A sign protesting a recent North Carolina law restricting transgender bathroom access adorns the bathroom at the 21C Museum Hotel in Durham, North Carolina on 3 May Reuters

The US Justice Department and North Carolina's state government are locked in a fierce battle over the state's new transgender toilet law.InMarch, North Carolina became the first state to ban people using multiple occupancy lavatories or changing rooms that do not match the sex on their birth certificate.

The Justice Department filed a lawsuit on Monday 9 May against North Carolina hours after the state filed its own suit over the law that restricts who can use which toilets. Attorney General Loretta Lynch compared the transgender toilet law to previous laws on racially segregated toilets.

"This is about the dignity and respect that we accord our fellow citizens and the laws that we as a people and a country have enacted to protect them," Lynch told a news conference. Lynch, who herself hails from North Carolina, added: "This law provides no benefits to society and all it does is harm innocent Americans."

The battle between state and federal governments boiled over when North Carolina Republican Governor Pat McCrory sued the Obama Administration in US District Court in Raleigh, North Carolina over the Justice Department's order for the state stop the implementation of House Bill 2, (HB2) requiring transgender people to use the toilets of the gender on their birth certificate.

The lawsuit names the Justice Department, Lynch and the chief of the department's Civil Rights Division, Vanita Gupta, as defendants, accusing them of riding roughshod over federal civil laws.

According to POLITICO, McCrory told reporters he had "asked a federal court to clarify what the law actually is."

The governor, who is up for re-election, said he expects to have support from the state's Republican-controlled legislature and "private sector entities from throughout the United States and possibly other states.

"This is not just a North Carolina issue. This is a now a national issue," he said, adding that he believes legislators in Washington DC should settle the dispute.

In its countersuit, the federal government argued the toilet bill is "facially discriminatory" towards transgender individuals.

Earlier in May, the Justice Department sent a letter to McCrory saying HB2 violated civil rights law and warned that if no changes were made by the end of 9 May, it was prepared to file a lawsuit or strip the state of some federal funding. In response, McCrory filed a lawsuit. "I do not agree with their interpretation of federal law," he said.

This is not the first legal battle between the federal government and North Carolina. The Washington Post noted that Lynch and the Tar Heel State are also locked in a battle over voting rights.

The Justice Department, along with other groups, have challenged McCrory's 2013 law that restricts same-day registration and voting and reduces early voting. In April, a federal judge upheld the law, nothing that "North Carolina has provided legitimate state interests" for the measures. The decision has been appealed by civil rights groups.