But supporters of the monsignor said they were elated at the news.
"I think that this case will give other prosecutors around the country pause to reflect on who is really accountable for the damage that may have been done to victims of sexual abuse," said Joe Maher, founder of Opus Bono Sacerdotii, a Detroit organization that provides assistance to accused priests.
Lynn, 62, was the first Catholic Church administrator in the country to be charged with covering up child sex abuse.
Nearly 18 months after he went to prison, his lawyers persuaded a Superior Court panel that prosecutors and the Philadelphia trial judge misapplied the state's child-endangerment laws. They contended that the laws in place when he was secretary for clergy in the 1990s and early 2000s applied only to those who directly supervised children, and the higher court agreed.
Marci Hamilton, a lawyer who has represented abuse victims suing Lynn and the Philadelphia archdiocese, called the decision a "very technical reading of the law."
The Rev. Christopher Walsh, who two years ago was among the founders of a fledgling Association of Philadelphia Priests, said the decision was far from a victory in an "ugly chapter" in the life of the archdiocese.
The decision "wasn't about whether he did something right or wrong. It was whether he did something that he could have been prosecuted for," Walsh, pastor of St. Raymond of Penafort in Mount Airy, said, noting that he was not speaking for other priests. "There's not a sense we're getting past this."
Some advocates called for stronger child-endangerment laws.
"The issue - and this is an issue that's much broader than this case - is whether the laws are adequate to deal with what we're seeing in the Archdiocese of Philadelphia and elsewhere," said Terry McKiernan, who runs Bishop Accountability, a website documenting abuse by priests.
Hamilton said she worried prosecutors would "struggle" to bring other church administrators to trial in the wake of the decision.
Maher said the ruling was just. "You're asking someone else to be accountable for something someone else did," he said.