If you’ll permit me to broaden the question to “why are political subdivisions allowed to sue each other?”, then the answer often is two-fold: 1) political subdivisions are incorporated entities under the law, so they have a right to pursue redress in front of a higher court, and 2) when the higher power is unclear about the division of rights to the subdivisions, then only a court can dispense the issue.

For #1, this is the same power which allows a city, county, municipality, special district, state, and sometimes the federal government to obtain an enforcement order against an individual or company. An example would be an injunction to stop dumping more toxic waste into a river. It should be clear that if a city, county, or state was dumping toxic material into a river, the higher level of government would want to stop that too.

For #2, ambiguity is rife when it comes to poorly drafted legislation or decisions which “passed the buck” far into the future. Historical examples involving borders include the British Partition of India or the Delaware Wedge, the latter which was in dispute for nearly 300 years. You can also find examples in international law, such as whether or not certain islands count as territory for the purpose of extending a country’s Exclusive Economic Zone.

In the Delaware Wedge case, because the matter involved three or four US States, the matter would ultimately have to be adjudicated by a federal court, either directly before the US Supreme Court or through arbitration under the auspices of the court. Alternatively, Congress potentially could have settled the matter forthright, but since the dispute predates the founding the union, Congress probably thought the states would quickly work it out on their own.

Here in California, we see some similar misgivings between the state’s own political subdivisions, with a recent example where a county District Attorney brought suit against the most populous city within that county, alleging that state law was being violated.

As for how a county is allowed to prosecute a state law violation, and why a city can be a target or such prosecution, we need to briefly look at the structure of California governance. Despite what some critics have suggested, California is not a homogenous, unitary state with a singular political and social identity. Rather, it may be one of the most decentralized states in the union, with cities with populations in the low hundreds to the low millions, all coexisting within one set of general state laws.

The state’s primary subdivisions are the counties, which divide all the land into 58 counties. Counties are responsible to citizens within their borders, authorized to write and enforce laws, except that county laws don’t apply within incorporated borders. That is, cities.

In essence, the incorporation of a city creates an enclave within a county, and while the state limits what categories of laws a county may author, cities have much more “home rule” authority. This is what allows the City of Los Angeles (pop. 3.8 million) and Amador City (pop. 200) to have similar powers yet clearly applied much differently. It would be a madhouse in the state Legislature if every city needed custom legislation to enable them to serve their people appropriately. So California just lets the cities do their own thing, within reason.

In terms of enforcement, to prevent overworking the state Attorney General, enforcement of the state’s laws are delegated to the county District Attorneys. These 58 attorneys wield the power of the state within their county borders, such as brokering a plea deal or bringing enforcement lawsuits.

The safeguard is that the state Attorney General can – at any time – take over an ongoing prosecution from the county DA. For example, investigations involving city police misconduct are now by-default taken away from the county DA and investigated by the state AG, because of a historical pattern of police being too cozy with the DA.

In the earlier case where the county sued the city within in, the state AG could have also taken that case away. But seeing as the case was already slipshod, the AG probably just decided to let it run its course, where a judge would likely dismiss it.

TL;DR: political subdivisions do weird things if no guardrails exist or if no other alternative appeara

If two states disagree, what alternative would you suggest? “Flip a coin and move on” or “Just give in to the other side” are solutions that are likely to be abused: one rogue state can wreck havoc by making unreasonable demands. Going to war over it seems worse than spending millions in court. The courts ARE our inexpensive, fair way of resolving disputes (even if they aren’t as inexpensive as we might like).

Under a federation the subdivisions aren’t just “convenient units”, they should be able to behave in their own interest. And when the interests of different units conflict, they got to solve it some way.

Suing each other might look like a waste of money, but it’s less wasteful than the alternatives, and still respects the principles of a federation (as having the central government dictating it out of the blue deprives the states of agency).

For reference, a century ago my homeland (Paraná) was disputing area with another state (Santa Catarina), even if both are controlled by the same federation (Brazil). The legal dispute lasted so long that it enabled a civil war, since neither side was properly supporting the population dislodged by a railway company.

then why don’t you get to a bit lower level and say “who do people of same country have to sue eachother?” it’s the same thing

There are 2 states. One directly down river from the other. The up river state passes a law allowing toxic substances to be dumped directly into the river that the down river state gets its drinking water from. Without the courts, what recourse does the down river state have?