I know I can be quite stubborn - especially when it comes to "getting the bad guys win". I am a sucker for wanting justice to prevail. I am probably not the best person to listen to when it comes to matters like this because I would probably see a risk that things could kick off and escalate but still try to sort out what I think is right/just out of principle.
That being said, I think it's important to gauge how important this issue is to you. If it's something that is very important to you and you're willing to deal with things potentially escalating, go nuclear (and, for the millionth time, document it all). If it's something that you don't feel is big enough to warrant a rivalry over, just try to suck it up as best as you can (and kill her with kindness because I bet that would irritate the crap out of her)