There could still be appeals in store for this case, but regardless of the outcome of this case, CDL could still be quite legal (and I think ought to be -- libraries ability to lend out books without publisher permission or license has been a huge gain for society, and I think must be able to continue in the electronic realm; and I think there are good legal arguments for it, on extension of first-sale doctrine to electronic realm and on fair use).
It was not helpful for the case of CDL to have this pretty bad ("uncontrolled digital lending"?) case decided first though, I agree this was not a very strategic move.
The court's decision and conclusion is almost entirely about just regular CDL:
"This appeal presents the following question: is it “fair use” for a nonprofit organization to scan copyright-protected print books in their entirety and distribute those digital copies online, in full, for free, subject to a one-to-one owned-to-loaned ratio between its print copies and the digital copies it makes available at any given time, all without authorization from the copyright-holding publishers or authors? Applying the relevant provisions of the Copyright Act as well as binding Supreme Court and Second Circuit precedent, we conclude the answer is no."
(emphasis added)
"IA maintains that it delivers each Work “only to one already entitled to view [it]”―i.e., the one person who would be entitled to check out the physical copy of each Work. But this characterization confuses IA’s practices with traditional library lending of print books. IA does not perform the traditional functions of a library; it prepares derivatives of Publishers’ Works and delivers those derivatives to its users in full. That Section 108 allows libraries to make a small number of copies for preservation and replacement purposes does not mean that IA can prepare and distribute derivative works en masse and assert that it is simply performing the traditional functions of a library. 17 U.S.C. § 108; see also, e.g., ReDigi, 910 F.3d at 658 (“We are not free to disregard the terms of the statute merely because the entity performing an unauthorized reproduction makes efforts to nullify its consequences by the counterbalancing destruction of the preexisting phonorecords.”)."
CDL had been going on for years in a bit of a cold war. Publishers had a lot to lose if they lost CDL and just lived with it. When NEL happened, they decided to use their nukes. They had a rock-solid case against NEL, so might as well use it and try to take out CDL at the same time.
If they lost CDL but won NEL, they would be back where we've started for years.
It's not about CDL because it's very specifically focused on Open Library's specific implementation, Open Library. Nobody is suing Hoopla or OverDrive. The courts are openly acknowledging that by explicitly spelling out why this ruling only applies to Open Library and not to other well-known CDLs.
And the Emergency Library was just the concrete pressure pipe that broke the camel's back. Publishers and author's unions had reportedly been trying to negotiate with IA about OL all along, and EL was just the move that prompted them to stop playing nice and take it to court. The rulings don't need to focus on EL, though, because a ruling against the aspects of OL that are under contention would automatically apply to EL as well.