By Katy Steinmetz
May 12, 2016

According to one theory, North Carolina is nicknamed the Tar Heel State because its Confederate soldiers stood their ground as if their feet were stuck. That lore was given a modern update on May 9 when Governor Pat McCrory sued the federal government after it ordered the state to effectively scrap a new law limiting bathroom access for transgender people. Within hours, the Justice Department responded with its own lawsuit, setting up a court fight that could shape civil rights law for generations.

That it has come to this is more surprising than it may seem. Although states and municipalities have proposed a raft of so-called bathroom bills in 2016, most have been voted down or vetoed following public pressure. A majority of Americans (57%) oppose the measures, according to a new CNN/ORC poll, and a broad coalition of major corporations have united to fight against them.

The same playbook was used by opponents in North Carolina. Entertainers like Bruce Springsteen canceled concerts. PayPal withdrew plans to bring 400 jobs to the state. The NBA said it would move the 2017 All-Star Game. But then something new happened: the Justice Department sent McCrory a letter saying the law violates civil rights protections because discrimination against transgender people is a form of sex discrimination. Unless the state backed down, the feds warned, it stood to lose billions of dollars in federal funds.

“This action is about a great deal more than just bathrooms. This is about the dignity and respect we accord our fellow citizens,” said U.S. Attorney General Loretta Lynch, likening the measures to the racist Jim Crow laws passed after the end of slavery.

McCrory, a Republican running for re-election, has dug in, accusing the feds of a “baseless and blatant overreach” stemming from a “radical reinterpretation” of the Civil Rights Act.

The dueling lawsuits could eventually find their way to the Supreme Court–and with it, perhaps, clarity about the limits of equal protection under the law. Says University of Michigan law professor Samuel Bagenstos: “People will look back on this law and this litigation as a very important moment.”

–KATY STEINMETZ

Write to Katy Steinmetz at katy.steinmetz@time.com.

This appears in the May 23, 2016 issue of TIME.

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