In this case, they absolutely did. They had a CDL in place specifically to comply with copyright law, and they willfully and intentionally disabled it.
The publishers also had arrangements with local libraries to expand their ebook selections. Most libraries have ebook and audiobook deals worked out with the publishers, and those were expanded during the lockdowns. Many of the partner libraries preferred those systems to the CDL because they served their citizens directly. A small town in Nebraska didn’t have to worry about having a wait list of 3000 people ahead of the local citizen whose taxes had actually bought the license the Internet Archive wanted to borrow.
The Internet Archive held a press conference right before the ruling comparing the National Emergency Library to winter-library lands, but that’s simply not accurate. The CDL they had in place before and after was inter-library loaning. The CDL was like setting up printing presses in the library and copying books for free and handing them out to anyone.
Under the existing CDL, they could have verified that partner libraries had stopped lending their phycical copies of the books and made more copies of the ebooks available for checkout instead of just making it unlimited and they’d have legally been fine, but they did not, and the publishers had every right to sue.
The publishes also waited until June to file suit: well-after most places had been re-opened for weeks.
IA does important work, but they absolutely broke the law here, and since they did it by intentionally removing the systems designed to ensure legitimate archival status and fair-use of copywritten works, they have pretty much zero defense. It wasn’t a mistake or an oversight. And after reopening they kept doing it for weeks until they were sued and were able to magically restore the legal system the same day the lawsuit was filed.