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The U.S. Justice Department sued North Carolina Monday, and the state in return sued the Justice Department in a growing dispute over a law that bars state agencies, including public colleges and universities, from allowing transgender people to use bathrooms or locker rooms that do not correspond with their legal gender at birth. The law has a number of other provisions that are also being fought about in court, but the bathroom provisions have been cited by the department as evidence that the University of North Carolina's campuses are violating Title IX of the Education Amendments of 1972, potentially endangering federal funds that flow to the university system. The Justice Department suit was also filed against the UNC system.

Margaret Spellings wrote to the Justice Department Monday, saying that the system was taking seriously the issues raised by federal officials and planned to discuss them at a special board meeting today. In a statement, Spellings, the system president, said UNC lacks the authority to ignore state law, but also said the system is in full compliance with federal antibias statutes such as Title IX and is committed to making all students welcome. She said the university is "truly caught in the middle" of state and federal requirements.