In a case that has huge implications for the fate of HB 2 in North Carolina, a federal appeals court has ruled that a Virginia school’s bathroom policy, which barred a transgender teen from using the bathroom of his affirmed gender identity, is discriminatory. The decision reversed U.S. District Court Judge Robert Doumar’s previous ruling in September to dismiss, sending the case back to the lower court.
Previously, a lower court’s judge had rejected Gavin Grimm’s discrimination claim, cited by Pat McCrory in his “fact sheet” released after HB 2. The AP quotes a UNC law professor as saying that this sets a precedent for the 4th Circuit, which includes North Carolina:

Maxine Eichner, a University of North Carolina law professor who is an expert on sexual orientation and the law, said the ruling — the first of its kind by a federal appeals court — means the provision of North Carolina’s law pertaining to restroom use by transgender students in schools that receive federal funds also is invalid.

“The effects of this decision on North Carolina are clear,” she said, adding that a judge in that state will have no choice but to apply the appeals court’s ruling.

UPDATE: The ACLU, ACLU of North Carolina, and Lambda Legal have issued a joint statement on the ruling.

“Today’s ruling makes plain that North Carolina’s House Bill 2 violates Title IX by discriminating against transgender students and forcing them to use the wrong restroom at school. This mean-spirited law not only encourages discrimination and endangers transgender students – it puts at risk billions of dollars in federal funds that North Carolina receives for secondary and post-secondary schools. House Bill 2 exposes North Carolinians to discrimination and harm, is wreaking havoc on the state’s economy and reputation, and now more than ever, places the state’s federal education funding in jeopardy. We again call on Governor McCrory and the General Assembly to repeal House Bill 2 and replace it with full nondiscrimination protections for LGBT people.”

Equality NC also issued its own statement:

“Today’s ruling makes it clear that our schools and federally funded education facilities must allow transgender people to use the correct bathroom that matches their gender identity. Further, this law makes clear that anti-transgender legislation like North Carolina’s House Bill 2 are unconstitutional and misguided. We know more, now than ever, that full repeal of this awful law must happen in the short session. House Bill 2 violates Title IX and is bad for North Carolinians,” said Chris Sgro, Executive Director of Equality NC.

Meanwhile, the Raleigh Chamber of Commerce issued a statement calling for the repeal of HB 2.

The Greater Raleigh Chamber of Commerce opposes HB2 and calls for its immediate repeal. This legislation is bad for business and bad for North Carolina. We must eliminate the issues this legislation creates. The Greater Raleigh Chamber will work with Gov. Pat McCrory, legislators, and other elected leaders to find a solution that is in the best interest of our region and state while strengthening our commitment to diversity, inclusion, and equality…HB2 has already harmed business growth in Wake County and the state of North Carolina’s reputation. This legislation is a threat to our mission as an organization devoted to growing our region’s economy. Our state has been represented negatively in more than 5,300 media outlets across the United States with nearly 8 billion impressions.

Correction: A previous version of this article mistakenly stated that the ACLU and Lambda Legal’s press release was co-authored by Equality NC. This post has been updated with Equality NC’s own statement.

Correction: Originally, this article said that the bathroom policy was “overturned,” and has been updated with the correct information.