At the Wednesday court hearing in Oakland, state lawyers representing the DMV argued that its hands are tied. Federal transportation officials prohibited the agency in December from issuing non-domiciled licenses, saying the DMV had not complied with regulations.

The Federal Motor Carrier Safety Administration has threatened to decertify California’s entire commercial license program if it defies that directive, which could impact hundreds of thousands of drivers, according to the respondent’s brief.

“FMCSA has placed DMV in an impossible position,” attorneys for the state agency said. “Either stand by while thousands of eligible drivers have their non-domiciled CDLs cancelled, or expire, without being able to issue corrected or renewal licenses, or instead resume issuing these licenses and risk disenfranchising even more commercial drivers.”

The DMV initially planned to revoke about 17,300 of the licenses with expiration date errors in early January, and an additional 2,700 in mid-February. But after public outcry, it extended the deadline to March 6, to give federal officials more time to review corrective actions the state agency said it had taken.

Transportation Secretary Sean Duffy responded by announcing his agency would withhold $158 million for highway safety funds over California’s delay in revoking the contested licenses, a decision the DMV is fighting in court.

Schwartz said the DMV must give drivers impacted by cancellations an opportunity to reapply, according to state law. The details of how the agency plans to issue those licenses in a reasonable time, while taking into account federal threats, should be worked out by the two parties ahead of the March 6 deadline, she said.

Trucks leave the Port of Oakland on Sept. 28, 2023. (Martin do Nascimento/KQED)

Federal officials “have repeatedly threatened to decertify California or take away its funds. The court cannot ignore that,” Schwartz told the packed courtroom proceeding, attended by several Sikh business owners and community leaders from the Bay Area and Central Valley.

After the hearing, some said they felt hopeful, after months of stress and uncertainty for relatives and friends who feared losing jobs in the trucking and logistics industry, a major source of employment for the Sikh community.

Rajinder Singh said his trucking company stood to lose about 20 of 30 drivers who received DMV cancellation letters, including three cousins. The employees support families and owe loans for homes and trucks they’ve purchased, he said.

“If they don’t have a license, how can they work and make payments for the trucks, for the homes? It’s hard,” said Singh, who owns Flying Eagle Xpress, based in Tracy.