Can a person from the US sue another person who is a citizen of England and has moved back to England?

You can sue anyone. The court may or may not agree with you and you may or may not be able to EVER collect, even if you win. In legal terms, "Sue", just means to ask. When you "sue" someone, you are just asking the courts to force someone to pay you. If the individual is in England the courts may decide that there is no way they could enforce anything they decide.