According to the linked story at the time he said "so sue me" he had made ~$32k gross revenue and had no employees.
He made his $400k and hired the employee much later.
He made his $400k and hired the employee much later.
Unless you cause an egregious 50k+ of damage, suing is probably idiotic. And how can that even happen? The client would/should refuse to make the last payment if the work sucks. ("So sue me" works in both directions.) So it has to be a nearly complete fail for suing to make much sense.
It could be possible to run across a very incompetent executive who is desperate for a scapegoat...but that is probably rare. Such a suit is unlikely to see the inside of a courtroom, because it is a delaying tactic of an executive whose career is probably already circling the drain.