US Federal appeals court judges have questioned the bankrupt Archdiocese of Milwaukee's claim that it needs all the money in a A$63 million trust fund to maintain its cemeteries, reports AP/Ucanews.
They have asked whether some could be used to compensate victims of clergy sexual abuse without violating the Catholic faith.
The three judges grilled attorneys on Monday in a dispute over a cemetery trust fund created by New York Cardinal Timothy Dolan when he was Archbishop of Milwaukee.
A federal judge in Milwaukee previously ruled the money was off-limits to the hundreds of sexual abuse victims who have filed claims against the Archdiocese in bankruptcy court. The lawsuit has potentially far-reaching consequences because many Catholic dioceses hold money in trust. A victory for victims in Milwaukee could pave the way for others elsewhere.
The appeal also has generated interest in legal circles because the Federal law cited by the lower court judge has been an issue in gay marriage, birth control, and other cases involving religion.
Attorneys came to the 7th US Circuit Court of Appeals in Chicago expecting to talk about the 1993 Religious Freedom Restoration Act, which protects religious organisations from government interference.
Trust fund attorneys claim the court-appointed committee that represents sexual assault victims and others owed money by the Archdiocese is an arm of the government. The committee's lawyers dispute this, saying the committee acts independently from the bankruptcy court and the US bankruptcy trustee who appointed it.