duly enacted by the State’s General Assembly and Governor, however. HB2 remains the law of the State, and the University has no independent power to change that legal reality,” she wrote.

Where Things Go From Here

The dueling lawsuits were filed in different federal districts, but may end up being consolidated.

“These are the kinds of things that the Supreme Court ultimately tries to settle,” said Katherine Bartlett, professor of law at Duke.

If these lawsuits end up before the Supreme Court, the justices may make a significant ruling about whether the existing civil rights laws protect transgender people from discrimination on the basis of gender identity.

The looming presidential election is significant as well. The Obama administration has taken the position that the existing civil rights laws extend to gender identity discrimination, but it's possible that a future administration could take a different view, according to Kate Shaw, ABC News’ Supreme Court consultant.