North Carolina Gov. Pat McCrory (R) dismissed a lawsuit Friday that he brought against the federal government over the state’s anti-transgender HB 2 law.

McCrory told a group of local businesspeople last week that he was “going to confront” any challenge to the discriminatory measure, according to a report from the Charlotte Business Journal.

The law would ban transgender people from using public restrooms in accordance with their gender identity. Other provisions of the discriminatory GOP-backed law include the establishment of a statewide nondiscrimination ordinance that supersedes any local nondiscrimination measures.

The law has faced intense legal and public scrutiny.

A federal judge in August issued a temporary injunction that blocked the University of North Carolina from enforcing the “bathroom bill” provision of HB 2. The ruling was in response to a lawsuit filed by two transgender North Carolinians that challenged the constitutionality of the law.

The U.S. Department of Justice in May warned North Carolina that HB 2 violated the Civil Rights Act and Title IX. McCrory then filed a lawsuit against the federal government. U.S. Attorney General Loretta Lynch immediately filed a countersuit.

The Republican governor cited “substantial costs” as the reason he decided to dismiss the lawsuit, as the state faces multiple legal challenges to HB 2.

“The substantial costs to the State of litigating similar legal issues in two different judicial districts, and the interests of judicial economy and efficiency, plaintiffs feel compelled to file this notice of voluntary dismissal without prejudice,” attorneys for McCrory wrote.

The governor’s decision comes after the Atlantic Coast Conference (ACC) announced that the conference would remove all athletic championships from North Carolina.

“As members of the Atlantic Coast Conference, the ACC Council of Presidents reaffirmed our collective commitment to uphold the values of equality, diversity, inclusion and non-discrimination,” the ACC said in a statement. “We believe North Carolina House Bill 2 is inconsistent with these values, and as a result, we will relocate all neutral site championships for the 2016-17 academic year.”

McCrory said in a statement that the issue would soon be resolved and asked for the legal process to proceed without “economic threats or political retaliation” towards North Carolina or other states.