Four US-Muslim groups had filed the suit in a Los Angeles district court to protest against a controversial round-up last week of men from Arab and Muslim nations without permanent residency status.
PLAINTIFFS
Immigration lawyers said as many as 1,000 men who had voluntarily come to register themselves in accordance with an anti-terror scheme were detained, although federal officials said fewer than 250 had been held.
The lawsuit seeks a block on further such detentions by the Immigration and Naturalization Service (INS).
But Justice Department lawyers said the federal district court had no jurisdiction to review decisions carried out by the body.
That power is reserved for the Supreme Court, the lawyers argued.
'Scam'
Civil liberties groups in the US have already called on the Justice Department to scrap the scheme, which was conceived after last year's hijack plane attacks on New York and Washington.
REGISTRATION ORDER
The programme is aimed at men from more than 20 Arab and Muslim nations who do not have permanent resident status in the US.
Critics say it is unlikely that the terrorists the scheme is supposed to uncover would take part in a voluntary registration programme.
"The effort to deport law abiding people who could just as easily be allowed to continue the immigration process seriously undermines prospects for future compliance and constitutes an absurd waste of resources," the four groups filing the suit said in a statement.
"The mass arrests have further eroded confidence in the fairness of the INS and the immigration system among Arab and Muslim communities."
Later dates
The detentions have caused deep unrest within the Iranian-American community in California, with thousands taking to the streets last week in protest.
California is home to about 600,000 Iranians who have been living in exile since the 1979 Islamic revolution.
California was among the first states where non-resident men from the Middle East were obliged to register.
Other states with large Muslim populations have been set later dates.