'Bathroom Bill' Debate Could Be 'Historic Moment' in Transgender Rights

— -- The battle unfolding in North Carolina could be a watershed moment in the fight for transgender rights in America, activists say.

The Department of Justice and North Carolina Gov. Pat McCrory both sued each other yesterday over the House Bill 2 ("Bathroom Bill") legislation. Attorney General Loretta Lynch subsequently delivered passionate remarks in support of the transgender community during a press conference, drawing the attention of the whole country to the state's dueling court battles over the rights of transgender individuals.

"This is the most prominent national discussion that our country has had on transgender rights in a long, long time," Matt Hirschy, the Director of Advancement for Equality North Carolina, an LGBTQ advocacy group, told ABC News today. "It is going to be a historic moment for the trans community when we get to the bottom of what's going on."

HB2 was passed into law at the end of March, causing a nationwide uproar and many singers to cancel their North Carolina concerts in protest.

Today, democratic lawmakers in North Carolina filed the "Equality for All Act," a non-discrimination bill aimed "to protect all North Carolinians against discrimination in all walks of life."

"I don't see a really a good outcome for the McCrory administration. The only option for them right now is to repeal the law and to try to save what is left of our state's reputation," Hirschy continued. "This was never a bathroom bill, it is an anti-working people bill, it is an anti-LGBTQ bill, and it is an anti-North Carolina bill."

There have been many recent victories in the gay rights movement, including the 2011 repealing of "Don't Ask, Don't Tell," and the 2015 Supreme Court ruling that guaranteed the right to same-sex marriage nationwide.

Some activists feel that the rights of trans people, however, have been pushed aside. Openly trans people are still forbidden from serving in the military, according to the National Center for Transgender Equality. Many health insurance companies, including New York State Medicaid, also specifically exclude transgender people, according to the GLAAD.

Evan Young, National President of the Transgender American Veterans Association told ABC News that the action in North Carolina is "opening a lot of eyes and starting the conversation."

North Carolina houses Fort Bragg, the largest U.S. Army base in the country.

"As far as transgender veterans, we are patriotic Americans that have served our country and we have the right to use whatever restroom that matches our gender identity."

"It's really not about bathrooms at all," he continued. "It's about discrimination, plain and simple. For years we have been going to the bathroom that matches our gender identity. Most of us you wouldn't even know that we were in there."

Jillian Weiss, a professor at Ramopo College in New Jersey specializing in transgender workplace issues, as well as a lawyer representing transgender people around the nation, told ABC News that the battle in North Carolina is "amazingly key" in the fight for transgender rights.

"It goes far beyond bathrooms," Weiss said. "What makes the bill in North Carolina so pernicious is that it is a specific law to take away rights from a specific group of people."

"I would say that it is clear from a legal point of view that the complaint filed by the state of North Carolina relies on old cases," Weiss said, "and essentially is assuaging an Old World view that the transgender community is not real."

Attorney General Lynch directly addressed transgender individuals in a press conference announcing the lawsuit yesterday.

"Let me also speak directly to the transgender community itself," she began. "Some of you have lived freely for decades. Others of you are still wondering how you can possibly live the lives you were born to lead. But no matter how isolated or scared you may feel today, the Department of Justice and the entire Obama Administration wants you to know that we see you; we stand with you; and we will do everything we can to protect you going forward. Please know that history is on your side."

Weiss said that Attorney General Lynch's comments were very powerful for members of the transgender community.

"It was a completely unprecedented statement by the United States government, of just unparalleled support of transgender people," she said. "Many people that I know in the community were crying when they heard that statement."

Kris Hayashi, the Executive Director of the Transgender Law Center told ABC News today, "The fact is that with the passage of HB2, North Carolina became the first state in the country specifically targeting transgender people."

"Her statement yesterday was an incredibly powerful message," Hayashi said of Lynch's remarks, "That the federal government will not allow discrimination against transgender people to stand."

"We are part of communities and of families," Hayashi said. "At the end of the day we are just trying to live our lives."

According to the Human Rights Campaign, 66 percent of likely voters who know a transgender person expressed support. This visibility in the public sphere can prove fundamentally important. The conversation that North Carolina's HB2 has sparked could be the beginning of broader national conversations.

"It's a moment where we can start talking about this," Young said. "It's bringing us into the spotlight."