She's "punishing" him. Mature, huh?

Do not start a war over how your step kid is acting when his father is right there to correct the kid on the spot. Taking the mother to task for not raising a 'proper' child is a direct insult and dig at her mothering skills. It is not your position in life as a step-mother to judge the mother. Like it or not you are powerless in this struggle - let the bios work it out. You'll get none of the credit if the kid turns into the politest kid in the world but all the blame if he continues being a snot.

Why start WWIII over such a piddling thing that Dad should have handled right from the get go? I.e. on the spot the moment it happened.

Like the Marine debating whether to charge a machine gun nest you got to ask yourself if this is the hill you want to die on? It's just not worth it over this kids mouth.

Stop communicating directly with the mother. Period. You have an issue you take it up with Dad in private and once he makes a decision you support him 100%.

I wrote this a long time ago and I hope this helps with your problem. It may not reflect your exact situation but you'll get the idea:
The situation with my step-kids finally got to the point where I decided that my efforts to raise them was futile.
First I told my wife in private what I was going to do and why.
Then I stopped investing myself, time and money in their upbringing. I realized that by conscious choice I could cease being responsible for them or their actions. Neither would I take credit for how they turned out, good or bad. I simply stopped interfering in their lives. This is not to say if they would start a fire on the living room floor I would not intervene. But if they did not do the laundry as scheduled I ignored it. Nor did I do any of their chores. If the trash overflowed in the kitchen - well tough. Mom dealt with it when she got home.
You will be absolutely amazed at the look on a kids face when s/he realizes you don't care enough to even tell their bio-parent they did something wrong. And you'll be amazed at their future behavoir and attitude towards you.
I stayed friendly enough and taught one how to drive when she was old enough. But they could no longer blame me for the consequences of misbehaving just because I saw the misbehavoir. I never told. If they were caught in a infraction it was not my fault. They began to realize that they were responsible for their actions because of what they did not because I caught them.
I would talk to my wife in private if I had issues, but once she made the decision I backed her up 100%.
Once the kids realized I was no longer the ogre they thought I was their attitude changed. I was not their friend, but neither was I the enemy. They came to realize that I had not done those things to irritate them. They in fact missed the things that they had come to depend on me doing. Permission to go to the mall when their Mom was not home? "Sorry, can't do that".
Their mother slowly came to realize that I wasn't overreacting to their actions. In fact I wasn't reacting at all. She came to understand that she would have to control the situation and she did.
With that things got much easier around the house.
Billions of kids grew up in the world without help from me and turned out just fine.

yes she is punishing him. bm over, well i used to send nasty text messages to her each time she acted like a fool (all the time) and she would 'punish' me by not taking sd for her weekend. this was when sd actually gave a shit about bm.

Maybe mom took the phone away from her.

Did he try calling the house phone or mom's cell?

I believe that you are right to act as a team, some people say oh you can't say anything their not your kids, I say its my home too and if its effecting me, I will voice my opinion, you did say the right thing to sd, now it is her choice to learn a bit of respect or not bother to visit, you and your hubby would be remiss if you did'nt teach her this, how far do disrespectful people get in their lives, not far! So good for you, in my opinion you have absolutely done the right thing.