How would you react to an E2 who "smart mouths" you in formation?

That sounds like a sailor volunteering for every lousy detail/assignment that can be found for him/her.

Lol no comment

Make his life a living hell.

Hahahaha! You really don't want to know!!! It would offend your modern sensibilities. Keep telling yourselves the enemies are human...dumbasses.

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I'd Let Him Smart Off ONCE.....
He Can't Smart Off Twice
With A Broken Jaw While Getting
A Good Ass Kicking.

After the appropriate ass chewing and dispatch to work comes phase II. Generally on my duty day when I'm not leaving the ship anyway, I catch the young lad at the brow just at liberty call. Thats when I discover a special task that requires only his special abilities and talents which will of course be completed BEFORE liberty commences. Generally such tasks take till about 0300. I note that on the few occasions in my career when such "training" has been required I've never had to repeat it, moreover I note that the rest of the division is enlightened as well...

I would take them aside and remind them that this is not a democracy. You signed your name on the dotted line. You will do as you’re told or it can be handled through the UCMJ. There is a reason for discipline. I always had a reason for choosing who I gave a job to. Nobody can do the mission alone. It’s teamwork that makes it work

I WOULD TELL THEM THANK-YOU, NOW I KNOW HOW YOU FELL ABOUT IT.
THEN I WOULD WRITE DOWN WHAT I TOLD THEM TO DO, PUT IT IN A SEALED PACK AND TELL THEM PLEASE TAKE THIS TO MY HIGH UP. O BY THE WAY, I WOULD STATE IN IT I WAS TOLD TO DO SOMETHING I DO NOT FELL I SHOULD NEED TO DO, I THINK YOU SHOULD DO THIS FOR ME.
THEN SET BACK AND LET THE FIRE FLY.

Back in the day he'd be on shit barrel detail. If that didn't work he'd be walking point!

His disrespect was public so his reprimand should be in public. Not only does it correct bad conduct, it serves as a warning to all others that you won't stand for any disrespect.