That's rough, I'm sorry to hear that. I saw your post last week about the client going sideways when you turned them down, sometimes people just have an axe to grind it seems.
Where did they leave the review? If they included personally identifying information (like with the emails they posted) you stand a good chance of being able to get it removed on Google at least. I'm one of Google's volunteers for their business forum, let me know if you'd like me to take a look and help push that through. Yelp has similar rules, but they're not great about enforcing them. WW and the Knot are even worse, I've talked to more than one business owner that's left both specifically because of decisions the sites made about leaving unfair negative reviews in place.
If it's on Google, getting a few new positive reviews can help push the negative one down a little bit. Might be a good time to follow up with old clients you've been meaning to ask. If it's on Google, use [this tool](grade.us/home/labs/google-review-link-generator) to make an easy link to send to people. One of the link options only shows the text box and review stars instead of the last few reviews left... you may want to use that link in this case.
You should leave a response. Not for the person in question, it sounds like they're out for blood, but this is definitely a branding opportunity for new clients looking up more information on you. How do you handle challenging situations like this? Will you fire back, or meet it with class and grace? If need be, have someone you trust help you craft the response. It's very challenging if you're personally feeling very upset by the exchange still. Defending yourself can easily backfire here.
Last piece... don't start a pissing war. They can always go and leave more negative reviews on other sites. Best case scenario is the review gets taken down in a few weeks when this person no longer cares, and your level headed response diffuses any short term questions potential new clients might have when seeing the exchange.