Some fans, called Juggalos, claim to have lost custody of children, lost jobs and been denied housing simply because they enjoy the music of the duo from the Detroit area. Another fan was told he couldn't apply to the Army without removing or covering Insane Clown Posse tattoos, usually a man running with a hatchet.
Justice Department attorney Amy Powell said the group and its fans have no standing to sue. She said the government is not responsible for how police agencies use information in the 2011 national gang report.
Powell said a "subjective chill" as alleged by plaintiffs was not enough to be in court.
"There is no general right of protection to a social association," she said, referring to First Amendment violations argued by Insane Clown Posse and its fans.