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What do you think, is there a chance to put a big ol' smackdown on the ATF for illegal suppression of free speech in this case?
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I would not call it a smackdown in the grand scheme, but a hand slapping. Government agencies don't really fear such suits and this one will be paid out of proverbial petty cash (meaning only a tiny fraction of the ATF's budget). The plaintiff won't get a trillion dollars own the badges of everyone in the ATF.
Maybe a person or two will get a reprimand after the outcome of everything, but by and large the agency won't be truly hurt. Additionally, this would not appear to be a policy issue, but one of limited behavior by individuals. So it would be hard for the ATF to learn much from this incident if the incident was the result of rogue behavior of one or a few individuals.
I am not sure I understand why they are only arguing the First Amendment issue. From the sounds of things, there is a 4th amendment issue as well.