I tried to look at this situation divorced from the individual identities of the people involved and actually worries me a lot. I considered if this situation could exist if priest, bishop, and cannon lawyers are all acting in good faith and obedience to the best of their ability. To the best of my knowledge it can.
The bishop can be acting in accord with policies set down for handling complaints. One of the policies might not allow the investigation to go forward with a civil lawsuit against the complaining party by the defending party. One of the other policies requires may require removing the accused priest from active ministry. Still another matter of discipline may make it illicit for the bishop to order the accused priest to drop his civil lawsuit.
Where does that leave them?
The bishop has his hands tied. Meanwhile, the priest is extremely vulnerable. If nothing changes there is a vicious cycle at work:
1.) Someone outside church discipline commits defamation and makes a complaint to the bishop.
2.) The accused is suspended pending investigation.
3.) The investigation forces the civil defamation charges to be dropped.
Then either:
4a.) The accused is exonerated after great suffering and the false accuser walks scot-free because the bishop has no faculties to punish them and the accused surrendered his rights in the civil courts that could punish them.
4b.) The accused in convicted and punished.
In the end, you have a win-win scenario for any malicious liar and a lose-lose scenario for the faithful. Given this, there is no reason for those with hearts filled with malice not to continually attack good and faithful priests when they provoke their ire.
The severity of the situation and its implications go far, far beyond John Corapi.
If a priest is innocent but bows to the vicious cycle then his ministry is over, his preaching silenced, and the machinations of evil will move onto assault the next priest, and the next, and the next after that. It is a recipe for the extermination of our Catholic clergy.
With that in mind, I think it would be most charitable not to vilify John Corapi or the bishop, to refrain from questioning their motives and holiness, and to refrain from telling them what to do. I pray that the system itself is either misunderstood or subject to review and reformation so that our clergy are not at the mercy of lose-lose vicious cycle.