Civil liberties campaigners told a New York court on Friday that the National Security Agency’s bulk collection of all US phone records violates the constitutional rights to freedom of association and privacy.

The American Civil Liberties Union called for the NSA's program, first revealed by the Guardian in June, to be ended, arguing that it breached the first and fourth amendments as well as exceeding the authority Congress gave to the government through the Patriot Act.

“This kind of dragnet surveillance is precisely what the fourth amendment was meant to prohibit,” ACLU deputy legal director Jameel Jaffer, said before the hearing. “The constitution does not permit the NSA to place hundreds of millions of innocent people under permanent surveillance because of the possibility that information about some tiny subset of them will become useful to an investigation in the future.”

The case, ACLU v James Clapper, director of national intelligence, Keith Alexander, director of the NSA and others, was filed in June, shortly after the Guardian published a top-secret court order requiring Verizon to pass personal call data from millions of its customers to the NSA “on an ongoing daily basis”. The revelation was the first in a series of articles exposing the scale of the NSA’s operations based on documents obtained by whistleblower Edward Snowden.

The ACLU is a customer of Verizon Business Network Services, which was the subject of the order issued under by foreign intelligence surveillance (Fisa) court.

According to the Snowden documents, the NSA receives massive amounts of “metadata” from the company including the numbers of both parties on a call, call duration, unique identifiers, and time of call. The contents of the conversation itself are not covered.

ACLU’s lawsuit argues that the government’s blanket seizure of its phone records compromises its ability to work with clients, journalists, advocacy partners, whistleblowers, and others.

In February, the supreme court dismissed the ACLU’s case challenging the constitutionality of the Foreign Intelligence Surveillance Act (Fisa), a case it filed in 2008 before the Snowden revelations. That suit was rejected on the grounds that the plaintiffs could not prove that they had been monitored. ACLU now argues that it has standing to sue because the Fisa court order showed that its phone records were collected by the government.

Earlier this week the supreme court rejected a request to review whether the Fisa court had exceeded its authority when it compelled Verizon to disclose the records. The request, made by the Electronic Privacy Information Center (Epic), a public-interest group dedicated to privacy concerns, argued “the production of millions of domestic telephone records that cannot plausibly be relevant to an authorized investigation.”

The court did not explain its reasoning but the government argued only it or the recipient of an order can seek review of an order. Other appeals are expected.

The legal challenges come as Verizon, AT&T and others are coming under increasing pressure to make more disclosures about their dealings with the NSA. Tech giants including Google, Facebook and Yahoo have increasingly spoken out against the NSA’s tactics and called for more disclosure. The telecoms companies have been largely silent.

Shareholder pressure groups are now calling for the telecom companies to release more details of the type and volume of information they give to the NSA. Activists including Trillium Asset Management of Boston and the $161bn New York State Common Retirement Fund have filed motions calling for AT&T and Verizon to release reports on the "metrics and discussion regarding requests for customer information by US and foreign governments."