In November, the archdiocese sued the transit agency for rejecting its Christmas fundraising ads which showed a biblical Christmas scene with the message, "Find the Perfect Gift."
A federal judge sided with Metro Transit last December, and the appellate court upheld that ruling when the archdiocese attempted to have the lower court's opinion blocked.
Metro Transit bans any ads that promote or oppose religion. The ads proposed by the archdiocese left out the name of Jesus but featured a silhouette of shepherds walking under twinkling stars.
In its original lawsuit against WMATA, the archdiocese argued that there were no explicit references to religion; comparing its campaign to approved displays by the Salvation Army, another faith-based group that advertises around Christmas. But the Salvation Army's ads feature the organization's famous red kettles, which Metro deemed to be a "secular symbol of the holiday season."
The Justice Department, on Tuesday, filed a brief in support of the church, arguing that Metro committed "unconstitutional viewpoint discrimination" when it denied the archdiocese's ads.
"Had Macy's, for example, sought to run a Christmas-themed ad stating, 'Find the Perfect Gift,' and displaying an image of its jewelry, nothing in the guidelines would prohibit the company from doing so," the government's brief reads.
"But because the Archdiocese's proposal arguably conveyed the implicit message that 'JESUS is the perfect gift,' WMATA rejected it. An ad proclaiming that the perfect Christmas gift is jewelry and another that the perfect Christmas gift is Jesus obviously offer competing perspectives on the meaning of the holiday, yet WMATA permits only the former," the brief continued.
The Justice Department issued a statement saying it filed on behalf of the archdiocese to "commemorate Religious Freedom Day."