There’s a particular kind of tension that builds when a federal agency tells a state it isn’t doing its job — and the state fires back in court. That’s about the current situation between Washington and two of the biggest states in the nation, as a wide-ranging dispute over commercial driver’s licenses has simultaneously spilled into several federal courtrooms.
Did New York and California correctly follow federal regulations when granting commercial driver’s licenses to non-domiciled applicants, many of whom were undocumented immigrants? This is the main question, which sounds almost procedural. But underneath that narrow legal question sits something messier — a collision between state-level immigration politics, federal transportation law, road safety concerns, and the kind of institutional mistrust that tends to end up in litigation.
New York filed suit in the U.S. Court of Appeals for the Second Circuit after the federal government moved to withhold nearly $74 million in highway funding, citing what the Department of Transportation and the Federal Motor Carrier Safety Administration called “substantial noncompliance” in the state’s CDL program. California is under similar strain. Both states contend that the federal crackdown is unlawful and motivated by politics. Washington hasn’t said much publicly, but the agencies involved have been consistent in describing a structured, tiered approach to enforcement — starting with funding penalties before escalating further.
The Small Business in Transportation Coalition was then established. In early June, the group filed a separate petition asking the U.S. Court of Appeals for the D.C. Circuit to go much further than withheld funding. It wants the court to order Transportation Secretary Sean Duffy to formally decertify New York and California’s CDL programs entirely — stripping both states of their authority to issue commercial licenses at all. The SBTC’s argument heavily relies on statutory language, which states that once a significant noncompliance finding is made, the secretary shall forbid a noncompliant state from issuing CDLs. “No discretion,” they contend. The meaning of the word “shall” is clear.
According to federal audits, about 25% of California’s non-domiciled permits and licenses were not in compliance. New York’s was more than 55%. It’s difficult to write off those figures as clerical noise because they are substantial.
Less than two weeks had passed since five people, including two children from a Massachusetts family, were killed in a bus accident on Interstate 95 in Virginia. The SBTC directly cited that collision, claiming the driver had a CDL from New York even though he did not meet the English language proficiency requirements that federal regulations specifically require of commercial motor vehicle operators. The driver, who was born in China and currently resides on Staten Island, is accused of five felonies related to involuntary manslaughter. Additionally, the larger network of bus operators associated with the company in question is being examined by federal investigators.
The SBTC is not an impartial party in this case, it should be noted. The coalition has a strong stance on immigration and licensing policy and has been advocating for decertification measures since at least May 2025. That doesn’t make their legal argument wrong, but it’s context worth keeping in mind when weighing the rhetoric around public safety.
In May, the Supreme Court rejected Florida’s request to sue California and Washington directly for similar CDL-related allegations. That case was sparked by a 2025 fatal crash in Florida involving a truck driver who had entered the country illegally and held a California-issued license. The Court’s rejection didn’t resolve the underlying legal questions — it just kept them out of one particular venue.
What makes this moment feel genuinely significant is the scale. Following changes to federal regulations on non-domiciled licensing, twenty-four states and the District of Columbia were first identified as being in substantial noncompliance. Most worked their way back toward compliance. Depending on who you ask, New York and California emerged as the main holdouts due to either administrative shortcomings, principled opposition, or a combination of the two.
It’s still unclear if the Second Circuit will support New York in preventing the funding withholding or how the D.C. Circuit will react to the SBTC petition. It’s obvious that this fight isn’t ending amicably. The legal pressure is intensifying, and the crashes have increased urgency. The meaning of “shall” will eventually need to be determined by the courts, and states may discover that this word has implications.
