A suit against Google was dismissed by a Philadelphia judge. The judge didn't discuss fair use doctrine--which is one of Google's two main legal claims supporting their project--at all.
Epstein's prediction was that east-coast courts would be unfavorable to the Google Library project because that area is the seat of the publishing industry. Though Epstein specifically mentioned the suit in the Southern District of New York, my guess is that he'd classify Philly as east coast. Maybe Google will have an easier time that Epstein thought.
See the article on WSJ here.