Insane Clown Posse are suing the Justice Department and the Feberal Bureau of Investigation.
The Michigan rap group filed the suit at the Federal District Court in Michigan on Wednesday.
The documents claimed that the United States government had made the "unwarranted and unlawful decision" to classify fans of the band as criminal gang members.
They said the classification led to them being harassed by law enforcement officers and caused them "significant harm".
Plaintiffs listed included Insane Clown Posse founders Joseph Bruce and Joseph Utsler, who perform under the stage names Violent J and Shaggy 2 Dope, and whose fans call themselves Juggalos.
It also listed four so-called Juggalos from Nevada, California, North Carolina and Iowa, each of whom offered detailed accounts of incidents in which they claim to have been subjected to police harassment and other punishments as a result of their identification with Insane Clown Posse.
"Among the supporters of almost any group - whether it be a band, sports team, university, political organization or religion - there will be some people who violate the law," the lawsuit read.
"However, it is wrong to designate the entire group of supporters as a criminal gang based on the acts of a few. Unfortunately, that is exactly what happened here."
The suit stems from an FBI report called National Gang Threat Assessment: Emerging Trends, which was published by the National Gang Intelligence Centre in 2011.
In it, the Juggalos were described as a "loosely organised hybrid gang" whose members were "expanding into many US communities".
It cited an incident in 2011 in which "two suspected Juggalo associates were charged with beating and robbing an elderly homeless man".
Another in 2010 detailed "a suspected Juggalo member" who was shot and wounded along with two other people.
The report included a photograph of a woman wearing facepaint similar to that used by Insane Clown Posse as she posed with a gun.
Insane Clown Posse go on to claim in the law suit that the band's music offered "hopeful, life-affirming themes about the wonders of life and the support that Juggalos give to one another".
The group filed a law suit against the FBI in 2012, seeking the documents that the bureau had used to reach its judgement of the Juggalos being classified as a gang.
Federal authorities filed a successful motion to dismiss this suit in August, saying that they had already shared much of this material.