The opening day of the Supreme Court’s hearings on the Affordable Care Act (ACA) made strange bedfellows: both the 26 states opposing the law and the federal government argued that the Court should rule on the individual mandate now.

Listen to today's arguments, and read the transcript, courtesy of the Supreme Court of the United States.

A third court-appointed attorney, Robert Long, argued that the mandate’s penalty, charged if an individual fails to purchase health insurance starting in 2014, is a tax under the Anti-Injunction Act (AIA). The AIA prevents preemptive challenges to taxes.

Long was appointed by the Court to take that position after the federal government dropped the argument in the lower courts. Long noted that the penalty is expressly stated to be “assessed and collected in the same manner” as a tax and that it is included on individual’s federal tax filings.

If the Court were to rule that the mandate penalty qualified as a tax and thus dismissed the case under the AIA, the mandate’s opponents would likely have to wait until 2015 after the first round of tax returns that include the penalty are filed.

The federal government, represented by Solicitor General Donald Verrilli, and the law’s opponents, represented by attorney Gregory Katsas, arrived at the same conclusion (the Anti-Injunction Act is not applicable to the challenge to the penalty), but got there through different reasoning:

  • Verrilli agreed that the AIA is a jurisdictional statute (meaning it dictates whether or not the Court can hear a case), but that the mandate penalty doesn’t constitute a tax under the AIA. He noted that Congress debated characterizing the penalty as a tax while developing the law, but deliberately chose to label it as a penalty.
  • Katsas asserted that the AIA is merely a potential defense for the federal government when challenges to taxes are made, rather than a jurisdictional statute. However, if the court did not take that view, he also argued that the mandate’s opponents were challenging the requirement to buy insurance (rather than the resulting penalty, which is included in a separate chapter of the law), which would render the AIA moot.

As expected, the Court’s justices grilled each attorney on their argument, and attempting to discern their positions from their lines of questioning is a difficult task. Most legal experts, in briefings around Washington, D.C., before the hearings began, agreed that the Court would likely to decide to rule on the case now. An observation by Associate Justice Stephen Breyer toward the end of the 90-minute session that opened the three days of argument on the ACA might indicate that the Court will take that position.

“They did not use that word ‘tax’,” Breyer said while addressing Long in the final five minutes of the hearing, echoing the argument that Verrilli made during his oral argument and in his merit brief.

The beginning of the Monday’s hearing focused on Long’s argument that the AIA prohibited the court from ruling on the mandate and whether the AIA is jurisdictional or not. Chief Justice John Roberts noted that there was some inconsistency about how the Court has read the law, and Justice Elena Kagen pointed to a previous case, South Carolina v. Regan (1984), in which the Court had concluded that the case provided an “equitable exception” to the AIA, thus allowing the Court to rule. Kagen implied that the mandate penalty characterized a similar exception.

Regardless of whether the AIA is jurisdictional, Long was also confronted with the fact that Congress deliberately chose not to label the mandate penalty as a tax. Breyer noted that the AIA is designed to protect the federal government’s collection of revenue, and revenue is not the primary purpose of the mandate penalty.

Justice Sonia Sotomayor said that the Internal Revenue Code makes a distinction between a tax and a penalty. “It’s very explicit,” she said.

Kagen pointed out that the mandate itself and the penalty for non-compliance are codified in two separate sections of the ACA. There are also different exceptions for the insurance requirement and the penalty, respectively. “Aren’t you trying to rewrite the statute in a way?” she asked rhetorically. “Congress… made a decision that that shouldn’t be the way the statute reads, that it should instead be a regulatory command and a penalty attached to that command.”

“Well, I wouldn’t argue that this statute is the perfect model of clarity,” Long said, sparking a round of laughter.

When Verrilli took his turn at the podium, Justice Antonin Scalia observed the irony that the federal government was today arguing that the Anti-Injunction Act does not apply because the mandate penalty is not a tax, but would return tomorrow to argue that the mandate is constitutional because of Congress’s authority under the Spending and Taxing clause.

Otherwise, most of the justices’ questions centered on the future implications of the Court’s ruling on the AIA issue. Verrilli argued that the mandate penalty was a unique case that would not be applicable in most other situations.

POLITICO polled some court watchers from both sides following this morning's hearings, and they concurred that the Court seemed unpersuaded by Long's arguments.

If the Court decides the AIA does not apply, a ruling on the individual mandate is expected this summer before the end of the Court’s current term.

The ACA hearings continue Tuesday with two hours of oral arguments on the constitutionality of the individual mandate.

Below is the transcript of Monday's hearing.