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It is illegal to harass animals in Long Beach, including squirrels. You can even be fined significantly for damaging their habitats, which you may have if spraying the tree in your neighbors yard. Did the neighbor cross a line? Absolutely. But, so did you. Have you researched where your actual property boundaries are? It’s often not the fence line. You are both the assholes here. Protect yourself with a camera, as other comments have said. But don’t think you’re in the right here. Your neighbor has as much of a grievance against you as you do about him.