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Cards Against Humanity purchased the Cameron County land in 2017 in order to send a political message against then-President Donald Trump's border wall.
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Musk said he would also move his rocket company, SpaceX, to Texas.
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The lawsuit comes a month after Texas Parks and Wildlife unanimously approved a land exchange deal with SpaceX for nearly 500 acres.
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The rocket cleared the launchpad and separated from its booster, surpassing the first attempt. But minutes later, controllers lost contact with the vehicle.
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SpaceX is aiming at launching on Saturday, with the two hour launch window starting at 7 a.m.
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The failed launch of SpaceX's Starship rocket from Boca Chica in South Texas last week didn't just explode the world's largest rocket. It caused more environmental damage than expected.
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The monster-sized, stainless steel, uncrewed spacecraft cleared the launch tower but failed to separate from its booster, spinning in the air before succumbing to a blast of flames.
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Elon Musk brought a sink into Twitter headquarters on Wednesday, in anticipation of owning the social media company by the end of the week.
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SpaceX plans to launch rockets near Brownsville, Texas, and send the first person to Mars from there. Seven years after breaking ground, residents say the only thing skyrocketing is housing prices.
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If permitted by federal regulators, it will lift off from a beach-side facility at the southern tip of Texas. But residents and researchers have criticized the permitting process, saying the company has flouted rules at the expense of the environment and the community.