North Carolina filed a lawsuit Monday against the federal government over the Obama Administration’s challenge to the North Carolina law that mandates transgender people use the bathroom facility that corresponds to their birth gender, not gender identity.

The Obama Administration Claims that the North Carolina so-called “bathroom law” limits protections for people in violation of Title VII of the Civil Rights Act, which prohibits employment discrimination against people on the basis of sex. Obama’s government has threatened the 17-campus UNC system’s $1.4 billion in federal money if the state legislature doesn’t repeal the law. Another $800 million in federally backed loans for students who attend public universities could also be at risk if it’s found that enforcing the bathroom law violates Title IX of the Civil Rights Act, which bars discrimination based on sex in any education program or activity receiving Federal financial assistance.

The Feds Gave North Carolina a deadline of Monday to report whether it would refuse to enforce the bathroom law. The Feds said they would sue North Carolina if the state did not comply. North Carolina beat them to the punch.

According to the ABCNews article, the lawsuit called the bathroom law a “common sense privacy policy” and said “the Justice Department’s position is an attempt to unilaterally rewrite long-established federal civil rights laws in a manner that is wholly inconsistent with the intent of Congress and disregards decades of statutory interpretation by the courts.” You can read the lawsuit here.