The Federal Motor Carrier Safety Administration’s audit of non-domiciled CDLs found that 30 states were issuing licenses for a time that surpassed the expiration date of the applicant’s work authorization in the U.S.
FMCSA said that only two states – California and New York – failed to cooperate, leading to the decision to withhold federal funding from each state. The agency withheld about $160 million from California and about $73 million from New York.
Both states have appealed the agency’s ruling in federal court. The U.S. Court of Appeals for the District of Columbia Circuit heard California’s case on Sept. 11, and the U.S. Court of Appeals for the Second Circuit heard New York’s case on Monday, Sept. 28.
Anthony Raduazo, an attorney representing the state of New York, told a panel of judges that FMCSA held substantial funds without any explicit requirement for the states’ CDL expirations to match work authorization expirations.
“Federal respondents have found the state of New York in substantial non-compliance for the first time in the 40-year history of the state’s commercial driver’s license program,” Raduazo said. “That determination is based solely on a purported failure to comply with an expiration rule for non-citizens that doesn’t exist in any federal statute or regulation, is not memorialized in any guidance documents and has never been enforced by the federal respondents. That determination is arbitrary, capricious and contrary to law.”
One of the judges asked if a requirement in a regulation can be implied, or if it has to be explicitly expressed.
In a situation where an agency is withholding funds from a state, Raduazo said the requirement needs to be clear.
“If FMCSA wanted to condition the receipt of federal funds on this type of requirement, they needed to do that expressly,” he said.
Simon Jerome, the attorney representing the U.S. Department of Transportation, pointed to the regulation’s use of the word “unexpired.”
Jerome said that the context of the regulation and the use of “unexpired” implies that lawful presence should last for the duration of the CDL being issued.
Later on, Jerome noted that the funding was withheld from New York and California because they failed to resolve the problem.
“This issue of expiration date non-compliance was rampant and no other states have reached the point of final determinations,” Jerome said. “Many of those states across the country worked with the agency to address the agency’s concerns.”
‘Failed to revoke’
In April, Transportation Secretary Sean Duffy announced that FMCSA was withholding about $73 million in highway funding for failing to revoke “illegally issued” non-domiciled CDLs.
According to an FMCSA audit, the New York Department of Transportation had been routinely issuing CDLs to foreign drivers in violation of federal law. The federal audit revealed a 53% failure rate in the sampled records.
New York Gov. Kathy Hochul quickly pushed back, saying that the federal cuts were nothing more than “political payback.”
What’s next?
The three-judge panel will review the arguments before deciding. Following oral arguments, it typically takes months for an appeals court to issue a ruling. Around the same time, the D.C. Circuit should issue a ruling in the case involving California. LL