The state has been ordered to reduce the inmate population by nearly 10,000, but Gov. Jerry Brown and lawmakers are fighting against an early release of inmates, saying it would jeopardize public safety.
Brown and state lawmakers want a three-year delay to give proposed rehabilitation programs time to work. Under a new state law, the alternative is to spend $315 million this fiscal year to house thousands of inmates in private prisons and county jails.
Federal judges granted the delay until late February. The deadline could be extended further if enough progress is being made.
The court ordered the mediator to provide a mid-November update to say if negotiations are still productive.
The Associated Press contributed to this report.