thanks for watching. "nightline" is next. good night. tonight on "nightline," retail wars. martha stewart back in court. why two huge companies are fighting over who gets to sell her wares. can her company and her reputation rebound from this latest legal wrangle? tragic mistake? tonight, "nightline" investigates. a woman told she had breast cancer has radical surgery. but now a renowned doctor says she never had cancer at all. it's not as rare as you may think. joke's on you. the quip that set taylor swift ablaze. america's pop sweetheart is

striking back. just one of the celebrities who is not laughing. >> keep it right

from new york city, this is "nightline" with cynthia mcfadden. >> good evening, and thanks for joining us. martha stewart, all things domestic was in court again today where two huge department stores, macy's and jcpenney's, are slugging it out about who has the right to sell her products. and as you will see, stewart is as feisty as ever. abc's dan harris has more. >> reporter: there she was, one of america's most enigmatic and influential women yet again mobbed by cameras coming out of a courthouse in manhattan. this time, she was recording right back.

>> don't step on my foot. don't break my ankle. >> reporter: it was classic martha stewart, alternately tuttuting at camera men, refusing to answer questions, getting annoyed when the bodyguards try to put her in the wrong car, and then once again for good measure, sniping at the photographer. nearly a decade after she was convicted of lying to investigators about a stock trade. >> today is a shameful day. >> reporter: stewart is back in the middle of a major court battle, the latest fascinating chapter in a career that keeps rising and falling like a souffle. this is a big deal for martha stewart. we're talking big dollars and we're also talking about her reputation. >> reporter: this time, stewart, who is 71, is in the middle of a fight between two powerful suitors, the heads of macy's and jcpenn jcpenney. it's gotten emotional. macy's' chief executive terry lundgren choking up on the

stand, accusing stewart of breaching a contract to sell her goods exclusively in his store. the contrasts here are deliciously absurd. this trial involves allegations of ruthless sharp-elbowed business deals over such products as linens, stationary, curtains and kitchenware. martha stewart has been accused of tough business tactics right from the start of her storied career. she worked as a model, then started a catering business, and went on to build an empire, best-selling books, a tv show, housewares. her daughter would later write a tell-all book saying much of this was a facade, that at home there were no prepared foods in the fridge and sometimes no costumes on halloween. at the height of stewart's powers, the debacle. prosecutors charging her with selling shares of flailing biotech company inclone based on inside information. a woman worth hundreds of millions of dollars skirting the law to save just $40,000.

at first in this infamous cbs interview, stewart refused to talk about it. >> i want to focus on my salad. >> reporter: then she fought the charges and lost. >> and i'll be back. >> reporter: five months in the clank. her company's stock tanked, as she told abc's cynthia mcfadden in a "nightline" interview. >> how much money? >> reporter: did i lose? it's inestimable. probably more than a billion dollars. of course. >> more than a billion dollars? >> yes. and if you add in what the company was worth, absolutely. i'm a major shareholder in the company. >> reporter: many thought she'd crumble in prison, but no. the other inmates called her m-diddy and she became their informal spokesperson. when she got out, she mounted an aggressive comeback campaign. >> i don't think i was a broken woman. i did what i had to do and came

back and right into a company that had not failed, despite the wishes of some that it would. >> was it humiliating? >> no. no. no. i was never humiliated. >> reporter: terry lundgren says he played a huge part in resuscitating her brand, by bringing her into a more upscale environment than k-mart. >> you haven't seen anything yet. >> reporter: where she had been previously hocking her wares. he thought they were friends, they even went to haiti together. he also thought they had an exclusive deal. but then he got a phone call from stewart saying she was doing a separate deal with the ceo of jcpenney ron johnson. fighting back tears on the stand, lundgren said that call made him sick to his stomach. when she took the stand this week, stewart said she did not believe she broke her contract with macy's. "it just boggles my mind that we're sitting here in front of you, judge."

jcpenney, which is also being sued by macy's, naturally agrees with martha stewart here. ultimately, a judge will decide. does she look like she's going to win or lose here? >> i think the court will ultimately rule that some of what she's trying to sell at jcpenney is covered by her contract with macy's. and as a result, that she can't do it. but not all of it. >> reporter: but the real issue for stewart may be can her image sustain another hit? some experts say sure. she made it through going to prison. can she make it through being accused of, you know, having really sharp elbows? >> you know, i think people used to think that martha was nice. i think they've gotten over that. she's somebody whose style authority they trust, whose aesthetics they admire. that i think is the retail appeal of her. less about her individual qualities. >> reporter: still, if martha stewart was hoping to use her testimony to seem more

relatable, there was at least one misstep. when asked whether customers would be willing to buy her products from two stores at the same time, she said, and i quote, "they might have two houses." for "nightline," in is dan harris in new york. up next, did a tragic medical mistake change one woman's life forever? and why it may not be as rare as you think. abc news "nightline" brought to you by etrade. . that's not much you think. except it's 2% every year. does that make a difference? search "cost of financial advisors" ouch. over time it really adds up. then go to e-trade and find out how much our advice costs. spoiler alert: it's low. really? yes, really. e-trade offers investment advice and guidance from dedicated, professional financial consultants. it's guidance on your terms, not ours. that's how our system works. e-trade. less for us. more for you.

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consider the stunning statistic -- one in eight women will develop invasive breast cancer during her lifetime. little wonder so many of us make the annual trek to get a mammogram, thinking that if something is detected, surely a biopsy will determine whether it's cancer or not. but if you think a biopsy is as simple as black and white, think again. as judy valencia's story will show you in tonight's "nightline investigates." >> reporter: it's not something most of us look forward to. but just like 37 million other women who get a routine mammogram every year, it was now my turn. i was lucky enough to be at one of new york city's premier hospitals, the mount sinai medical center. >> it hurts a little bit. it's uncomfortable. but it feels like it's something you need to do for yourself. 700 miles away in saginaw,

michigan, judy valencia has been vigilant about getting her mammograms. >> my sister had breast cancer, my mother had breast cancer and my three aunts also had breast cancer. >> while i got good news, judy wasn't so lucky. >> i went for another mammogram to make sure and after that they sent me for a biopsy. it was very painful. >> based on that biopsy, judy was told she had cancer. >> there's nobody that questions a biopsy and gets a double check. >> but women must get second opinions, says dr. elissa port, one of the nation's leading breast surgeons. have you ever had a woman come to you who said i have been diagnosed with breast cancer, and be ready for surgery, and discover she didn't have it at all? >> absolutely. i mean, we -- first of all, they never even get close to an operating room. but we see patients all the time that come in with their diagnosis and their report saying breast cancer. we pass the slides off to our

pathologist who sends me back a report a day later saying i don't agree, this is not cancer and it's very clear cut that it's not. and that's probably one of the most critical pieces of information. that's why no one even gets near an operating room until those slides are reviewed. >> so we're in the pathology laboratory where we process tissues that come from surgery or from biopsies. >> dr. ira blywise is one of the country's leading pathologists. he says because mammograms have become better, diagnosing breast cancer can actually be more difficult these days. he showed me an example. >> this is a core biopsy of what i'm certain to the radiologist was an irregular solid mass. >> so this is a lump in someone's breast, but not detectable by the woman probably. >> that's correct. >> no question in your mind about this one. >> no, absolutely. this is an easy case.

>> easy to diagnose. but all cancers are not the same. so this is a tough one. >> yes. >> why? >> because the changes very subtle. >> every pathologist might not see it the same way. >> that's correct. >> how often do you get presented with a slide like this one, which is really iffy? >> oh, every day. >> every day? >> yeah. that's a very common occurrence in my practice. >> before you're going to perform surgery on someone, you want a better reading of that biopsy than it's just having gone to some general lab that does kidneys and gallstones. >> right. and i think it's not only the lab. how can a person who does one mastectomy a month do it as well as someone who does ten a week? these are things that are subject to interpretation and more expertise in making that interpretation is better. >> but many local hospitals don't have specialized breast pathologists and surgeons.

in 2006, one mie lhighly regard study warned the error rate in diagnosing breast cancer could be as much as 4%, which means as many as 10,000 women each year could be misdiagnosed, which brings us back to judy valencia. after her diagnosis, she was told she had two choices -- a lumpectomy to remove the cancerous portion, or a mastectomy to remove her entire breast. panicked because of her family history, judy chose the most extreme course. she decided to remove both breasts, the one with cancer and the one without. >> i just wanted it to be done. i didn't want to have to worry about going through this again. >> as painful and as disfiguring and as radical a step as it is, at least it seems like okay, case closed, i'm breast cancer-free. >> exactly. >> you were cancer free. >> i was cancer free. and there was no radiation to be had.

or chemo. i was great. a good day. >> judy and richard have been married for 39 years. richard says he supported his wife's decision to remove both breasts. >> i watched a number of her relatives pass away because of it. that's why she discussed about having a double mastectomy, that i went along with it. i would rather have my wife here. than lose her. >> this is all my paper work. >> in the months that followed, judy says she couldn't get paper work from the hospital for her insurance, so she hired a lawyer. her lawyer suspected something was wrong and sent judy's original biopsy for a second opinion to dr. blywise back at mount sinai. in his opinion, judy never had breast cancer. >> i went to the lawyer. he said he had good news and he had bad news for me.

and i said well give me the good news first. he said the good news is, he says you are cancer-free. you have no cancer. never had cancer. >> well, because it wasn't just that you didn't have cancer. it's just that you had never had cancer. >> never had cancer. >> that's right. judy had both breasts removed and was now being told she had never had breast cancer at all. judy's lawyer says it was a mistake that should never have happened. >> the pathologists at this institution had doubt about what they were looking at. when they wrote their report, they didn't have clarification. they gambled. judy valencia lost. >> there are people who do get misdiagnosed based on someone not having that expertise to know what they're looking at. it is important to stack the odds in your favor. putting together a team that deals with this a lot, and this is what they eat, sleep, and breathe is taking care of patients with breast cancer, or

who think they might have breast cancer. that's how you stack the odds in your favor. >> judy valencia's second opinion came too late, but she says she's now telling her story in hopes that other people will learn from her ordeal. you're going to have to live with the mistake for the rest of your life. >> nothing's the same. but i can hug my grandchildren and i'm here and i'm cancer-free. >> the doctors at mount sinai say a second opinion does not have to cost a fortune. often it's just a matter of sending your slides to an expert. next, the price of fame. stars like taylor swift aren't taking the joke sitting down. you should know that axiron is here. the only underarm treatment for low t. that's right, the one you apply to the underarm. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied

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they sure seem to have it all. fame, money, and all that it can buy. so should stars also have thick skins? well, a fish bowl life is part

of the deal, right? maybe not. many big names, including taylor swift, are fighting back for a little respect from those making jokes at their expense. "nightline's" juju chang reports. ♪ i say i hate you we break up you call me i love you ♪ >> reporter: taylor swift got rich and famous for penning addictive tunes about love and heartbreak. crowds cheered at the grammys when she dished out "we are never ever getting back together." and her real life whirlwind roman romances, most recently with a kennedy grandson, and then with one direction heartthrob harry stiles, keep her constantly in the tabloids. but all that soul-bearing may come at a cost. it all started at the golden globe awards when the queens of comedy tina fey and amy poehler teased swift about her love life.

>> you know what, taylor swift? you stay away from michael j. fox's son. >> reporter: this week, we discovered swift didn't take kind tloi the joke, responding to it in the new issue of "vanity fair" by referencing a quote she loves. there's a special place in hell for women who don't help other women. but hollywood observers say that comedians and their celebrity punch lines are well aware of the rules of engagement. >> you're fair game if you go on the awards show. they're going to make jokes about you. it's par for the course. it's part of being here. >> reporter: it can be the price of fame. >> you get rewarded greatly. you live a life most people could never dream of. you have enormous riches. you have to learn by that point to brush off criticism. you have to have a very thick skin. you have to have a very thick skin to even make it. >> reporter: roasting celebrities has become a signature move at awards shows, like ricky gervais, who notoriously skewered the a-listers at last year's golden globes. >> many of you know him from the betty ford clinic and los angeles county jail.

please welcome robert downey jr. >> reporter: gervais tells "nightline" he makes no apologies. >> that wasn't a room full of injured soldiers. >> give me the idea just how young she is, it will be 16 years before she's too old for clooney. >> reporter: and the megastar took it in stride. as for swift's counteroffensive, poehler couldn't resist a retort. i feel bad she was upset. i am a feminist and she's a young and talented girl. that being said, i do agree i am going to hell. but for other reasons. mostly boring tax stuff. perhaps the whole mean affair will wind up as fodder for swift's next number one hit. ♪ why you gotta be so mean >> reporter: for "nightline," i'm juju chang in new york. >> fair question. it's time for tonight's closing arguments. when the president and congress couldn't agree on how to reduce the deficit, spending cuts were made across the federal

government, even at the white house. in fact, the recent sequester has prompted the cancellation of much sought after white house tours. a move some say was unnecessary overkill. what do you think? should these tours be chopped? you can weigh in on the "nightline" facebook page or tweet us. thanks for watching abc news. "good morning america" will be waiting for you in the morning. we're always online at abcnews.com. good night, america.