Non-Domiciled CDL Battle Shifts Into High Gear

The U.S. Court of Appeals for the D.C. Circuit heard arguments Sept. 11 in a dispute over the Federal Motor Carrier Safety Administration’s decision to withhold approximately $160 million from California. The funding action is tied to the state’s handling of more than 17,000 non-domiciled commercial driver’s licenses.

Dispute centers on California CDL enforcement

Transportation Secretary Sean Duffy announced in January that FMCSA would withhold federal funds after determining that California had failed to cancel non-domiciled CDLs the agency considered improperly issued.

Non-domiciled CDLs are issued to certain drivers whose permanent domicile is outside the United States. The federal government has argued that states must verify a driver’s lawful presence and ensure that the credential’s validity does not extend beyond the driver’s authorized period of stay.

During oral arguments, Justice Department attorney Simon Jerome, representing FMCSA, questioned whether states should be permitted to issue multi-year credentials when the underlying immigration or residency document expires much sooner. California has challenged the agency’s enforcement position and the resulting funding penalty.

Federal rules narrow eligibility

The regulatory framework for non-domiciled CDLs has changed significantly. Recent federal actions narrowed eligibility and added requirements affecting how states issue and renew the credentials.

FMCSA has also directed states to review previously issued licenses. The agency identified instances in which licenses were issued beyond the expiration of a driver’s lawful presence, without adequate proof of lawful presence, or to lawful permanent residents who were eligible for standard CDLs.

The enforcement shift has also affected drivers already holding commercial credentials. The U.S. Department of Transportation has reported that more than 28,000 drivers were placed out of service since June 2025 for failing to meet applicable requirements.

Questions remain about safety data

Federal officials have cited cases involving alleged CDL fraud and undocumented drivers in describing the enforcement effort. However, the Federal Motor Carrier Safety Administration does not track crash involvement by citizenship or CDL category, making it difficult to draw direct safety comparisons between non-domiciled and U.S.-domiciled CDL holders.

Industry groups have called for states to review and revoke improperly issued non-domiciled CDLs while avoiding unnecessary re-certification for qualified drivers. Other proposed changes include stronger standards for entry-level driver training providers and additional oversight of state licensing practices.

The D.C. Circuit’s decision will help determine whether FMCSA acted within its authority when it withheld California’s federal funding and required the state to address the disputed licenses.