The case, originally filed in March 2016 by the American Civil Liberties Union (ACLU) and Lambda Legal, sought to overturn the provisions of HB 2, which required individuals to use public bathrooms corresponding to the sex on their birth certificates and restricted local governments from passing anti-discrimination ordinances.
[3][4] The plaintiffs, including Joaquín Carcaño, a transgender man and employee of the University of North Carolina, amended their lawsuit in 2017 to challenge the constitutionality of HB 142.
Under the terms of the settlement, North Carolina agreed that nothing in HB 142 would prevent transgender individuals from lawfully using public facilities that correspond with their gender identity.
While it clarified that transgender individuals in North Carolina could use bathrooms corresponding to their gender identity, it did not fully overturn the restrictions on local non-discrimination ordinances imposed by HB 142.
The court found that the plaintiffs had sufficiently alleged that the exclusion of coverage for gender-affirming care could constitute sex discrimination under both the Equal Protection Clause and Title VII.
The lawsuit was part of the broader legal and political conflict over the rights of transgender individuals and the extent of state power to regulate public accommodations based on gender identity.
House Bill 2, signed into law by Governor Pat McCrory in March 2016, required individuals to use public bathrooms that corresponded with the sex listed on their birth certificates, rather than their gender identity.
In response to the law, the U.S. Department of Justice under Attorney General Loretta Lynch sent a letter to Governor McCrory on May 4, 2016, stating that HB 2 violated Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on sex, as well as Title IX of the Education Amendments of 1972, which prohibits sex discrimination in federally funded education programs and activities.
The lawsuit argued that the law discriminated against transgender individuals by denying them access to public facilities consistent with their gender identity and by perpetuating a hostile environment for LGBTQ+ people.