Neighbor retaliating over noise complaint by suing to rehome my Irish Wolfhound (claiming it's a "wolf hybrid")

Location: Oregon.

Hey all, I'm not much of a social media person but I really need some advice. For some background, me(31) and my husband(32) have been living in our house ever since we got married 6 years ago. A few months ago, some new people moved in to the back of us, so our backyards touch. My house has a large, 6 foot tall privacy fence around it because I have a 13 month old, 132 lb Irish wolfhound in which I do confirmation shows with.

But back to the topic with the neighbors, a couple weeks ago, they were throwing a party on a Friday. It went super late, to about 4 am. They were blasting very loud music in their yard and lighting up fireworks. I didn't mind this at first despite being a light sleeper, I assumed it would be a one off thing, but it continued the next night. Then it continued Sunday night. It was getting to be too much, I had work the next day that I had to wake up at 6 am for, so I went over at about 12 pm nicely asked if they could stop with the fireworks and turn down their music a little bit. I didn't want to see rude about it, I was just so tired. One of the people that lives there, a man who seems to be in his mid 20s, just started cussing me out. I just thought it was a lost cause so I went home. They just then turned the music louder. I then made a call to the non emergency line for the police for a noise complaint. The police came and then they quieted down.

A little later, I was walking my dog, who, as I mentioned, is an Irish wolfhound, a very large breed. I remember mentioning the breed to one of the neighbors shortly after they moved in. I guess they latched on to the "wolf" part, and when I walked it by their house, a woman who lives in their house came out and claimed she doesn't want me to walk him by their house because she feels threatened by a "wolfdog." I tried telling her that my dog isn't a wolf, he's a wolfhound, the "wolf" comes from the fact they were bred to hunt wolves, like how coonhounds were bred to hunt raccoons, they aren't part raccoon. I also mentioned I have his pedigree on record as he was from an akc registered breeder and there isn't an ounce of wolf in him. When I told her this, she just scoffed and said she used to go camping with her dad and she knew what wolves look like and my dog was a wolf(seriously Google Irish wolfhounds, they don't look like wolves at all). I didn't want to deal with this so I walked off.

Now comes two days ago, I got a letter in my mailbox. They are filing a lawsuit against me and my husband saying my dog is a "public nuisance and a dangerous wolf-dog hybrid" and it's illegal to own him. They also claimed he lunged at him over the fence, at first I had no idea what this was referring to but my neighbors next door have 3 young kids that are always playing catch with a baseball in their backyard no matter the weather, so balls come over the fence a lot. Out of sheer boredom, I trained him to hop up on the fence and throw the ball back over. I wonder if they witnessed this or something then just ran with it. They are asking a judge to order the dog to be rehomed or euthanized.

I'm terrified. I can't lose him. He is 100% purebred, he himself is AKC registered, his breeders are, also IWCA registered as well, all vaccinated, and is just big, not scary. He is not a wolf at all. He wouldn't hurt a fly. My questions are:

1. Can a judge actually order my dog to be taken away based on a neighbor's completely fabricated lie?

2. Do I need a lawyer for this, or can I just show up to court with his AKC papers and vet records?

3. Does their retaliation for a police noise complaint help my case at all?

I love my dog more than anything and I haven't slept since I got these papers. Any advice on how to handle this would be appreciated.

Also side note, I do not have any security cameras, if that makes things harder, please tell me.