A Stanislaus County superior court judge appears to have cleared the way for housing construction at the controversial Diablo Grande development in the hills west of Interstate 5, near Patterson. Judge Donald Shaver said Stanislaus County may permit construction that would be served by water sources that have been "fully and adequately reviewed under CEQA." Project proponents contend the Oct. 1 ruling allows them to pursue the first phase of the project, which amounts to 2,000 homes, two golf courses, a hotel and a winery. The county Board of Supervisors is scheduled to consider the matter November 9. Originally, the Fifth District Court of Appeals ruled that the county's EIR for the project was inadequate because it deferred analysis of water supply issues. Developers had proposed various water transfers from Central Valley farmland. That case, Stanislaus Natural Heritage Project v. County of Stanislaus, (1996) 48 Cal.App4th 182, has become known as Diablo Grande I. After the county revised the EIR, a second round of litigation (Diablo Grande II) commenced. In July, Judge Shaver ruled that the revised EIR still did not adequately address water supply. (See CP&DR Legal Digest September 1996, August 1999.) However, the court determined two sources of water, an 8,000 acre-foot transfer from the Berrenda-Mesa Water District and about 500 acre-feet of groundwater, have been adequately reviewed under CEQA and found to be secure, said Rick Jarvis, an attorney for the developer. Assistant County Counsel Vernon Seeley agreed that the October 1 ruling lets the county approve portions of the project so long as supervisors allow for public input and make certain findings. The consolidated cases are California Farm Bureau Federation v. County of Stanislaus and Protect Our Water v. County of Stanislaus, Nos. 181448 and 181472.