I encounter to a dialog between two people while struggling on Cutting in line situation.

and here is the dialogues:

A: Hey man, the end of the line is over there.
B: Yeah...
C: No seriously, I was here first, and you can’t cut in the line like this.
A: Says who?
C: I do!
A: So sue me!
C: Alright...that’s it....

(and here they start to punching each other!!!)

When I see my dictionary it says that the meaning of sue is to make a legal claim against someone because they have harmed you in some way.

But I'm pretty sure that the Sue me expression has a different meaning in this context.

please help me out!