Mahony, now head of the nation's largest Roman Catholic archdiocese, was a high-level administrator in the Fresno diocese during some of the years the two brothers who filed suit say they were molested by Monsignor Anthony Herdegen.
A three-judge panel of the 2nd District Court of Appeals ruled 2-1 Wednesday that Mahony's testimony indicates the church was or should have been aware that Herdegen might have been an abuser.
The brothers, George and Howard Santillan, filed their lawsuit in 2003 under a one-year window that voided the statute of limitations on old abuse claims in California.
The provision required plaintiffs to show that the church knew or should have known about priests' alleged misconduct.
A trial judge dismissed the claim, which alleged that Herdegen abused the Santillan brothers between 1959 and 1973, saying there was no evidence the church knew about it.
Mahony, however, testified in a deposition that a housekeeper who might have known about Herdegen's abuse would have been expected to tell church higher-ups.
Mahony was an administrator in the Fresno diocese from 1962 to 1980.
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