RALEIGH, N.C. (Legal Newsline) - North Carolina Gov. Beverly Perdue has vetoed a piece of proposed state legislation challenging the Obama administration's health care reform.

Perdue said in a statement released Saturday afternoon that she shot down House Bill 2, Protect Health Care Freedom, calling it "an ill-conceived piece of legislation" and "not good for the people of North Carolina."

"I'm vetoing HB 2 for three reasons: First of all, House Bill 2 actually is contradictory to the federal constitution. A state can't pass a law that is out of obeyance with federal laws, and this House Bill 2 clearly is," she said.

"Secondly, there are 27 other states that are engaged in this process. It's extraneous to North Carolina. This issue will reach the Supreme Court in a timely manner without North Carolina spending money and energy on it. It's superfluous.

"And third and most importantly, the attorney general and solicitor general have talked to me and the leadership of the General Assembly and explained clearly that there are some unintended consequences of House Bill 2 that dramatically affect our Medicaid program, potentially hurting the Childrens' Health Insurance Program, attacking our process of requiring uninsured motorists to have insurance, attacking college students for having insurance. And finally the whole issue of unintended consequences -- today none of us know what this will mean in two weeks, two months or two years."

Last month, Attorney General Roy Cooper, in a letter to Perdue, said the measure challenging President Barack Obama's health care law could not be enforced.

The General Assembly had passed the bill, making North Carolina the 27th state to challenge the new law, but needed Perdue's signature.

"House Bill 2 as written makes it illegal for North Carolinians and state officials to comply with certain federal laws," the attorney general wrote to Perdue. "As such House Bill 2 is unenforceable as to the provisions that directly contradict federal law."

The Supremacy Clause of the U.S. Constitution, Cooper said, provides that state legislatures cannot enact laws that directly violate federal law.

"State legislatures cannot pick and choose which federal laws the state will obey," Cooper wrote.

Cooper warned the governor that the state's Medicaid and Children's Health Insurance programs "could suffer financial consequences" and the state could face "extensive litigation."

On Jan. 31, U.S. District Judge Roger Vinson released a 78-page decision that said the federal government is unfairly trying to regulate economic inactivity under the Commerce Clause of the U.S. Constitution. Vinson granted summary judgment on that issue to the 26 states that have challenged health care reform.

Twenty states, led by Florida, filed the lawsuit in March after Obama signed the legislation into law. Recently, six states joined the effort.

The states are challenging a $695 annual penalty that will be imposed on individuals who do not purchase health insurance. Virginia, in a separate lawsuit, is defending a state law that says none of its residents can be penalized for not purchasing health insurance.

Because the mandate is too integral a part to be separated, Vinson voided the entire legislation. He called it "a difficult decision to reach."

The case is most likely headed for the U.S. Supreme Court.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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