It all started over 37 years ago when Master Cheng Yen went to visit a disciple's father at a clinic in Hualien, a city in eastern Taiwan. When the Master came out from the ward, she saw a pool of blood on the floor. A woman told her the blood had been left by an aboriginal woman who had suffered through a difficult labor for three days. Her husband and three friends had carried her for eight hours from her home in the mountains to the clinic, but in the end they had to carry her back since they could not pay the required security deposit of NT$8,000 (then US$200). Because of this tragedy, the Master vowed to build a hospital that would never ask for a deposit. Miraculously, the Master carried out her vow and established the Hualien Tzu Chi General Hospital twenty years later in Hualien.

Controversy arose when Lee Man-mei, the woman who told the Master the story, inadvertently identified the doctor as Dr. Chuang Ju-kuei during an interview in 2001. Dr. Chuang, 85, has been bedridden due to a stroke, but his daughters decided to sue both the Master and Lee for defamation on his behalf. They claimed that the "pool of blood" story had been fabricated by the Master in an attempt to raise funds for Tzu Chi.

The court stated that when Lee told the story, she said, "The aboriginals went away because they did not have $8,000," but when the Master retold the story to the public, she said that the aboriginals had to leave because they could not pay the $8,000 "deposit." The court ruled that the Master's version of the story had tarnished Dr. Chuang's reputation.

Tzu Chi members and three attorneys hired by Tzu Chi voiced their perplexity. The judge had already acknowledged the pool of blood as a fact, so wouldn't the point be to prove whether the doctor had refused to treat the woman, not whether or not the word "deposit" had been used? Furthermore, Lee, the one who mentioned Chuang's name, won her civil case, but the Master, who had never once in the last 37 years mentioned Chuang's name, lost. Many of the Master's disciples urged her to appeal since they believed that she would be more likely to win if the case were brought to the higher courts.

On September 17, however, the Master announced that she had decided not to appeal, for prolonging the case would run against her philosophy of gratitude, love, and tolerance. She wrote in a public statement: "My personal credibility is a minor thing. Wasting time and money that could be used for social work is a much bigger issue. Besides, I cannot bear to see an appeal putting further pressure on Dr. Chuang's children and I am reluctant to see the elderly Lee Man-mei running back and forth serving as a witness in court."

The Master also explained that she had tried to reconcile with Dr. Chuang's family outside of court, but she was forced to give up the idea when they demanded that she admit in public that she had fabricated the "pool of blood" story. "A sad historic event can be forgiven, but it cannot be twisted," remarked the Master. "No particular person should be held accountable for the social hardships and helplessness of the poor which constituted this historical tragedy four decades ago... So long as such tragic events do not occur again, so long as the helplessness and frustration of the weak and poor receive the attention and care that they deserve, I can ask for nothing else."

Regarding the hefty damages, the Master said that she and the 120 other Tzu Chi nuns would raise the money by working overtime daily making extra candles for sale.

When they heard about the Master's decision, the Chuang family decided that they would donate the money back to Tzu Chi

In the end, the Master has wisely taught us all that understanding and accommodation, not confrontation, are the most effective solutions for tackling disputes. She once said, "Even when justice is on your side, speak softly." If we insist too strongly that we are right, we hurt our relationships with others and thus create bad karma. Once again the Master is setting a good personal example of practicing what she preaches, even when it hurts.