Twisted sister- In -Law

I have a sister in law that seems to get in fights a lot with people including other family members.
When she does, she expects my wife and my kids to take her side which means they cannot talk to, or see, the people she is fighting with or else she gets mad at them.

I told my wife to stop fighting her battles. We don’t know the details of her issues with other people so we can’t be expected to be involved. I wouldn’t ask the same if I were fighting with someone.

So there is a new years eve party coming up at a friend’s house and we’re invited but she isn’t- because she is fighting with the wife. She expects us not to go and has made it a big deal. She says that the party hosts are bad people. She says they hate us and that the wife has cheated on her husband and flirts with sister in laws husband.
If we go, she has said that she’ll reveal a secret that she thinks will hurt us. Not sure what it is. I told my wife to let her do it. No one will believe her anyway. My wife doesn’t want to lose her sister and wants to stay home or go out elsewhere.

I really don’t need advice here but feel free to give it. This is just a burden that I have to deal with. I know that eventually, once my wife stands up to her and lets her fight her own battles, it’ll all take care of itself. Just have to weather the storm.

I want to go to this party though.
I’ll probably confront sister in law ... again... and tell her to find a cliff and jump off. Will revert with results