New York argues its $73 million CDL case before the Second Circuit

New York took its turn in the federal CDL fight on September 28, when a three-judge panel of the U.S. Court of Appeals for the Second Circuit heard the state's appeal of FMCSA's decision to withhold about $73 million in highway funding over non-domiciled CDLs.

It is a sibling of the D.C. Circuit battle in this morning's edition, but a different dispute: FMCSA's audit found 30 states issuing licenses that ran past the holder's work authorization, and only California and New York "failed to cooperate," drawing withholdings of about $160 million and $73 million respectively. New York's audit sample showed a 53% failure rate. New York attorney Anthony Raduazo argued the agency acted under an expiration rule "that doesn't exist in any federal statute or regulation, is not memorialized in any guidance documents and has never been enforced," calling the state's first "substantial non-compliance" finding in the program's 40-year history arbitrary, capricious, and contrary to law. DOT attorney Simon Jerome countered that the regulation's use of the word "unexpired" implies lawful presence must last for the CDL's duration. The D.C. Circuit heard California's case on September 11.

Rulings typically take months — so unlike the non-domiciled CDL ban case that could land "any day now," this one will not be resolved quickly.

Why it matters

Two federal appeals courts are now simultaneously second-guessing FMCSA's CDL crackdown — one that could rewrite the rules overnight, one that decides whether the agency can cut off highway money to states that push back. Both outcomes shape the driver market into 2027.