Courts review FMCSA funding cuts over non-domiciled CDL rules

Federal courts are reviewing decisions to withhold highway funding from New York and California. The cuts target how both states issue commercial driver licenses to non-domiciled drivers.

A federal audit found that thirty states issued licenses that expired after the drivers work authorization ended. Only New York and California did not fix the problem. The agency removed about $73 million from New York and about $160 million from California.

Judges heard arguments in both cases in September 2026. The Second Circuit reviewed the New York case on September 28. The D.C. Circuit heard the California case on September 11. Both panels will issue written decisions in the coming months.

New York lawyers argue that no federal law requires a commercial license to match a work permit expiration date. They state the funding penalty lacks a clear legal basis. Attorney Anthony Raduazo told the panel that the agency's determination is "arbitrary, capricious and contrary to law."

Department of Transportation lawyers point to the word unexpired in federal regulations. They say the term means lawful presence must cover the full license period. The agency noted that other states corrected their records after being contacted.

The court decisions will clarify whether states must match license expiration dates to work authorization periods. Carriers hiring drivers in these two states should monitor the rulings for changes to licensing requirements.

Source: Land Line — https://landline.media/new-york-takes-turn-in-cdl-court-case-with-fmcsa/