First you have to have a lawsuit to get a federal or state judge to give you clearance to sue a governmental entity. They have to decide wether gross negligence exisists so that the suit can proceede against the governmental body. Its a long and ugly process. At the core it is still a soverign immunity question as a barrirer until it is lifted.
Insofar as I recall, policing agencies teach their officers to control a situation at nearly all costs in order to preserve their own lives in a perceived threatening situation. A charging dog coming from the posession of the suspects in question is always a red flag if that dog is larger than about 25 pounds or a known fighting breed. The officer had two seconds to make a decision on the fly and it seems to have been an ill one in hindsight ... but im sure that a human running at him a that point would have fared no better.