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Ah, the crux of the matter. Who determines: legal basis
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You are right, of course. The legislature does, and the governor signs off on it, and it becomes law. Outside that, the police and courts have no authority to act.
We haven't been told what legal basis the police department thought they had. That remains to be seen, and is an important issue. Without a court order, or a warrant, my understanding is that generally they have to witness a crime being committed, or witness some clear and present danger to life, limb, or property in order to handcuff someone and haul them off. As far as we know at this point, none of those were present.
What they did was a major disruption of the man's life. You have to have an extremely clear and solid reason for making the level of intervention.
One problem, as fabs pointed out, is that the government has practically unlimited revenue, which they take from you and me. So the poor guy is paying his own attorney, and paying for part of Gaithersburg's legal bills, too. Still, I think the police department is in deep kim-chi.