The legal dispute between New York State and the US Department of Transportation over commercial driver’s licenses issued to non-domiciled individuals is heading to federal court.
New York Attorney General Letitia James announced that her office has filed a lawsuit in the Second Circuit Court of Appeals challenging the DOT’s decision to withhold around $73 million in highway funding.
The federal action relates to commercial driver’s licenses that the government says were improperly issued to non-domiciled individuals.
New York Governor Kathy Hochul described the DOT decision as political payback, arguing that the state has always followed federal rules when issuing CDLs.
She said removing funding for road safety upgrades is reckless and illegal.
The lawsuit argues that the Federal Motor Carrier Safety Administration based its decision on an incorrect interpretation of long-standing regulations governing non-domiciled CDLs.
New York also claims the agency failed to acknowledge that its interpretation represents a major change in position and did not properly consider the reliance interests created by previous federal oversight.
FMCSA, however, rejected New York’s arguments in an April 16 letter to Hochul and Mark J.F. Schroeder, the state’s Commissioner of Motor Vehicles.
The agency said prior annual reviews do not prevent it from enforcing safety rules if noncompliance is later identified.
A key issue in the dispute relates to how New York handled renewals of expiring CDLs for non-domiciled drivers, especially when assessing Employment Authorization Documents.
FMCSA said the state is required to review lawful presence documents at every transaction, including renewals.
New York’s case will now test whether the federal government’s action was a lawful enforcement measure or an improper shift in regulatory interpretation.
