Mayor Ted Wheeler and hundreds of others were objecting to the presence of federal police sent by President Donald Trump, who labelled the demonstrators as “agitators & anarchists” after Mr Wheeler was gassed.
Meanwhile a federal judge has specifically blocked federal agents from arresting or using physical force against journalists and legal observers at the ongoing Portland protests.
The lawsuit was filed by the American Civil Liberties Union (ACLU).
US Judge Michael Simon previously ruled that journalists and legal observers are exempt from police orders requiring protesters to disperse once an unlawful assembly has been declared.
Federal lawyers had said that journalists should have to leave when ordered.
“This order is a victory for the rule of law,” Jann Carson, ACLU of Oregon’s interim executive director, said in a statement.
The ACLU lawsuit is one of several filed in response to law enforcement actions during the protests.
The state of Oregon is also seeking an order limiting federal agents’ arrest powers during the demonstrations.
On Wednesday night Mr Wheeler, a Democrat, appeared slightly dazed and coughed and said it was the first time he had been tear-gassed.
He put on a pair of goggles someone handed him and drank water but did not leave his spot at the front of the raging demonstration.
Protesters lit a large fire between protective fencing and the Mark O Hatfield Federal Courthouse as the federal agents deployed tear gas and stun grenades into the crowd.
It was not immediately clear if the agents knew Mr Wheeler, a 57-year-old sixth-generation Oregonian and longtime politician, was among those in crowd when they used the tear gas.
Earlier in the night, Mr Wheeler was mostly jeered by protesters as he tried to rally the demonstrators who have clashed nightly with federal agents.
But they briefly applauded when he shouted “Black Lives Matter” and pumped his fist in the air.
Mr Trump in a tweet attempted to ridicule Mr Wheeler, calling him the “Radical Left Mayor of Portland, who last night was booed & shouted out of existence by the agitators & anarchists.”
Mr Wheeler has opposed federal agents’ presence in Oregon’s largest city but has also faced harsh criticism from the protesters, who yelled and swore at him.
Ignoring the pushback, Mr Wheeler told those gathered outside the courthouse that he wanted to “thank the thousands of you who have come out to oppose the Trump administration’s occupation of this city.”
The Justice Department’s inspector general has said the agency will conduct a review of the conduct of federal agents.
Mr Wheeler has been accused by critics, including city council members, of not reining in local police who used tear gas multiple times on anti-racism protesters before federal agents arrived.
Department of Homeland Security acting Secretary Chad Wolf denied that federal agents were inflaming the situation in Portland.
He told “CBS This Morning” that Mr Wheeler legitimised criminality in the city by going to the front of the crowd of demonstrators where the fires were lit and that people were trying to pull down a fence erected to shield the federal courthouse.
Mr Wheeler did not participate in lighting any of the fires or attempting to tear down the fence and was surrounded by his security team when he was gassed.
The mayor’s appearance in the protest zone came hours after state attorneys for Oregon urged a judge to issue a restraining order against agents deployed to clamp down on the protests.
The arguments came in a lawsuit filed by Oregon Attorney General Ellen Rosenblum, who accused federal agents of arresting protesters without probable cause, whisking them away in unmarked cars and using excessive force.
Federal authorities have disputed those allegations.
The motion asks US District Judge Michael Mosman to command federal agents to immediately stop detaining protesters without probable cause, identify themselves and their agency before arresting anyone, and explain why an arrest is taking place.
