I came across a dialog between two people struggling on a cutting the line situation. Here is the dialogue:

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

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

When I looked it up in 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!