My guess is that a suit will need to be filed for compensation instead. I think the corrupt Mayor of corrupt NOLA said they are bankrupt, so it won't get far. Suffice to say while this is a very worthy cause, all it may result in is setting a precedent. Hopefully that will be enough to stop such idiocy in the future.
Generally it's true that you can't sue the government without their permission. However in this case, which is denial of rights case, the officials can be held individually liable. They'd better figure out how to get those firearms back into the hands of their rightful owners, or they'll end up paying for hundreds of guns out of their own pockets. Unless they have some sort of politicians equivalent of malpractice insurance, in which case their polices are about to be dropped or their premiums raised considerably. Couldn't happen to a nicer bunch. :)