The Milwaukee Catholic Archdiocese may ask a second court this week to review a ruling about cemetery funds and religious freedom. The issue could be key to the church's ongoing bankruptcy case and any settlement with clergy abuse victims.

About five years ago, the Milwaukee Archdiocese moved $55 million into a cemetery maintenance fund. (More money has been put in since then.) Creditors in the Archdiocese bankruptcy case filed two years ago would like access to the cemetery cash, and last week federal bankruptcy Judge Susan Kelley said the Archdiocese couldn't use religious freedom laws to shield the money. Jonathan Lipson is a former UW-Madison law professor now at Temple University. He says a federal religious freedom law may trump federal limits on fraudulent transfers, but not state limits: “... and the state law shouldn't be impaired. My guess is that's behind Judge Kelly's reasoning, and isn't out of the mainstream.”

But Professor Lipson says federal bankruptcy courts are considered subordinate to U.S. district courts, so he says he wouldn't be surprised if Archdiocese lawyers either appeal Kelly's cemetery ruling to a district judge or ask a district to take back the cemetery issue from Judge Kelly. Lipson says a district judge would have less discretion under an appeal. “If it's a withdrawal of reference, the district judge could treat Kelly's findings as a recommendation and not a final judgment.”

A lawyer for the cemetery fund suggests there are settlement talks going on in the Milwaukee case, but a spokesman for clergy abuse survivors says he isn't aware of any discussions.