A three-judge panel of the Court of Appeal on Wednesday unanimously rejected a challenge to the 2005 assessment by a Sonoma County environmental group called O.W.L. Foundation.
The group's name is an acronym for open space, water resource protection and land use.
State law requires public water agencies to prepare a water supply assessment analyzing the sufficiency of future water supplies for certain types of projects.
The project in the case is known as the University District, proposed for 1,610 housing units and 250,000 feet of commercial space. The developers are University District LLC and Vast Oak Properties L.C.
In 2005, the Rohnert Park City Council approved a study that concluded groundwater supplies over 20 years would meet the needs of the project.
The O.W.L. Foundation and three citizens claimed in a Sonoma County Superior Court lawsuit that the study didn't adequately consider the entire Santa Rosa Valley groundwater basin.
But the appeals court said an assessment "need not analyze groundwater pumping by all users in an entire basin."
The panel overturned a decision in which Superior Court Judge Knoel Owen ruled in 2006 that the study was inadequate.
The appeals court said a water supply assessment "serves the limited function of providing information about groundwater sufficiency for a specific, proposed development project." It said there are other legal mechanisms for regulating regional water supplies.
Tammy Jones, a lawyer for the foundation, said she could not comment on whether the group is likely to appeal further to the California Supreme Court.