Lindner testified that he did not molest William Lynch, 44, who was on trial for charges related to a May 2010 assault at Lindner's retirement home in Los Gatos.
Lynch said Lindner raped him when he was 7 and forced him to perform sexual acts with his brother, who was 4 at the time. A jury in July acquitted Lynch of felony assault charges and deadlocked on misdemeanor charges, which prosecutors later dropped.
District Attorney Jeffrey Rosen said that prosecutors believe that Lindner was untruthful on the stand, but said, "Perjury is not merely lying under oath."
The district attorney's office released a four-page report this afternoon on the decision not to charge Lindner, calling perjury "a highly technical criminal offense that requires several elements to be proved."
Prosecutors said they would not be able to prove beyond a reasonable doubt that the information in Lindner's testimony was material to the case, meaning it would have influenced the outcome of the trial.
The district attorney's office "argued truthfully that the alleged sexual molestation was not relevant to the ... felony assaults other than providing motive," the report stated.
"So, to turn around in a perjury case and argue to the contrary -- that the former priest's testimony about these events was so central that it would probably have affected the verdict -- would be inconsistent and constitute questionable prosecutorial conduct," the report said.
Rosen has said he is willing to work with Lynch, who was unable to pursue child molestation charges against Lindner because they were reported after the six-year statute of limitations on such crimes.
"We have heard Mr. Lynch. His story of abuse is powerful. We hope it lends strength to our ongoing effort to end the statute of limitations on child molestation so we can bring more molesters to justice," Rosen said in a statement today.
The Catholic Church in 1988 reached a settlement for more than $600,000 with Lynch and his brother in connection with the abuse allegations.