Spokane, Wash. ? A federal judge rejected a $45.7 million settlement Thursday for 75 people who have filed sex abuse claims against the bankrupt Roman Catholic Diocese of Spokane.

U.S. Bankruptcy Judge Patricia Williams threw out the agreement during a telephone conference hearing, according to lawyers who took part. The judge urged the dozens of lawyers representing the diocese, victims, parishes and other parties to enter into mediation.

The judge, noting that bankruptcy law calls for settlements to be “fair and equitable” to all parties, decided the deal favored the 75 people over other alleged victims, lawyers for both sides said.

The deal, announced earlier this year, was controversial from the start because it covered only a fraction of those who had filed lawsuits contending they were abused by priests in Spokane. About 185 individual claims have been filed against the diocese, although Williams has said some are duplicates and others are invalid.

The diocese filed for bankruptcy protection in 2004, citing abuse claims of about $81.3 million against assets of about $11 million.

Spokane is one of three U.S. dioceses that have filed for bankruptcy because of the abuse crisis.

Mike Ross, a member of the Spokane chapter of Survivors Network of Those Abused by Priests, who would have been covered by the diocese’s settlement offer, said the judge’s ruling will ensure everyone gets compensated.

“I think it’s positive. All victims need to be compensated for their pain and suffering,” he said.

However, David Clohessy, national director of the survivors group, said by e-mail from St. Louis that the judge’s rejection of the diocese’s offer will hurt victims who thought they would be compensated.

“Our hearts ache for the dozens of deeply wounded and still hurting victims who thought a deal with the bishop was a deal,” Clohessy wrote.

“Equality is a valuable goal, but so too is healing and closure.”