Can you sue eBay for telling me to ship a item that it was not paid for?

I'm new to ebay and the rep advised me to ship the item and once the delivery was confirmed, the funds would be released. The buyer requested refund after the shipment was made. Item is (iPhone 4s 16g) brand new. $450.00
Now eBay is telling me there sorry I was given that information.

Technically they did pay for it. If they are honest they will return it. If they aren't honest you will have problems. Of course you can sue. You will also spend 10 times what you lost just in attorney fees and court fees.

PayPal holds money of new sellers or sellers listing high dollar items. If you followed their rules and used signed delivery you can prove they received the phone. You can then file a police report to try and get it back. Chances are you won't but you can at least try.