Jim Shooter and Curt Swan pull off another unusual but very effective 2-parter, beginning in Adventure 359 (Aug 67), which sees the Legion outlawed, disbanded, and imprisoned.
The Legion return from a mission in space to discover that they have been outlawed, disbanded by the government, and their Clubhouse sealed. They are arrested for breaking a curfew none were aware even existed.
Duo Damsel gets the story from her parents. After the death of the president of the United Planets, his vice-president, Kandro Boltax (in his debut appearance) took the reigns of government. First he built a new water purification plant (gee, will that be significant later?), and then passed a number of draconian laws, including the ban on the Legion, which were supported en masse.
When Dream Girl foresees a monorail crash, a number of Legionnaires go into action to save the passengers, which results in them being arrested and sentenced to the prison planetoid, now called Takron-Galtos.
The ones who were not sentenced wind up in the middle of a riot, during which Princess Projectra is critically wounded, winding up in a coma.
Invisible Kid tries to keep the remaining Legion together, to figure out what is going on, but discovers that even his parents have turned against him, and are spying on him.
He leads the remainder of the team to RJ Brande, whose support founded the Legion, but even he has turned against them, and summons the Science Police.
On the run now, hiding out in the sewers, the Legion decide they must do whatever they can, willing to break the law to figure this situation out and return things to normal.
The story concludes next issue.