New York Sues DOT Over $73M Highway Funding Penalty for CDL Policy

Key Details New York's Attorney General Letitia James filed a lawsuit in federal court challenging the Department of Transportation's decision to withhold $73 million in highway funding. The action stems from the DOT's claim that New York improperly issued commercial driver's licenses to non-domiciled individuals in violation of federal regulations. Why It Matters Governor Kathy Hochul called the funding penalty "political payback," arguing that New York has consistently followed federal CDL issuance rules. The state claims the previous Trump Administration verified this compliance year after year. Losing $73 million could impact critical road safety upgrades across the state. New York's Legal Position The three-page lawsuit argues that the Federal Motor Carrier Safety Administration (FMCSA) misinterpreted its own longstanding regulations and failed to acknowledge a substantive change in agency policy. New York contends the FMCSA ignored the state's reliance interests when making its noncompliance finding. What's Next The case was filed in the Second Circuit Court of Appeals rather than district court, as this is the proper venue for federal regulatory agency challenges under the Hobbs Act. The legal battle could set important precedent for how states handle non-domiciled CDL issuance.