The court refused without comment to consider whether the Vatican has legal immunity over the sexual abuse of minors by priests in the United States, allowing a lower court suit filed in 2002 to proceed.
The plaintiff in the case, identified only as John V. Doe, was abused multiple times in 1965, when he was a teenager, by an alleged pedophile priest, Father Andrew Ronan, in Portland, Oregon.
Before being accused of the offenses in Oregon, Ronan, who died in 1992, allegedly sexually molested seminarians in Ireland and children in Chicago.
The Vatican wanted the federal courts to throw out a lawsuit that sought to hold the Roman Catholic Church responsible for moving Ronan from Ireland to Chicago to Portland despite the sex abuse accusations that trailed him from parish to parish.
But the nine US justices refused to consider the church's claim that it enjoys "sovereign immunity" and therefore is immune from prosecution. The Vatican had claimed immunity under the Foreign Sovereign Immunities Act of 1976, a US law allowing foreign states to avoid being sued in court.
An attorney for the plaintiff on Monday praised the "courage of the justices" in deciding against the Vatican. Six of the nine justices on America's highest court are Catholic.
"Today's action by the justices is an answer to the prayers of literally thousands of survivors of sexual abuse who finally have a real shot at obtaining justice, and the truth, about the complicity of Vatican leaders in covering up the criminal acts of Catholic priests against innocent children," said attorney Jeff Anderson.
"On behalf of the victim in this case, and all the courageous survivors who have suffered the denials of generations of Vatican leaders, we thank the justices for their courage to let this case proceed," he said.
"Finally, we have achieved a chance for justice, accountability and healing," said Anderson.
The Vatican said Monday that it would have no immediate comment on the ruling.
Meanwhile the attorney representing the church, Jeffrey Lena, downplayed the reach of the court's decision, saying that the heart of the defense case has yet to be adjudicated.
"What remains is to return to the district court, which is the trial court, and to carry on further arguments there," he said.
"The primary argument in the trial court will be that the priest in question is not an employee of the Holy See. That's the sole theory that remains that the plaintiffs have.
He added that "it has simply been determined that it is not appropriate for the Supreme Court to take this case," he said.
"The question of immunity remains before the district court."
The case is but one of numerous pedophilia scandals to rock the Roman Catholic Church over recent years in a number of countries including Austria, Belgium, Ireland, Pope Benedict XVI's native Germany and the United States.
During an April 2008 visit to the United States, Pope Benedict met with several alleged victims of abuse by priests, and expressed "shame" for the scandals, saying at the time that it was "a great suffering for the church in the United States and for the church in general and for me personally that this could happen."
The pontiff added that the Church would work to keep pedophiles out of the priesthood, saying "it is difficult for me to understand how it was possible that priests betray in this way their mission."
The Catholic Church in the United States has made some two billion dollars in settlements to alleged abuse victims since 1992.
Senior clerics have been accused of protecting the priests involved by moving them to other parishes -- where they sometimes offended again -- instead of handing them over to civil authorities for prosecution.
The pope, who has himself faced allegations he covered up the scandal, has repeatedly said priests and religious workers guilty of child abuse should answer for their crimes in courts of law.
SIC: AFP