The Espionage Act of 1917 is what aided in such a thing happening. It was requested by Woodrow Wilson in 1915 during the State of the Union:

There are citizens of the United States, I blush to admit, born under other flags but welcomed under our generous naturalization laws to the full freedom and opportunity of America, who have poured the poison of disloyalty into the very arteries of our national life; who have sought to bring the authority and good name of our Government into contempt, to destroy our industries wherever they thought it effective for their vindictive purposes to strike at them, and to debase our politics to the uses of foreign intrigue...

In 1940, the Alien Registration Act, or Smith Act was passed as a result of the rising popularity of communism in America. It required all foreign nationals to register with the federal government, and made it a crime to "knowingly advocate...overthrowing the Government of the United States". Supporting communism became perceived as supporting the overthrow of the United States government.

In 1947, President Truman signed Executive Order 9835, which aimed to determine how "American" all federal employees were, as well as to root out Soviet spies.

In 1950, Congress passed the McCarran Internal Security Act despite President Truman's veto.

The Act required Communist organizations to register with the United States Attorney General and established the Subversive Activities Control Board to investigate persons suspected of engaging in subversive activities or otherwise promoting the establishment of a "totalitarian dictatorship," either fascist or communist. Members of these groups could not become citizens and in some cases were prevented from entering or leaving the country. Citizens found in violation could lose their citizenship in five years. The Act also contained an emergency detention statute, giving the President the authority to apprehend and detain "each person as to whom there is a reasonable ground to believe that such person probably will engage in, or probably will conspire with others to engage in, acts of espionage or sabotage."

As a result of the act, even picketing a federal courthouse became a felony. This act resulted in the requirement for Communist registration.

These acts, combined with the rise in popularity of McCarthyism, the harsh policy towards communism and communists, branding them "un-American" and suspecting each and every one of them as spies for the communist countries, especially the Soviet Union, made the fifties a hostile time towards communists.

So, to answer your question: it was legal because they made it legal. The constitutionality of a lot of these acts was called into question.

I'm not sure about specifically the US, but I would hazard that that in terms of legal justification the same reasons were given as were used in Canada with the infamous Section 98. Because the Communists (Specifically the center in Russia no matter how separate the local communists were or whether they disavowed violence) believed in violent overthrow of the government they were considered to be a threat to the state and its democracy. In addition, in both countries, their status very often as atheists, and their hatred of the capitalist system and bourgeois democracy made it very easy for them to be painted as a threat to the American or Canadian way of life.