Monsignor William Lynn, 63, the former secretary for clergy in Philadelphia, had been convicted of endangering children by transferring an abusive priest in the 1990s to a new parish, where he abused an altar boy.
Lynn was the first U.S. church supervisor charged for his handling of sex abuse complaints against clergy. Prosecutors warned that people across the country are watching to see if the case holds up.
But an appeals court threw out his case last month, saying Lynn should never have been charged because the law only applied to those directly responsible for the child victim. Lynn was freed after 18 months in prison and remains on house arrest at a rectory.
However, prosecutors appealed that Superior Court ruling Monday to the Pennsylvania Supreme Court.
"The message sent by the Superior Court's published opinion in this high-profile case is therefore a dismal one - victims of child sexual assault at the hands of pedophile priests who reluctantly come forward may do so in vain," Assistant District Attorney Hugh J. Burns Jr. wrote in the 39-page appeal brief.
He said the trial judge correctly handled the case and said Lynn could have been convicted as an accomplice.
Educational or religious leaders in such cases "often benefit from an institutional policy of concealment," Burns wrote. The reversal of Lynn's conviction, he added, "calls into doubt the ability of the criminal justice system to hinder such institutional wrongdoing."
A previous district attorney in Philadelphia had pursued the case and decided no church officials could be charged under existing law. State lawmakers then amended the child endangerment law in 2007.
Defense lawyers have long argued that the existing laws did not apply to Lynn, but Common Pleas Judge M. Teresa Sarmina sent the case to trial last year. Lynn spent several days testifying, saying he did his best to help children as well as the problem priests.
"Had Monsignor Lynn shown even a scintilla of courage or compassion, Lynn could have blown the whistle on this horrific, extensive and devastating cover-up," Karen Polesir of the Survivors Network of those Abused by Priests said in a statement Tuesday. "Instead, he opted to protect his career and his bosses' reputations."