California's non-domiciled commercial driver's licence (CDL) program could come back to life if a federal appeals court in Washington rules against the Federal Motor Carrier Safety Administration (FMCSA) in two cases that have been waiting for a decision since September, the trucking publication Overdrive reported on November 4.
Source: Overdrive
The cases go to the heart of the biggest licensing fight in American trucking: whether the federal government lawfully shut down non-domiciled CDLs — licences issued to drivers who are legally present and authorized to work in the United States but are not U.S. citizens or permanent residents — and whether it lawfully punished California by withholding about $160 million in federal highway funding.
Source: Overdrive
The two cases the court heard in September
On September 15, the U.S. Court of Appeals for the District of Columbia Circuit heard contentious oral arguments in the challenge to FMCSA's non-domiciled CDL ban itself. On September 11, the same court heard California Department of Motor Vehicles v. U.S. DOT, in which California's DMV asked the court to vacate FMCSA's finding that the state's CDL program was noncompliant, and the funding penalties that followed. More than six weeks later, either ruling could land any day, Overdrive reported.
Source: Overdrive
In the California case, Deputy Attorney General Kristen Keo told the court FMCSA's final determination “must be vacated because it is contrary to law and arbitrary and capricious.” She said the determination cites just one basis for withholding $160 million: that the DMV had not cancelled approximately 20,000 licences whose expiration dates exceeded the dates on the drivers' legal-presence documentation.
Source: Overdrive
If the court both blocks FMCSA's rulemaking and rules that California complied with federal regulations, the state could resume issuing non-domiciled CDLs — and the licensing demand built up over a year of shutdown could return to California at once, Overdrive reported.
How the crackdown unfolded
The fight began in September 2025, when FMCSA moved to shut down non-domiciled CDL issuance for 97 percent of non-citizens and put California on special notice, finding substantial non-compliance in the state's licensing. The Transportation Department said California had issued more than 60,000 non-domiciled CDLs and that about a third were wrongly issued; a California Assembly committee analysis put the improper total at about 20,100 of the state's 65,000 licences.
Source: Overdrive
In November 2025 the D.C. Circuit blocked FMCSA's emergency rulemaking, but very few states resumed issuing. FMCSA returned with a final rule published February 13, 2026 and effective March 16, 2026, which limits non-domiciled CDL eligibility to three visa categories — H-2A seasonal farm workers, H-2B seasonal non-farm workers and E-2 treaty investors — and no longer accepts an Employment Authorization Document as proof. In May 2026 the court declined to pause the final rule while the challenge proceeds.
Source: CrossGov / FMCSA rule summary
California agreed to cancel about 17,000 licences FMCSA said were improperly issued, but when it missed the January 5, 2026 deadline, FMCSA issued a final determination on January 7 and withheld about $160 million. On March 6, 2026, the DMV cancelled about 13,000 licences — the number was lower than 17,000 because some drivers had since become permanent residents or citizens, downgraded their licences, or let them expire, FreightWaves reported. California also lost about $40.7 million in motor carrier safety grants in October 2025 over English-language enforcement, a penalty it has also challenged.
Source: FreightWaves
A national rule, not just a California fight
FMCSA's audits found more than 30 states issuing non-domiciled CDLs that ran past the expiration of drivers' work authorization. New York was also penalized — about $73 million withheld — and the Second Circuit heard New York's appeal on September 28. Nationwide, the final rule ends eligibility for about 194,000 current holders as their licences come up for renewal, if the courts let it stand.
Source: CrossGov
A California state court has separately ordered the DMV to let affected drivers reapply for their licences, but the DMV says it cannot reissue licences the federal rule now bars; applications can sit pending for up to a year while the federal legal fight runs its course.
Source: FreightWaves
Why Punjabi truckers are watching this case
California's Central Valley — Fresno, Stockton, Modesto, Bakersfield and Sacramento — is home to one of the largest Punjabi trucking communities in North America, and non-domiciled licences have been a route into the industry for many immigrant drivers. The year-long shutdown has left drivers unable to renew, carriers short of drivers, and freight capacity tighter; industry analyses say the rule's effect is already showing in spot-market rates. For drivers whose licences were cancelled in March, the D.C. Circuit's rulings are the difference between returning to the road and leaving the industry.
What happens next: the D.C. Circuit can uphold the rule, throw it out, or split the difference — for example, saving the rule while vacating California's funding penalty, or the reverse. If the court finds California cannot be penalized and no broader rule blocks issuance, California's DMV could restart a program that once issued tens of thousands of licences. Until the rulings arrive, the March 16 rule remains in force and states continue to enforce it.