OMG! I think I would probably would have thrown her little butt in the car and taken her to her mother. If you feel the need to tramatize someone it can be your mother not my child you sciopath.

That child would be in there room for the rest of the summer, she is 10 she knows better then that. Your 3yr old could have hurt herself in the bathroom alone especially in the dark. Ground her, stick her in her room and don't let her out except for meals. If SS hurts my daughter I already told DH there will be no mercy for him, he will be grounded and not allowed near her or he will go back to his moms and DH will have to visit with him at MIL's depending how serious the offence. But for this I would do the grounding.

Hmmm, well I think the age gap here is what makes this not quite right. A 10 year old should know better than to do that to a 3 year old. However, I will say that my cousins and I used to do things like that to each other--but we were all around the same age. Kids are mean to each other. I'm not saying that this is okay, but it doesn't sound like she was trying to hurt your daughter--just scare the poor thing. I was the eldest and I remember us older kids ganging up on the youngest and doing EXACTLY this to him. We got in a lot of trouble for it, but then later we'd go back to playing nice with one another. I dunno. I don't think you need to take it to heart unless there are other indications that she's trying to cause harm to your daughter. I'd talk to her about it and ask why she did that, explain that it's not okay and if she does anything like that again xx will happen.

The age diff is weird; but this kind of thing is typical. SD14 - BD12 - SD does this all the time to BD - since they have been 2 -4. I used to freak about it; of course DH wouldn't believe me!! "Not my princess!" Now that she (BD) is older; we have caught on to what a quiet Instigator SD is! She thrives on it, does it so well and then sits back and watches it explode! Dont' let it get the best of you..

This was the hardest part of having a step daughter. She is almost 3 years older than mine and she would take all her anger and frustration in life out of my girl. Sometimes she would get mad at me and go to my unsuspecting daughter and be just horribly mean to her, without my daughter having any clue of what had happened. Any good feeling and compassion I had mustered, would fly out the door in a second.
You have to protect your child, because they can be damaged by this kind of behavior. In the SK minds, they are helpless toward us in a way, so it makes sense to get to us through our children. Our kids become just collateral damage to them. I eventually expressed very clearly that as much as I wanted to have a good relationship with her, when it came to my daughter, every fiber of my body would want to protect her, and that would override everything else. It was not a threat, but an honest expression of a biological need. Then we worked on her not feeling so helpless . Now she is 18 and just recently us girls took a trip together and she told my daughter that she used to be so mean to her....It did not fix it, and some damage was done, but they have a good relationship now. Good luck to you and sorry you have to deal with this.