An association of more than 500 of the government's administrative law judges charged in U.S. District Court here yesterday that the Reagan administration has set illegal quotas on how many Social Security disability cases each judge must hear each month and how many must be decided in the government's favor.

In a suit assigned to Judge Joyce Hens Green, the Association of Administrative Law Judges, which represents about 540 of the more than 800 administrative judges in the Department of Health and Human Services, said the quota system and performance ratings based on it illegally infringe on judges' independence and deprive persons appealing benefit denials of impartial hearings.

The administration has been involved in almost continuous controversy over efforts to prune the Social Security disability rolls of ineligible recipients. The stepped-up cost-cutting process began in the Carter administration; the Reagan administration has continued it.

The association, headquartered in Kansas City, said HHS Secretary Richard S. Schweiker and Social Security Administration officials have developed a performance rating system which requires judges to hear a quota of cases each month and to decide no more than two-thirds of those cases against the government.

Based on these ratings, the association said, the Social Security Administration has asked the Merit Systems Protection Board to remove three judges for unsatisfactory performance.

The MSPB, which also is named as a defendant in the suit, has not acted on those requests, one lawyer said last night.

Administrative law judges make up the largest single judicial corps in the country.

Under a 1946 law, they are appointed by the heads of various federal agencies, such as the Social Security Administration, to hear appeals from agency decisions. They cannot be removed from their jobs except for "good cause," the association said in its suit.

The lawsuit was filed for the association by Elliot L. Richardson, former secretary of the Department of Health, Education and Welfare, predecessor to the Department of Health and Human Services.

The association said that last year administrative law judges decided 55.2 percent of the cases before them in favor of claimants. Judges who decide more than two-thirds of the cases in favor of the claimants or do not handle a minimum number of cases a month--about 45, one source said--are subject to unsatisfactory ratings and removal proceedings, according to the suit.

In addition to the three judges against whom removal action is pending, the association said that Social Security Administration officials have "threatened" other judges, telling them they will be removed or "otherwise penalized if they do not . . . dispose of more cases . . . and/or decide a greater percentage of cases so as to deny benefits."

Claire DelReal, HHS deputy assistant secretary for public affairs, declined to comment yesterday on the association's allegations. "We never comment on litigation," DelReal said.