Most states have pretty well-established law stating that one of the defenses to a defamation suit is “privilege” – meaning in this context the right to talk about the plaintiff. The privileges are either absolute (meaning defendant wins) or qualified (meaning defendant might win depending on the circumstances).
A good example of the absolute privilege is the witness testifying in court. He’s immune from a defamation suit because otherwise everyone would be afraid to testify, since the person he’s testifying against could sue him. In order to allow witnesses to testify freely, they are privileged from defamation suits for what they say.
Similarly, a qualified privilege attaches to people who have a common interest in the subject matter of the conversation. “Interest” in this context means it’s important to the speaker and the hearer. So, for example, if I tell my boss that my co-worker is driving the company truck while drunk every week, my co-worker can’t sue me for defamation, because I and our boss share a mutual interest in the subject matter: the boss needs to know that my co-worker is driving the company truck while drunk, and I need to report it to the boss. So I’m privileged from a defamation suit.
It seems to me that “cooperation with a church investigation” into alleged molestation counts for qualified privilege purposes. The bishop needs to know about accusations of molestation, needs to conduct an investigation, and needs to act to protect potential victims of molestation. Similarly, members of the bishop’s flock need to report suspected molestation to their bishop so he can protect their fellow parishioners.
So – in general, because the article isn’t very specific – I’m not at all surprised to hear that a defamation case gets thrown out when the allegedly defamatory statements occurred during the course of a church’s internal investigation into accusations of molestation.
Otherwise, who would cooperate with the investigation?